[GNC] Invoicing & payments with "coupons: I sell to clients

[Adrien Monteleone]

On 7/12/22 5:18 PM, Eric Hammond wrote:
> Revisiting the pre-paid invoice  (coupon, credit note ...) issue:
> 
> In standard accounting a prepaid debt (aka a coupon, credit note, etc) is booked as a liability.
> On paper, and as direct import of transactions into GnuCash, this works
> However, I abandoned the brute force transaction method since I really like the GnuCash Invoice and Bill features: so I started fresh with imported Invoices and Bills.
> 
> My real life example: client prepays for 13 1 hour tutoring sessions, $25 each; to be used over the next year:
> 1. New Invoice for the prepayment:
> 	 Dr.	$325 Assets: Receivables	Cr. 	$325 Liabilities: Prepaid
> 2. Process Payment for the coupons                                 	
> 	Dr. 	$325 Assets: Cash                         	Cr. 	$325 Assets: Receivables
> 
> I 'earn' payment for an individual session when it is complete.
> 3. New invoice for that session
>   	Dr. 	$25 Assets: Receivables		Cr. 	$25 Income: Tutoring
> 4. and pay for it from the prepay
> 	Dr. 	$25 Liabilities: Prepaid	 	Cr.	$25 Assets: Receivables
> 
> GnuCash, however, appears to only allow payment of an invoice from an asset.
> Is there a way GnuCash can accommodate this?

I'm curious why you raised an invoice for a payment against a 
coupon/credit note.

Why not just book a payment against 'no-invoice' for that 'customer'?

You should do this manually, using the Process Payment feature, not as 
an import as far as I'm aware so the Business Features link the payment 
transaction to a customer/client. If you have LOTS of pre-payments, then 
yes, you can import standard transactions, but then you still need to 
individually, right-click and 'assign as payment' for each one.

Then, when you earn the revenue, you raise the invoice and clear it with 
the pre-payment. (Step 1, enter & post invoice; Step 2, Process Payment 
to apply partial pre-payment to the invoice)

The Pre-Payment would end up something like:

Dr. Assets:Cash/Bank/Un-deposited Funds/...
Cr. Assets:AR

*note, a Credit balance in an Asset account is a 'contra' balance 
because Assets *normally* have Debit balances. Thus, if a 
customer/client has a negative/credit AR balance, that is 'contra' what 
is expected and technically, a liability, so no need for a special 
Liability:Pre-Paid account, the GnuCash Business Features handle all of 
this for you *and* give you nice reporting capabilities. That's the idea 
behind the respective AR/AP accounts and their linked reports/functions. 
(AP works like the mirror of AR with vendors that you owe instead of 
customers/clients that owe you.)

The Invoice would be something like:

Dr. Assets:AR
Cr. Income:Tutoring

*Applying the Pre-Payment would show up as:

Dr. Assets:AR
Cr. Assets:AR

*This doesn't show up as its own transaction, but effectively that's how 
it works. The best way to see this account balance effect is with a 
Customer Report and using the option to show Detailed/Simple 
'Transaction Links'. (so you can see which payments apply to which 
invoices and vice versa. I'm a fan of the Detailed option for the 
complete information it offers, but you may prefer Simple.)

I'm not certain why any 'coupon' scheme exists in this case. You can 
track unused pre-payments via Customer Reports. (functionally 'Statement 
of Account') You can then provide reports/statements to clients to show 
remaining pre-paid balance available for use by them as needed.

(note, I see you say you're reviving a previous discussion, but I don't 
see reference to it - I didn't dig through the entire digest you quoted, 
though it may have been there.)
> 
> Thanks for any help,
> 
> Eric Hammond
> 
> PS: Am I supposed to keep the rest of the messages below?

Please, "No." It is not 'good form' to quote the entire digest. The wiki 
covers this, but the ideal 'workflow' when using digest mode is:

1. Reply-all/Reply-List
2. Change your Subject Line to match your topic (copy paste if this is a 
reply, prepended with "Re:" without the quotes helps)
3. Remove *all* of the quotation except what you are replying to. (**TIP 
- select what you want to reply to *then* hit the Reply-all/List button, 
as most e-mail/list clients will then *only* quote what you selected, 
saving you lots of deletion work. It is okay to include the header 
portion of that message, and then you can copy/paste the subject as 
*your* subject easily.)

Regards,
Adrien