Cash versus Accrual Accounting

[Mark Seeba]

I use GnuCash for cash accounting for my business. Here is how I handle it:



1.       Sometimes I send invoices to customers unposted - You can still print  and send them

2.       If I need to track them on my receivables report, I have to post them

a.       You can post with a future post date

b.      Before closing the books at the end of the accounting period, you can unpost and repost any unpaid invoices into the next accounting period





Mark Seeba

MCSE: Communication

Streamwrite

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-----Original Message-----
From: gnucash-user [mailto:gnucash-user-bounces+mseeba=streamwrite.com at gnucash.org] On Behalf Of John Morris
Sent: Friday, October 3, 2014 6:27 AM
To: gnucash mailinglist
Subject: Cash versus Accrual Accounting



Hi All,

  I started using GnuCash last summer, and I'm getting used to it for my personal finances. Therefore, I'm starting to learn the invoicing features so my wife can use GnuCash for the business accounting. Our business is very small and simple: no bills, no taxes, just customers and invoices for the editing work we do. However, I seem to have run into a small complication and I'm hoping someone with more experience will take pity on me and tell me how to make this work for us.



  The issue is that we use cash accounting for our income taxes. Therefore, if we bill a customer in December 2014 but receive payment in January 2015, that payment goes on our 2015 income tax return, not the 2014 income tax return. Unfortunately, it appears that the posting date determines when the income account gets hit for each new invoice, not when the payment is received. This gives us a conflict because we would like to be able to pull a report showing how much we billed in each of the last few weeks so we can know that we are on track there. However, we want the income account to show the income only when we get paid.



  I thought of simply posting the invoice after we receive payment; I'm not using the invoice printing facility because it is not customizable enough for our needs. However, that would leave us without a way to know when the work was billed.



  So, does anyone have ideas of how to make cash accounting work in GnuCash? I found http://wiki.gnucash.org/wiki/Cash_Based_Accounting suggesting that GnuCash support for cash-based accounting is still in the discussion stage, so I don't expect to find a setting anywhere. I thought of once a year creating a single transaction in the income account for all outstanding invoices, moving them from the current year to the next year. That seems like it could be workable as long as I remember to do it, but it would be nice to have something more automatic and less like a kludge.





  As a second question, it would also be nice to be able to see how much we are owed in weekly increments. I found the Receivables Aging report, but it does not exactly meet my need. First, it lumps all invoices due in the future into a single category, but I would like to know how much is due this week, how much is due next week and so on. Second, it shows how much is 0 to 30 days late and how much is 60 to 90 days late. I would like to change those periods to 0 to 7, 7 to 14, etc. Is there another report that would come closer to what I need or do I have to learn Scheme?



Thanks,

John





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