Help with GNUCASH for some transaction options
David Cousens
davidcousens at bigpond.com
Thu Dec 15 19:45:22 EST 2016
Hi Winlux,
You could simply unpost the bill from CompanyA and then repost a new
bill from CompanyC with the disadvantage that you have lost any
recording of the original transactions with companyA. A possible
scenario is that one or more Bills from companyA may be partially paid
at the time your debt to CompanyA is transferred to CompanyC, in which
case you would not want to unpost the partially paid bill.
In effect CompanyC, by agreeing to take over your debt to companyA, is
agreeing to pay out the debt to CompanyA for you and replacing that with
a debt to themselves. Presumably this is being done without your direct
participation in the transaction, i.e. the money involved is not passing
through your bank account. ( E.g. Company C may be forgiving a debt
Company A has to them in return.)
Since you are using the business features and in light of Derek's
comments of the possibility of inadvertently locking the A/P and A/R
accounts in performing manual transactions to those accounts, it seems
advisable to use the business payment features to record the
transactions. The approach I suggested in the first part of my post on
15th December 4:44pm ( probably local time in Brisbane Australia and not
UTC) should achieve that ( repeated below)
For your second problem the transactions which created the debt to
company A will be of the form ( i have only illustrated a single
transaction equivalent to the multiples you describe. Assuming these are
invoices
Expense Db 1000
Liability:A/P:CompanyA Cr 1000
A dummy ( for want of a better term) payment to erase this debt would be
of the form
Liability:A/P:CompanyA Db 1000
Liability:TransferAccount Cr 1000
You could then create an Bill from Company C for the 1000 amount,
specifying the transfer account where you would normally specify an
Expense account. The resulting splits of the transaction will look like.
Liability:TransferAccount Db 1000
Liability:A/P:CompanyC Cr 1000
Again the resulting balance of these two transactions in the
Liability:TransferAccount would be zero. The choice of a Liability or
Asset account for this transfer account is completely arbitrary as it
would also be for your first problem where we illustrated it using an
Asset:Bank account.
The introduction of an artificial account to effect the transfer is
perhaps not satisfying but it represents that transaction (hidden to
you) between CompanyC and CompanyA in which your debt to companyA is
cancelled. It is probably a good idea to annotate the memo fields on
any of these transactions with as much detail about what is actually
happening as possible so it is clear.
If this is a transaction you encounter fairly frequently it is possibly
a good idea to consult a local accountant about how best to record it.
There may be local business and accounting legislation which may affect
how it should be recorded. Any advice here is necessarily generic.
Alternatively if your accountant prepares your business returns and
filings he should be able to understand from the above what has happened
and then present that in an appropriate way in any official documentation.
Cheers
David Cousens
On 16/12/16 01:33, komarac85 at yahoo.com wrote:
> <quote author='DaveC49'>
> HI Winlux,
>
> In the example I used a Asset:Bank account as the intermediary for the two
> payment transactions. It is not a fake account as such. If the transactions
> to this account cause you problems, there is no reason you cannot intoduce a
> dummy asset (or liability) account for this purpose. When the two
> transactions are completed, the balance in the account will be zero. The
> Imbalance account acts a bit like this when it is used as the target for
> splits which were not assigned to a specific account. Any non-zero balance
> in it indicates that a transaction has a split not directed at a specific
> account. You could give it any name that was appropriate or made sense to
> you e.g Asset:CustomerVendorTransfer.
>
> Also using the word dummy is probably not appropriate ( but I couldn't think
> of a better term at the time). The payments using the Business features to
> execute them while not reflecting actual physical transactions in that the
> money wasn't directly handed over in each case are still reflecting the
> effective transaction virtual transactions which occur when you agree to
> offset what you owe the vendor by what the vendor owes you. You have
> recorded the two events in your accounts in raising an invoice to them as a
> customer for the meal and a bill to them as a vendor for your purchases and
> recording the payments against that bill and invoice. It is the second
> payment which cancels out the first entry into the bank account.
