Entering Scheduled transactions early

[Alex Aycinena]

Michael,


> ---------- Forwarded message ----------
> From: Michael Hendry <hendry.michael at gmail.com>
> To: David Carlson <david.carlson.417 at gmail.com>
> Cc: gnucash-user at gnucash.org
> Date: Sat, 30 Mar 2013 19:08:32 +0000
> Subject: Re: Entering Scheduled transactions early
>
> On 30 Mar 2013, at 15:23, David Carlson <david.carlson.417 at gmail.com>
> wrote:
>
> > On 3/29/2013 10:00 PM, Keith Royall wrote:
> >> My UK State Pension is automatically paid into my Bank Account each
> Monday,
>
> <snip>

>
> When you post a cheque through your accounts you presumably date it
> according to the date on which it was signed, knowing that it will be paid
> at some later date, depending on postal delays, and the recipient's
> keenness to get his hands on the money! Do you adjust the dates on these
> transactions when you get your bank statement?
>

This issue comes up frequently and people have different views on it. There
is no hard and fast rule but the traditional way it is done in accounting
is that the date to be used is the date you write the check, not the date
the check clears the bank. The reason for this is that the bank has no way
of knowing you have written a check until it sees it. Your books need to
reflect outstanding checks to be accurate. Also, philosophically, your
books are yours and you're responsible for maintaining them not some
outside entity, whether a bank, a customer/vendor, or a taxing authority.
They keep there own books and the reconciliation process (yours to theirs)
is more a useful technique for double-checking your accuracy (or theirs)
than one of 'correcting yours blindly to match theirs' (after all, if there
is a discrepancy the error might just as well be theirs as yours).


>
> Even with credit card payments, the date that is recorded on the statement
> is often later than the date of the transaction itself.
>
>
Again traditional accounting practice is to use the date you used the card.


> In practice, I have my scheduled transactions processed a month in
> advance, and when I open up my bank account in GnuCash I can see future
> transactions below the blue line and get advance warning of potential
> overdrafts.
>
> Michael
>
> But on the other hand, the purpose of all accounting tools (such as
Gnucash) is to provide useful information. So each individual user gets to
decide for themselves what is useful and to use the tool in the way that
meets their needs. The advantage of complying with traditional accounting
practices is that perhaps it helps avoid problems others have experienced
and solved before.

Alex