How to write off bad credit

[Derek Atkins]

Wouter van Marle <wouter at squirrel-systems.com> writes:

>> If Gnucash isn't designed to handle such common business accounts as
>> customers on credit sales (A/R) failing to pay, then this is a *serious*
>> flaw. The same goes for Returns and Allowances and Credits. In this
>> particular case you *decrease* the person's A/R account and *increase*
>> the Bad Debts account. Why doesn't Gnucash allow this common method?

It does but not directly.  As pointed out the way to handle credits
or returns is via the Process Payment method, and then you can adjust
the transaction afterwards.

> In GnuCash 1.8.12 (or about - the previous version that I used for
> years) it was possible to post negative invoices. And it worked quite OK
> (the invoice payment registration part is somewhat broken anyway -
> you're according to Derek not allowed to change things by hand in the
> A/R and A/P registers but the software happily allows one to do this!).
> But Derek considered it a "bug", and it has been "fixed". I considered
> it a nice and sometimes useful feature.

Go read the bug report on it.  The internal logic made assumptions
of whether a transaction belongs to an invoice or a payment, and
also assumed you could only have one invoice per Lot.  If you allow
negative invoices it would break that assumption, which is why it
was a bug.  It would send your accounts into a tizzy and nothing
would ever balance.

As for not allowing you to hand-enter transactions, the interface
isn't sufficiently restricted to allow me to say you can change some
parts but not others.  For example, it's definitely a feature (and a
SUPPORTED feature) to change the non-A/R account of a Payment.
However, you cannot (and should not) ever change the amounts.  But
there's no way to express a read-only-cells in the current register.
It's an all-or-nothing deal.  I can make the whole register read-only,
or I could make a whole transaction read-only.

For Invoices I make the transactions read-only to make sure you can't
ever edit it.   HOWEVER as I said I wanted to allow changing parts
of the Payment, so I leave that editable for this situation.

> The business features in GnuCash are not great. It works. After using
> this for several years it still feels like a hack to me. And
> unfortunately it makes GnuCash a lesser option for businesses.

I'm the first to admit that the business features need work.
I wouldn't call it a hack -- a lot of thought and work went into
it when I wrote it all 7-8 years ago.  But it's certainly far
from complete, and I know much more now than I did then.

> Wouter.
>
>> 
>> Does Gnucash handle contra-accounts?? It certainly should. (need to find
>> my accounting book).

Define "handle contra-accounts"?  Of course GnuCash lets you
create contra accounts but there is nothing special about them.

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available