[GNC] Posting a bad debt

Tue Apr 9 19:45:10 EDT 2019

Greg,

When you create an invoice or a credit memo, in the main body of the form where you enter what you are going to sell, the available accounts are asset, liability and income. Still no access to an expense account to charge off bad debts. I face the same problem when a parent wants to pay his child’s tuition in kind, i.e. by services I would otherwise pay for. I would like to show the credit memo as an expense for the service provided but there is no way to do that. I bought a hefty switch for our internal network that way. The family has a nice credit balance and it didn’t touch my cash flow. I added a fixed asset account for the switch and charged the credit note to that account. That would not work for other services, like painting and computer maintenance, 

The only way I’ve been able to make it work is to create a bad debt income account that will show a negative balance and then move the transaction out of the income account journal to a bad debt expense account by a separate manual transaction outside the invoice module. Seems a bit more convoluted than it needs to be. I have to read my notes on what I decided to do every time I need to do it. Isn’t that often so it isn’t that big a deal but it would be nice to have at least an option to charge off bad debts to a bad debt expense account. The totals come out the same either way and a CPA may tell me that it indeed should be an income account. Just seems like it should be an expense account. Would also be useful to pay for services in kind this way. Came to mind this week because I have a pretty hefty account to write off. 

You need to do something through the invoice module or the unpaid invoice just hangs there and shows up on your balances. You can’t just do a journal entry in the accounts receivable journal. I think once or twice I just gave up and unposted the invoice, changed the name of the customer to an account I use to save these as you can’t delete them, z Recibo Abierto (open receipt – my system is in Spanish), delete the charges and that makes it go away too but there is no record that Joe Dokes is a non-paying customer and it created a loss. Just drops your accrued income. Same net effect so it is an option. 

Thanks,

Roger

From: Greg Feneis <mfeneis at gmail.com> 
Sent: Tuesday, April 9, 2019 3:21 PM
To: rmomxtx at gmail.com
Cc: Justin Haynes <justin at justinhaynes.com>; GnuCash <gnucash-user at gnucash.org>
Subject: Re: [GNC] Posting a bad debt

In similar fashion, a favorite customer shorted me $0.50 on a timely big invoice payment.  Rather than hassle them about $0.50, I created another invoice, but as I was creating the invoice I selected credit memo instead of invoice.  I made a credit memo for $0.50 for that customer and job.  Then I opened the invoice that was $0.50 short and went to pay that invoice.  The invoice with the $0.50 due appears as well as the credit memo for $0.50.  I selected them both and finished the payment.  

If you went this way, perhaps you could set the account for the source of the credit memo to an appropriate expense account?  I'm just a beginner, so what I've done may not be allowed.

Kind regards,

Greg Feneis

On Tue, Apr 9, 2019 at 1:03 PM <rmomxtx at gmail.com <mailto:rmomxtx at gmail.com> > wrote:

Justin,

That is the way you would do it by normal accounting rules as I understand
them. However, you can't pay an invoice in GnuCash from an expense account.
The only accounts available in the receive payment window are assets, equity
and liability accounts. No income or expense accounts available therefore
not allowed. I've done it in a round about way but never have been satisfied
with the result. Keep looking for something better.

Thanks,
Roger

-----Original Message-----
From: Justin Haynes <justin at justinhaynes.com <mailto:justin at justinhaynes.com> > 
Sent: Tuesday, April 9, 2019 1:40 PM
To: rmomxtx at gmail.com <mailto:rmomxtx at gmail.com> 
Cc: GnuCash <gnucash-user at gnucash.org <mailto:gnucash-user at gnucash.org> >
Subject: Re: [GNC] Posting a bad debt

I think you have to pay it from an expense account like Expenses:BadDebt or
wherever you want to record that expense.

Sent from my iPhone

> On Apr 9, 2019, at 1:21 PM, <rmomxtx at gmail.com <mailto:rmomxtx at gmail.com> > <rmomxtx at gmail.com <mailto:rmomxtx at gmail.com> > wrote:
> 
> If you create an invoice that later becomes uncollectible, there is no 
> way to charge it off to a bad debt expense account from within the
invoice.
> Suggestions?
> 
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