Invoice & Bill Posting Date Issues Across Multiple Periods

[Derek Atkins]

Adrien Monteleone <adrien.monteleone at gmail.com> writes:

> I’ve already got the pre-paying and expensing part straight. My issue
> isn’t the idea of a pre-paid asset, my issue is that it is increasing
> when I post the bill, not when I pay it. I understand the difference
> between recording events vs. actual money exchanges but this is a
> question of ‘when is the event?’

You're asking yourself the difference of cash vs accrual.  There is a
huge process about "revenue recognition" in terms of how/when you are
supposed to recognize it, and different companies are required to use
different methods.

When I wrote the business features I chose one that made sense to me at
the time.  Honestly, I wrote it for me, for my own uses in my consulting
company, but tried to make it general enough for others to use.

Patches are always welcome, but keep in mind that there are still a lot
of invariants that would make different model "hard" to implement.  See
https://bugzilla.gnome.org/show_bug.cgi?id=95700 for 15 years of
discussion in this topic.

> 1. When the insurer generates the bill?
> 2. The date I arbitrarily ‘post’ the bill in GnuCash.(usually the day
> I enter it, or the ‘effective date’ of service.)
> 3. The due date of the bill and thus effective date of the beginning
> of the policy?
> 4. The date I actually pay the bill and decrease my cash asset?

This is why there are two dates (well, three dates), an invoice/bill
date, a post date, and then a due date.  The invoice date is #1, your
post date is #2, the due date is #3.  And of course #4 is when you
process the payment.

As for the date that the transaction should touch the Income/Expense
account, that varies completely based on how you recognize revenue (and
expenses).  The business features, as written, use #2 as that date.

> The problem is that 1&2 are happening in November and May of each
> year, while 3&4 are usually happening in December & June
> respectively. Thus, balance sheets for November and May are overstated
> in the pre-paid asset category.
>
> On the invoicing side of the question, I didn’t think of an
> ‘unbilled-work’ account. Thanks. I’ll use that.
>
> As for normal post-billed expenses crossing multiple periods I guess
> the only option is correcting entries, but that sure seems like a
> limitation of paper that computers should be able to handle more
> easily. The data is already being entered. It just isn’t being used by
> the software. I’ll file an enhancement request.

Don't bother -- It'll be closed as a duplicate.  Use the existing one.

> Regards,
> Adrien

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available