[GNC] Where to charge? Ins pays us, we pay vendor.

[Adrien Monteleone]

This is an accounting question and is a bit more than generic, you’d need to ask a local CPA.

Some questions to clear up before you ask them:


1. Do you record an asset to reflect the pending claim until paid? (also, what happens if it isn’t paid? see #3)

2. Or is this just a passthru? (like sales/VAT, the money goes through your hands, but it isn’t part of business operations)

3. How is the vendor involved? Do you have a liability to them (bill or otherwise) that the insurance payout satisfies? (hence, per #1, do you still owe them if the claim isn’t paid by the insurance company?)


Getting those straight will help you determine how to proceed.

Not all transactions involving Vendors/Customers (creditors/borrowers) need to involve either Expense or Income accounts. They might only affect Liabilities and/or Assets.

Once you have a clear picture of the full nature of the transaction(s) involved and official guidance, then we can help, if you need, to set up the accounts and/or structure the transactions.

Regards,
Adrien

> On Feb 11, 2020 w7d42, at 10:47 AM, Fran_3 via gnucash-user <gnucash-user at gnucash.org> wrote:
> 
> When an insurance claim occurs the insurance pays us and we pay the vendor.
> How to we charge the deposit from the insurance company and the payment to the vendor?
> I considered setting up an Expense Account named Insurance Transactions or Insured Events or whatever...
> Then allocating the insurance payment to that "Expense" account
> and then allocating the vendor payment to the same "Expense" account
> Or would you suggest just using the Insurance Payments Account where you record payments for the policy?
> How would you guys handle such an instance?
> Thanks for any help.