Accounts Receivable Question
Maf. King
maf at chilwell.net
Tue Nov 10 02:36:37 EST 2009
On Monday 09 November 2009 00:59:27 Stephski wrote:
> I have searched the existing posts extensively, but can't find quite the
> same problem.
>
> I am a new user and I am inheriting an established account that I am not
> certain was set up correctly, or I'm just an idiot.
>
> Due to the complexity of our billing, we generate invoices outside of
> GnuCash. When I attempt to enter a new invoice as a "Receivable" against a
> specific subaccount for which the work was done, another entry for the
> exact same amount shows up as a "payment" within the subaccount.
>
> Here is the process I am using:
> I go to the subaccount set-up under "Assets:Receivables:Company Name" (this
> subaccount represents a company for which we perform labor during the
> month).
> I open that subaccount and enter the invoice details, choosing the transfer
> account of "Assets:Receivables:Company Name."
> That entry shows and and automatic one appears as a payment for the same
> amount in the same subaccount.
>
> In the past, they got around this problem by entering invoices into
> "Income" accounts, and when the payments went in, they were posted against
> the "Assets:Receivables" accounts. From an accounting perspective though,
> that seems bass ackwards.
>
> Am I incorrect in my thinking and the old way was really the right way (if
> so, it makes it tough at year end for cash accounting where we need to
> ignore receivables)?
Hi Stephski.
It sounds to me that you are doing it wrong, and the "old way" is more
correct.
_but_
AFAIK, a business which does cash accounting, by definition, doesn't have
receivables / payables (although IANAA.)
I understand that you want to track "receivables" though - cash flow forecasts
etc. At year end, could you just report on the Income tree, and then subtract
the balance of A/R? That would give you the total actual cash received for
the year... I think.
HTH,
Maf.
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