[GNC] Invoice system and Deffered Income

[Sergey Mende]

Hi Michael,

Thank you very much for your clarification. As I just responded to David, I
probably need to rethink thoroughly how the existing invoice system could
be applied for my needs.

Regards,
Sergey

On Tue, May 30, 2023 at 3:31 PM Michael or Penny Novack <
stepbystepfarm at comcast.net> wrote:

> On 5/29/2023 5:44 PM, Sergey Mende wrote:
> > Hi there,
> > I am trying to figure out if the existing customer invoice system is
> > suitable for my needs.
> > For simplicity, let's say I have the following accounts:
> >
> > Current (Bank)
> > Undetermined Income (Income, for bank account transactions just imported
> > from the online banking)
> > Deferred Income (Income, used at invoice creation to track invoices that
> > are posted and sent to the customers but not paid yet)
> > Income (for invoices that got paid, so the payment actually received as a
> > bank transaction and processed as a payment of an invoice)
> > Receivable (A/Receivable, for tracking invoices)
>
> No, sorry, but the invoices are part of the business system and only for
> use with accrual basis accounting. Can't be used for cash basis
> accounting, which is what I sense you are thinking about when you see
> ":receivables" as "deferred". You will been to familiarize yourself  of
> the differences between accrual basis accounting and cash basis accounting.
>
> In accrual based accounting, the "income" is earned when the invoice is
> sent, the customer legally obligated to pay and  the amount goes into an
> asset account "receivables". When the customer later actually pays (you
> mark it paid) that gets transferred to cash (you bank account). If you
> don't think of "receivables" as real money, look up what a "factor"
> does. In other words, "receivables" might be collateral for a loan or
> even sold.
>
> Michael D Novack
>
> PS: When some of us are using the term "deferred income" it is in the
> context of tax sheltered retirement accounts. Things like IRAs and 401Ks
> (but money going into Roth IRA is after tax, would not be deferred
> income). Thus I might have a 401K through work allowing me to
> contribute  before tax income up to the regulated limit with the
> employer matching up to 3% of salary. In other words, were I selecting
> 5% of my salary to go into the 401K THAT would be deferred income and so
> would the 3% matched by the employer. Not escaping income tax, just
> deferring it till after retirement as distributions are taken form the
> 401K.
>
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>