Solved: Debit Memo

[Pablo Francesca]

Well it looks like this problem is simpler than I had envisioned. Ideally I would like the customer report to list "Debit Memo" under the Type column. This appears to be impossible without editing the xml file (a posted invoice cannot be edited and it appears any invoice not created via New Invoice dialogue wont report properly).

However, even if the Type column does not indicate Debit Memo, this is still okay as long as the reporting is not broken and income is not inflated.

Well since those are my parameters, this can be done quite easily, just create a new invoice, note the memo field as debit memo and make the Income Account account a non-Income account. (Assets: Undeposited Funds).

Does this solve my problem? Yes, did it leave me temporarily confused? Yes.

This explanation is just for any other people whose brains get stuck like mine.  When you create an invoice it appears the debit part of the accounting transaction is handled at the end when the Question dialog pops up.  It is that field that determines what account is debited.  This explains why it is limited by default to A/R.  For some reason I had always assumed that this debit was taking place immediately after I filled out the New Invoice dialog.  The credit part of the transaction is handled by the account listed in the Income Account.  This explains why it allows you more freedom is assigning this credit entry.  Again I had always ignorantly assumed that this was handled by some process hidden from the user.

So in conclusion, creating an invoice does not automatically have any effect on income reporting, it will only effect income reporting if it is actually assigned to an Income account via the Income Account field.

So, just to be sure, I am understanding how Gnucash handles invoices correctly, am I not?

--- On Sun, 3/14/10, Maf. King <maf at chilwell.net> wrote:

From: Maf. King <maf at chilwell.net>
Subject: Re: Debit Memo?
To: "Pablo Francesca" <rshgeneral at yahoo.com>
Cc: gnucash-user at gnucash.org
Date: Sunday, March 14, 2010, 10:17 AM

On Sunday 14 March 2010 15:48:36 you wrote:
> This suggestion doesn't seem to work.  I created a dummy invoice which I
> can see in the A/R registry.  However, I can't edit it because its a posted
> invoice.  Okay, fine, I unpost the invoice.  Well, now I can't see the
> invoice in the A/R registry in order to edit it!
>

Hi,

Don't forget to cc the list on your replies, there are others here who can 
help, probably better than I can.

What I meant was for you to create a dummy _payment_ to the spouse's account, 
(from eg. Bank:Checking) using the process payment dialogue, then go and 
manually change the bank:checking to Assets:undeposited funds in the 
register.  This is basically the reccommended way to deal with "negative 
invoices" and refunds etc.

But it is entirely possible that I have misunderstood what you are trying to 
do. 

> Furthermore, I'm unsure as to whether this method would solve the problem
> of reporting,  given the options available.  In the Action box of the A/R
> registry there appear to be 4 values. Credit, Interest, Invoice, Payment. 
> I'm guessing that Credit and Payment have the same effect (they credit A/R)
> and that Interest and Invoice have the same effect (they debit A/R).  But
> both of those categories, Interest and  Invoice, are reflections of
> income.  Thus, they suffer from the problem mentioned below regarding
> incorrectly inflating income.  It's strange that gnucash, while it seems to
> have a Credit action, does not have the corresponding Debit action.

AFAIK, the "Action" field is editable, and you can just type in Debit, if that 
is what you want to do.  I'm not sure where that field is used within GC.

HTH,
Maf.

>
> I guess its not possible to do this in gnucash.
>
>
> --- On Sun, 3/14/10, Maf. King <maf at chilwell.net> wrote:
>
> From: Maf. King <maf at chilwell.net>
> Subject: Re: Debit Memo?
> To: gnucash-user at gnucash.org
> Cc: "Pablo Francesca" <rshgeneral at yahoo.com>
> Date: Sunday, March 14, 2010, 4:05 AM
>
> On Sunday 14 March 2010 08:43:03 Pablo Francesca wrote:
> > I'm not sure if this a feature request or if I'm missing some gnucash
> > accounting procedure. I have a customer who wishes to make a payment and
> > have any outstanding credit on his account applied to his spouse's
> > account.  This seems straightforward enough in accounting terms. I would
> > take a payment (credit Accounts Receivable) and debit increase Assets:
> > Undeposited Funds (dummy account used as intermediary to other asset
> > accounts).  I would then create a credit memo (Payment) on the spouses
> > account.  I would then like to create a debit memo.  I assumed I could
> > then credit (decrease) Assets: Undeposited Funds and debit accounts
> > receivable. My goal in all of this was to show a full payment on the
> > customer's account along with a debit memo and also show a credit memo
> > (payment) on the spouse's account. Problems arise because while Gnucash
> > will let me credit Assets: Undeposited Funds and debit Accounts
> > Receivable, none of my actions seem to have any affect on customer
> > reports or Receivables Aging reports. So I dug into Accounts Receivable
> > and while it seems you can manipulate values for Ref, Action, Customer,
> > and Date, none of your actions seems to have any effect on customer
> > reporting. I briefly thought about creating sub accounts under Accounts
> > Receivable for each customer but my initial tests still indicate that
> > this cumbersome approach still doesn't adequately report my attempts at
> > creating a debit memo. I suppose at this point, someone might point out
> > that I might simply create an invoice with a dummy invoice number and a
> > memo that indicates that it is not an actual invoice, but merely a credit
> > memo.  Well, yes, this makes the customer reporting work, but then I'm
> > left with incorrectly recorded income. It makes no sense to create an
> > invoice for a service that was not provided. So in the end I just decided
> > to split the payment for the customer and his spouse (I still noted the
> > spouse payment as a credit memo).  While this satisfies for accounting
> > and reporting purposes, it still seems to bug me that the customer's
> > reporting will still show a payment amount that is different than the
> > actual payment received. (even though the discrepancy is noted).
> >
> > Am I missing something or is there no way to create something in gnucash
> > akin to a Debit memo?
>
> Hi,
>
> You have to create transactions in A/P (and A/R) via the Business menu
> (Process Payment/ New Bill etc.) for the transactions to show up in the
> business reports.  If you manually create txns in the business registers,
> they don't get reported.
>
> I think the way to do this is to use the menus to create transactions, then
> edit those transactions directly in the registers to put them in the
> correct transfer accounts.
>
> HTH,
> Maf.



-- 
Maf. King
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