[GNC] Problems organizing accounts to process reimbursement of expenses

David Cousens davidcousens at bigpond.com
Sun Dec 15 17:39:47 EST 2019


It will depend upon whether you are maintaining separate books for your
personal accounts and your business accounts and separate bank accounts. 
The process Mike described would be appropriate where your books are totally
separate, i.e. you and your business are separate legal entities. From your
description it would appear you may be operating as what is called a sole
trader in Australia where you are not a separate legal entity from the
business and its assets and liabilities are your assets and liabilities and
vice versa.  There can still be a case for maintaining separate books in
this situation, particularly if the business operation is significant.

>From your description you do not appear to be maintaining separate books for
your business operation but have business specific accounts in your account
structure usually income and expense accounts if your business has no
significant assets for example that are associated with the business
operations. When do you apportion the bill between your personal use and
your business use? If you do it when you receive and pay the bill with your
credit card the transaction would be


Liability:Credit card                                        Cr xxxx
Expense:Personal:Electricity     Dr 0.9xxxx
Expense:Business:Electricity    Dr 0.1xxxx

Your annotations in the memo and description fields will need to  describe
what each split of the transaction is for e.g.  "Business use of household
electricity" and possibly reference to the basis on which you arrive at the
90%-10% split, if this is not a legislated amount specified by your relevant
legislation/regulations. in my case it was simply the percentage of the
floor area of the house occupied by my home office and covered utilities,
rates, maintenance etc. (the ATO is generous)  but other jurisdictions may
have other rules and this is where you will need local professional advice.  

This should be sufficient if you do not maintain a separate bank account for
the business and it is only where you maintain separate bank accounts you
will need to consider reimbursement of your personal account from your
business account. If you do have separate bank accounts come back and we can
come up with an alternative.

David Cousens





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David Cousens
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