kash at warmplanetbikes.com
Thu Nov 22 11:48:54 EST 2012
I'm not an accounting professional, so if someone with a better
understanding wants to chime in, please do.
You do not want to screw this up. Please have an accountant set up your
books. It's a small legitimate expense and will keep you out of court
should your accounting practices go horribly wrong, which they are
likely to do if your books are set up in some janky, homebrew fashion.
To make the most of your time with the accountant, please do some basic
research. Read 'accounting basics' and 'the accounting equation' at
accountingcoach.com. There are also entries on accounts payable and
The following is GnuCash specific so you can more easily understand the
principles explained at the website, and not intended as directions for
setting up your books.
I'm assuming that you're keeping the books for the estate, and that your
GnuCash file contains only accounts for the estate.
GnuCash calls companies and individuals who owe the estate customers,
and companies and individuals who the estate owes are called vendors.
Ignoring more complicated debts, money the estate owes is a liability,
recorded in an account called 'accounts payable' of type account
payable. Money the estate is owed is an asset, recorded in an account
called 'accounts receivable'.
The reports 'payable aging' and 'receivable aging' show all the
information you need to track what the estate owes or is owed. Vendor
and customer reports show individual bills.
If you set the accounts up manually, or set up individual accounts for
each company or individual, you will break the reporting functions that
make keeping track of debts simple and standardized.
I'm reprinting my original reply below.
**Note: the following is complex enough that you should create a backup
copy of your file before you start. There are some quirks with GnuCash
that mean you will not be able to rollback the file to its previous
state if you screw up the entry. Best to dump your work and restore from
backup until you get the hang of what you're doing.**
For each entity you owe money to, you'll create a new vendor; business >
vendor > new vendor. Each time you receive a bill or invoice from one of
them, you'll create a new bill; business > vendor > new bill. GnuCash
can be configured to pop up a reminder of bills due soon each time you
open the program. You will also be able to see totals due to each vendor
by date through the reports > business > payable aging and reports >
business > vendor report.
Do not enter the bills you owe directly as transactions, and do not
create multiple accounts of type 'accounts payable' because it will
screw up reporting. GnuCash has a simpler method that lets you generate
reports to keep track of what you owe, who you owe it to, and when each
bill is due. Look up the 'bills' topic in GnuCash help.
Note that if you're tracking money owed to you, GnuCash can do that too
and the process is similar, but you have to create 'customer' instead of
vendor, and you'll track the amounts and due dates in 'receivable aging'.
Unfortunately, if you buy and sell from the same entity, I have found no
way to avoid having two entries, one for customer, and one for vendor,
with duplicate information.
On 11/22/2012 1:17 AM, David Ryder wrote:
> Many thanks - I understand all that
> On 22/11/12 09:12, Maf. King wrote:
>> Hi David,
>> Answers (opinions - IANAA) in line below...
>> On Thu 22 November 12 09:00:06 David Ryder wrote:
>>> To explain my situation:
>>> I am an Executor of a Will.
>>> I am owed money by the Estate for expenses I paid (bills etc before my
>>> father's death).
>> Condolances for your recent loss.
>> I would create an account in the Estate's books, something like
>> Liabilities:DavidExpensesToRepay. You are acting to all intents and
>> like a credit card for the estate. (if that helps you visualise the
>>> I am keeping the books for the Executors.
>>> They are creditors for their expenses paid (funeral as an example).
>>> So, I'm lost where to put the creditors accounts - does each person
>>> their own 'account'?
>>> Under what Placeholders do I place the accounts?
>> Yes, I would create a series of accounts, something like
>> Liabilities:Executor1, or possibly Liabilities:Executors:Executor1
>> one per executor.
>>> Amounts are owing to the Estate. I assume these are Equity accounts?
>> I'd say they are assets of the estate. Suppose your father had made
>> a loan to
>> a grandson to help with education fees. From the estate's point of
>> view, that
>> is money that is expected to be repaid in due course, and so is an
>> Again, depending on the complexity of the Estate's affairs, either
>> one or
>> several accounts under Assets is the way I'd record things.
>> Best Regards,
>>> Many thanks,
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