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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