End-of-Year Accounting for Daycare Service

Michael Hendry hendry.michael at gmail.com
Wed Jan 13 03:35:58 EST 2016


> On 13 Jan 2016, at 00:55, Terry Morse <tmorse at teleport.com> wrote:
> 
> I'm helping a friend with the accounting for her daycare business. [Note: I am not an accountant.] Some of her customers pay on a monthly basis, some weekly, some daily, and some hourly. One customer receives a government subsidy for daycare and owes a monthly copay plus a variable monthly differential. This customer regularly pays the copay, but is usually in arrears on the differential. Thus, my friend's actual income is much less than she should have been paid. This has complicated the end-of-year accounting for tax purposes.
> 
> The way I've structured the business account is to create a new invoice for each customer each calendar year. I enter the payments owed into the invoice linked to the income account "Sales," and the payments made to an account called "Actual Income" as a child of Orphan USD, at least in the interim. This works for producing end-of-year tax invoices for each customer, with all charges and payments displayed, including total charges and amount owed.
> 
> The problem comes when I generate a profit & loss report for the business owner to take to her tax accountant. Total sales shows up as income, but actual income doesn't. If I swap the accounts around, making actual income a child of Income and sales a child of Orphan USD, the actual income shows up as a negative amount, thus reducing the profit. I can always print out the account summary, which shows both the amount she should have been paid and the amount she was actually paid, for her to take to the tax accountant, but this seems untidy and inelegant.
> 
> Is there a more sensible way to set up the business account that would accord with good accounting principles and that would allow me to generate complete tax invoices for the customers and a proper tax statement for the business?
> 
> Thank you,
> Terry Morse

I don’t use invoicing myself, but I think your solution is to be found in “Accounts Receivable”.

Have a look here:

http://www.gnucash.org/docs/v2.6/C/gnucash-help/busnss-ar-components1.html <http://www.gnucash.org/docs/v2.6/C/gnucash-help/busnss-ar-components1.html>

Michael




More information about the gnucash-user mailing list