Struggling with Invoicing Prepaid Service

[David Cousens]

On 10/11/2015 10:55 PM, Cyber-Wizard wrote:
> I've been using Freshbooks for invoicing and expense tracking for my
> consulting business. It's time to move to something more full featured. As a
> longtime Linux user, GnuCash is the obvious first choice. I'm testing
> GnuCash 2.6.6 out now on Windows 10.
>
> Many of my customers prepay for my time in blocks so I need to issue them an
> invoice upfront and deduct from the paid amount as I work. I think that I
> have the prepayment aspect working correctly but I'm struggling with Invoice
> payment.
>
> When I create an invoice, 13% HST is added on to the invoice according to
> the tax table. For the sake of even numbers lets say the invoice is for
> $5000 + $650 in applicable taxes. When I post the invoice I get $5000 in
> Assets>Accounts Receivable
> $650 in Liabilities>HST
> This makes sense to me.
>
> When I receive payment. I would like to have the $5000 go into
> Liabilities>Unearned Revenue but I'm uncertain what to do with the remaining
> $650. Receiving payment of the posted invoice puts all $5650 into the
> Transfer account that I choose during the payment process. Obviously my
> customer shouldn't have the full $5650 at their disposal, but I'm uncertain
> what the logical steps would be to relocate that $650. I think my question
> is probably more of an accounting issue than a GnuCash issue but I suspect
> that I'll get better information here than elsewhere. Can anyone offer any
> advice on how I should more appropriately receive payment on an invoice?
If the payment is initally recorded as the total amount of $5650 to the 
Unearned Revenue account then you could open the transaction to that 
account and modify the transaction by adding an additional split so that 
the $650 for the HST is placed into your main bank account and the 
amount transferred to the Unearned Revenue account is reduced to $5000 
and the credit to your Accounts Receivable is for the full amount of $5650
>
>
>
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