Creating and Posting an Invoice

[Maf. King]

On Sunday, 4 February 2018 23:30:32 GMT Cliff McDiarmid wrote:
>    Hi
> 
>    I've nearly got gnucash running as i want it but i need some advice on
>    posting an invoice which is proving confusing.
> 
>    I create an invoice where one has to select an Income account; in my
>    case a current account.  But when it gets to posting the invoice one
>    has to select a 'Post to Account' where one has to create a 'A/c
>    receivable'.  I assume this because of the double accounting, but why
>    can't I just select an Income account such as 'Wages' at this stage?
> 

Hi Cliff,

OK, so GC's invoice subsystem uses a concept called "accrual accounting".  You 
write the invoice and expect to be paid at some point in the future. (end of 
month, 30 days, that sort of thing)

With that in mind, the income is generated when you create the invoice, even 
though you don't physically have the cash yet.

As you write out the line items on the invoice in GC, you select the relevant 
income account (eg Income:Sales or Income:consulting etc.)  When the invoice 
is "posted" into the GC books, this has the effect of increasing your income 
totals. (your bank account isn't income, it is an asset account)

But where to post it to balance the double entry?  As far as gnucash knows, 
you probably don't have the money yet, (assuming you are running accruals 
"properly"), so clearly the bank account is the wrong place.  This is the 
purpose of the special A/R account.  It stores the "earned but not yet 
received" money - and it is the other half of double-entry.

At some point in the future, when the money actually arrives (maybe in your 
case that is 1 second later, not 1 month or so!)  you "process payment", which 
decreases the A/R and increases the bank account (income is untouched at this 
stage.  you already earned it!)

Hope that clarifies a bit.
Maf.



>    If i create a new 'A/c receivable', then when I post the invoice it
>    only goes to that account, but not to my current a/c.  Erh, why is
>    this?
> 
>    Also.  Is there a way of creating an invoice template that comes up
>    every time I bill someone.  At the moment I have to go to 'Style sheets
>    and select my 'custom invoice' every time I create an invoice in order
>    to get it to display properly.
> 
>    many thanks
> 
>    Cliff
> _______________________________________________