[GNC] Selling an unpaid invoice to another business at face value?

[Morgan Read]

Thanks Adrian,

All I'm attempting to discover is how - in gnucash - can I use what is 
owned by somebodyA to pay off what is owed by somebodyB?  What is the 
procedure for using what is owed by one person to relieve another of the 
debt they owe?

On paper, I would take the invoice to somebodyB, copy it and staple the 
invoice to the invoice to somebodyA and then place the invoice to 
somebodyA in the paid invoices shoe box.

I'm sorry if I'm sounding exasperated .

The legal position in the UK is that if I sell the debt from companyA to 
companyB then companyA will be liable for income tax or company tax 
(depending on whether the entity is a natural person or legal person - 
not that a natural person isn't also a legal person, but a limited 
company is only a legal person) on the returns they receive for the 
sale.  CompanyB will also be liable for any returns it receives on the 
debt purchased.  So, legally, there is a double taxation issue.  Please 
can we leave the legal stuff out of this - I am a lawyer.  It's not a 
legal question.

Thanks, in hope,
Morgan.

> I'm not sure that adds much clarity.
> 
> Your initial description appeared to be that you had two business 
> entities and you were transferring old debts owed to the first entity, 
> to a new one - where you control/own both.
> 
> Now it appears that you are 'selling a debt' owed by one entity, to 
> another who will ultimately pay it.
> 
> I'll refer you back to both Michael & David's reply in your linked thread:
> 
> #1 - (Michael) How would you do this on Pen & Paper accounting?
> 
> #2 - (David) This is a ultimately a legal question. Get that straight 
> first. Then once you get official advice on how to record this, you have 
> your answer, but if you are having trouble entering the transactions, we 
> can help.
> 
> We cannot advise you *how* this should be recorded. We can only help 
> with the mechanics in GnuCash.
> 
> -----
> 
> For a more general case of transferring the Receivables balance from one 
> 'customer' to another, you would need to employ an intermediary account.
> 
> Investigate the concept of 'Allowance for Doubtful Accounts' and 'Bad 
> Debt Expense'.
> 
> Regards,
> Adrien
> 
> On 12/5/23 7:52 AM, Morgan Read via gnucash-user wrote:
>> This is a follow up, with - I hope - a bit more precision and clarity - 
>> to this post:
>> https://lists.gnucash.org/pipermail/gnucash-user/2023-August/108615.html
>> 
>> I wish to sell an unpaid invoice made out to business A (old debtor) to 
>> another business B at face value - I raise an invoice to business B for 
>> the sale of the invoice with the value of the invoice made out to 
>> business A.  How do I transfer the new amount now owed by business B 
>> (new debtor) to clear the debt of business A?
>> 
>> I had thought that the process described clear an invoice against a 
>> credit note might be adapted to work.  However, it does not seem 
>> possible to get more than one customer to show in the Process Payment 
>> window.

-- 
Morgan Read

Grande Bretagne
Em: <email:mstuffATreadDOTorgDOTnz>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: OpenPGP_signature.asc
Type: application/pgp-signature
Size: 833 bytes
Desc: OpenPGP digital signature
URL: <http://lists.gnucash.org/pipermail/gnucash-user/attachments/20231205/61150765/attachment.sig>