Invoice & Bill Posting Date Issues Across Multiple Periods

[Derek Atkins]

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

> I don’t think I’m mixing cash-accrual, but just to clear up any
> confusion, let’s forget when I actually pay the pre-paid expense. When
> do I incur it? When the bill is generated by the insurer? When I
> receive the bill? When I enter it in GnuCash? When it is due? (the
> effective date of the policy) In short, what should my posting date
> be? (#2 below)

Well, when you incur the "expense" differs based on cash vs accrual
accounting.  IMHO (IANAA) you incur the expense (under accrual) some
time between when the bull is generated and when you receive it.  Under
cash it's of course when you pay it.

[snip]
> I’ll wait for now. I see this as a separate issue. I'm not asking a
> question of cash vs. accrual for post-billed expenses, but single
> vs. multiple posting dates. Just under an accrual method, a
> multi-period bill/invoice is not recognized properly in one step. It
> still (like paper) requires correcting entries to accrue amounts back
> and forth across period boundaries. I see that the needed info is
> already present in the bill/invoice, just not being used.

As I said in my last reply, there is a 1:1 mapping of Invoice <->
Transaction, so you cannot have "multiple posting dates".  If that's an
issue, then enter multiple invoices.

You CAN have a single invoice (with a single date) that collects
multiple days or work.  For example, if I get my car serviced the work
done could take a week -- the bill I receive from them has a single
date, but the line-items each have individual dates.  It doesn't matter
if the car was in the shop across an accounting period boundary -- it's
a single bill and gets entered/dated when you receive it.

Maybe you need to supply a use case where you actually receive a single
bill for something that actually needs to be split across multiple
periods.  I still don't see that here. 

> Now, maybe making this change would help both use cases, but the cash
> case still depends on payment dates, and I’m not concerned with
> payment dates at all here, just single vs. multi-period postings.
>
> My apologies if addressing the pre-billed/pre-paid recognition
> question at the same time as the single/multi-period posting question
> confused things. I considered separating the posts and probably should
> have. They are two separate issues.

I think they are related issues.  There's a question of when the value
hits your A/R or A/P accounts, when it hits your Bank account, and when
it hits your Income/Expense accounts. Of course there's the added
question of what do you do with the value if you necessarily need to
split the dates of when it hits A/R;A/P vs when it hits your
Bank;Income/Expense.

> Thanks for your insights,
> Adrien

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-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
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