>
> The receivables and payables ageing reports will tell you about what you owe
> and what is owed to you.
>
> To see what payments you have made and have been made to you you could use
> the Customer and Vendor reports but you would have to prepare them for each
> and every customer and each and every Vendor.
>
>
> For your second problem the transactions which created the debt to company
> A will be of the form ( i have only illustrated a single transaction
> equivalent to the multiples you describe. Assuming these are invoices
>
> Expense Db 1000
> Liability:A/P:CompanyA Cr 1000
>
> A dummy ( for want of a better term) payment to erase this debt would be of
> the form
>
> Liability:A/P:CompanyA Db 1000
> Liability:TransferAccount Cr 1000
>
> and the second dummy payment would be
>
> You could then create an Bill from Company C for the 1000 amount specifying
> the transfer account where you would normally specify an Expense account.
> The resulting splits of the transaction will look like.
>
> Liability:TransferAccount Db 1000
> Liability:A/P:CompanyC Cr 1000
>
> Again the resulting balance of these two transactions in the
> Liability:TransferAccount would be zero. The choice of a Liability or Asset
> account for this transfer account is completely arbitrary as it would also
> be for your first problem where we illustrated it using an Asset:Bank
> account.
>
> Again you could alternatively manually enter the splits and simply do
>
> Liability:A/P:CompanyA Db 1000
> Liability:A/P:CompanyC Cr 1000
>
> and eliminate the use of a transfer account. This has the disadvantage if
> you use the business features you have no resulting Bill from CompanyC to
> record your payments to them against. If you annotate the Memo fields in
> the transactions to show what you are doing and explainit should be clear to
> yourself and your accountant what you have done and why.
>
> If the above is not making a lot of sense you may need to gain a better
> understanding of double entry bookkeeping, the accounting equation and the
> relationship between debits and credits on the various account classes. Try
> looking those terms up in Wikipedia as the explanantion given there is
> pretty good then look at the GnuCash user guide.
>
> I'm not sure how to get the information you want out of transaction reports.
> It may involve an appropriate choice of the account to report transactions
> i.e A/R and A/P from and the target account for those transactions. If you
> click on Reports->Transaction Reports and click the link to edit the report
> Options you will get a dialog where you can play with the various options to
> get what you want. I am not aware of an option for just reporting payments
> though.
>
> Cheers
>
> David Cousens
> </quote>
> Quoted from:
> http://gnucash.1415818.n4.nabble.com/Help-with-GNUCASH-for-some-transaction-options-tp4688159p4688208.html
>
> Hi Dave
>
> Thanks for helping me. I have read your message and i have feeling being lost... I get solution for my first problem. As for second i'm not so sure.
> Maybe im not provided enough data, or clear enough. Let me try again. Il apologize in advance since tutorials and help instructions are all in english, and program start in my native language(serbian). My second problem is all about Business - vendor - bills..
> Since i use business features i'll try to describe it.
> I have bought stuff from company A in value 1000€
> Then vendor - bill is created:
>
> Expense-buying-company A Db 1000
> Liability:A/P:CompanyA Cr 1000
> (buying-company A are 2 sub account under Expense placeholder acc. for easy expenses tracking)
> This is how it normally should be(as far i understand GNUCASH and principles of double entry bookkeeping).Bill is posted to A/P. Under vendor reports I should now be owning (credit i guess?) to company A 1000€.
> Now the tricky part.
> I made a deal with company C to take my debt/credit from company A
> Now situation should be(after the dill):
> my debt/credit to company A is 0
> company C owns debt/credit to company A 1000€
> my debt/credit to company C is now 1000€
> How to make it happen?
> Shoud I
> 1.Unpost bill from company A then delete bill completely.,then re enter bil as company C as vendor?
>
> Or there is some other method that i'm not aware ..
>
> _____________________________________
> Sent from http://gnucash.1415818.n4.nabble.com
>
--
Dr. David Cousens
B.Sc.(Physics),Ph.D.(Physics), M.Prof. Acc., G.Cert. Ed.
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