[GNC] How to enter an accrued expense before Invoice?

[Adrien Monteleone]

This is essentially a basic accounting question, not so much 'how to do 
this in GnuCash.'

The exact accounts used are up to you, but generically between an 
accounts such as:

Dr. Expenses:Professional Services
   Cr. Liabilities:Accrued Expenses

When the invoice is received, draw down the Accrued Expenses account to 
an Accounts Payable account:

Dr. Liabilities:Accrued Expenses
   Cr. Liabilities:Accounts Payable

(when you pay the invoice, you'll draw down the Accounts Payable account 
to whatever Asset account you used as a source of funds, e.g., 
Assets:Checking, as with any other Vendor Bill)

In the case of using the GnuCash features, you can enter the accrued 
expense manually or via an SX. (Scheduled Transaction)

Then when the accountant's invoice is received, enter a Vendor Bill in 
GnuCash with the line items posting to the relevant Accrued Expenses 
account, and posting the entire Bill to the relevant Accounts Payable 
account.

The date of booking the Accrued Expense should be when the expense was 
incurred, thus, when you received service from the accountant.

The date of the Bill should be the date of the accountant's invoice.

The date of the payment is the date you effectively paid it. (usually 
the 'tender' date, such as post-marking if sent by snail mail) There are 
also 'received' and 'cleared' dates in some cases, but those are not 
always relevant to when a debt was considered 'paid' but that will 
depend on your specific jurisdicition and circumstances. (those may be 
relevant to reconciling your bank/credit account however, if it factors in.)

As always, this isn't accounting advice - ask your accountant!


Regards,
Adrien

On 5/14/24 8:39 AM, Wesley Brooks wrote:
> I'm a basic level user of GNUCash, and generally enter transaction 
> details mostly by raising bills/invoices and subsequently processing the 
> payments. The only exceptions to this are how I enter my salary 
> payments, and transfers between my company and private accounts covering 
> director loans and repayments.
> 
> My accountant has added their charge for accounting and an accrued 
> expense on their submissions, long before they would raise an invoice.
> 
> How do I generate an accrued expense so that it works with a 
> subsequently raised the invoice, and processed payment in the following 
> year?