Split transactions

John Layman john.layman at laymanandlayman.com
Mon Aug 16 13:02:01 EDT 2010


I didn't mean to imply that charges must be entered contemporaneously, only
that they ~can~ be entered prior to receiving the credit card statement.  In
our small consultancy, charges are entered when an expense report is
submitted.

When treating a credit card payment as a lengthy split transaction, one can
still correctly detail expenses.  It is only the dating of the liability
that is affected, and that may not be a concern - particularly for personal
record-keeping.   Indeed, back when we were using Money's small business
version, our consultancy operated on a simplistic literal cash basis in
which charged business expenses were booked on the date of the credit card
payment.

-----Original Message-----
From: Mike or Penny Novack [mailto:stepbystepfarm at mtdata.com] 
Sent: Friday, August 13, 2010 3:53 PM
To: john.layman at laymanandlayman.com
Cc: 'PeterS'; gnucash-user at gnucash.org
Subject: Re: Split transactions

John Layman wrote:

>I'm a cutover from MS Money, too.  In Money, there were two ways you 
>could handle credit cards, and I used the same approach you apparently 
>did -- itemizing the detail in a split transaction once I received the 
>bill.  This is a simple way to handle credit cards, but it has the 
>downside of leaving expenses unrecorded until well after they are 
>incurred.  In GNUCash, I've used the second approach (which you could 
>also use in Money) of setting up individual accounts for each credit 
>card.  I enter the transactions throughout the course of the month, and 
>then reconcile the account when I receive the bill.  [You reconcile it 
>just as you would a bank statement.] During reconciliation, I commonly 
>find that I've lost receipts or failed to record Web transactions and 
>so forth.  Fortunately, GNUCash handles changes in the register during 
>reconciliation in a natural and flexible way, and it also provides 
>something akin to the running total of amounts entered you mention.  
>One other benefit has been that unreconciled transactions are 
>highlighted by their status, so it's fairly easy to identify and correct
charges you may have entered  for the wrong card.
>
>  
>
You are confusing something here. Accounting doesn't have to be done in
"real time".

One of the organizations for which I keep the books has a "business credit
card" account and I often don't know about who used their credit cards,
when, and for what until I see the statement combining all accounts. I may
have to contact that person and ask "what did you get from vendor Y on thus
and so date?" and can't ENTER that transaction until I get a reply (I won't
necessarily know the right expense account unless by the vendor that is
obvious; if an airline that was "travel" 
but if it was Wal-mart?). But the date on which I enter that transaction
into the GnuCash books has NOTHING to do with the date of the transaction
itself.

This isn't a "little folks" issue. I am retired from a few decades doing
financial systems software from one of the world's largest financial. 
Our transaction processing systems with their feeds to "general ledger" 
were NOT running "real time".

Michael D Novack, FLMI



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