Creating and Posting an Invoice
Cliff McDiarmid
cliffhanger at gardener.com
Wed Feb 7 18:43:30 EST 2018
Sent: Monday, February 05, 2018 at 11:55 PM
From: "Adrien Monteleone" <adrien.monteleone at gmail.com>
To: "Gnucash Users" <gnucash-user at gnucash.org>
Subject: Re: Creating and Posting an Invoice
>That’s the same account.
>Accounts Receivable is a Current Asset account. That is what the
invoice posts to. (other than the chosen Income account)
>In order to increase the balance, you post a debit to it.
>If you want to increase an Asset or an Expense, you debit the account.
>If you want to increase Income, Liabilities or Equity, you credit the
respective account
> On Feb 5, 2018, at 4:18 PM, Cliff McDiarmid
<cliffhanger at gardener.com> wrote:
>
>
>
> Sent: Sunday, February 04, 2018 at 11:53 PM
> From: "Maf. King" <maf at chilwell.net>
> To: gnucash-user at gnucash.org
> Cc: "Cliff McDiarmid" <cliffhanger at gardener.com>
> Subject: Re: Creating and Posting an Invoice
> 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?
>>
>> 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!)
> One more thing on this subject. Why, when posting the invoice does it
> place the amount in the A/R account as you explained, BUT also in the
> receivable account(current)as a DEBIT!
Thanks got it now. The mistake I was making was putting my current
a/c as the income a/c.
Cliff
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