[GNC] Advice needed, how to handle a medical reimbursement account...

[Peter Rowed]

Hi Randix,

OK, I misunderstood the $1000.00. Here is how I would do it.....

1 You have set up asset accounts for MRA and checking account.
2. You have set up an income account for MRA income. (I'm not sure if that is treated as income in US but it's going to work)
3. You have set up a medical expense account.
4, now you need a fourth set of accounts for each MRA titled Claims in Process. It's a clearing account and in Australia would be treated as an asset.

The steps are....

1. on day 1 you are notified that $1,000 has been deposited in a holding account for your MRA , let's call it membership. So in Gnucash you debit the holding account and credit the income account, as explained above.

2. on day 2 you pay $100 to a doctor so you credit your checking account for $100 and debit the expense account, as above.

3. On Day 3, you submit a claim of $100 to the MRA . So in Gnucash you credit the MRA account and debit the MRA claim in process account (clearing account)

4. on Day 4 you receive $100 from the MRA. You debit the checking account and credit the MRA claim in process account.

At the end of all of this, your MRA will have $900DR, Your clearing will have $0, your bank will have $0, your medical expense will have $100DR and your MRA income will have $1000CR.

Accounting should always reflect what is actually happening and you have a history of what happened.

Just as you have a hierarchy of MRA accounts, you could have a hierarchy of MRA clearing and income accounts. At any time you can report on what your MRA account balances are, what is in progress and what income you have earned.

You could skip the income and clearing account hierarchies and just have one and identify the MRA ownership with a comment in the memo of the transaction. I wouldn't do that as the effort and disk space in unique accounts is insignificant and not hostage to the possibility of miskeying a memo comment and then chasing a miscoded transaction.

This is the way I keep books for my clients and is quite normal in Australia.

Hope this helps, email me if i have confused you and i'll try again

 


​Regards Peter

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‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐

On 14 May 2018 12:07 PM, randix <butterandsalt at gmail.com> wrote:

> Thanks for your suggestion.
> 
> Unless I'm misunderstanding, what you propose would work fine if one was not
> 
> interested in keeping track of the current balance(s) in the various MRA
> 
> accounts. I need to keep track of the balances, as I need to know which MRA
> 
> account still has credit balances to which I can submit claims.
> 
> So, for example, using your suggestion...
> 
> 1.  On January 1, 2018, I'm notified that I have received $1,000 which has
>     
>     been deposited in my XYZ MRA Account (keep in mind, these are not funds that
>     
>     have been actually sent to me, rather they have been deposited in an account
>     
>     set up in my name). I have an ASSET account in the name of XYZ MRA, so on
>     
>     January 1, 2018, when notified of the deposit, I make a "deposit" in that
>     
>     asset account in the amount of $1,000, and offset it with $1,000 in an
>     
>     income account titled MRA income (so I can keep track of MRA funds that have
>     
>     been credited to me in all MRA accounts).
>     
> 2.  On January 5, 2018, I pay out of my checking account the sum of $100.00
>     
>     to Doctor 123, the offsetting entry is expense:health:medical
>     
> 3.  Using your suggestion, on January 10, 2018 when I file a claim for
>     
>     reimbursement of the $100.00, I debit the ASSET XYZ MRA account, so it now
>     
>     has a balance of $900.00, and credit the $100.00 in my
>     
>     expense:health:medical account. All good.
>     
> 4.  *The issue is what happens when I actually receive the reimbursement in
>     
>     my checking account. *
>     
>     4.1 You said, "Receive reimbursement. Deposit into checking account. Debit
>     
>     checking, credit MRA". Not exactly clear what you meant, except that I get
>     
>     you want a credit to end up in the MRA account. But doing so, will bring
>     
>     the balance of the MRA account back up to $1,000 when we know there's only
>     
>     $900 in there...if that account had a zero balance to start with, your
>     
>     debit/credit approach would work fine. But I need to have it track the
>     
>     balances.
>     
>     Suggestion? My head is starting to spin :)
>     
>     --
>     
>     Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html
>     
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