[GNC] Accounting for partial payment of bill from vendor

[Derek Atkins]

Hi,

IANAA....  Having said that, the way I would handle it is to Process
Payment for $200, and then go in and split the transaction so you still
debit A/P the $200, but only credit $180 to your Checking and credit $20
to whatever counter-account you are using to keep track of your discounts.

-derek

On Sun, October 27, 2024 5:10 pm, Default User wrote:
> Hi!
>
> This should be a simple question, with a simple answer.
>
> Let's imagine that a customer purchases computer repair services from a
> vendor on 2024-10-27, for $200.00, due in 30 days.  There are no taxes
> involved.ￜ The vendor will give a 10% discount ($20.00) for early
> payment.
>
> Let's assume, for simplicity, that the customer has these starting
> Account balances:
> $0.00     Liabilities:Accounts Payable
> $0.00     Expenses:Repairs:Computer Repairs
> $200.00   Assets:Current Assets:Checking Account
>
> The customer uses GnuCash Version 4.13, from the default package
> repository in Debian 12 GNU/Linux.  He enters the bill from the vendor
> using: Business -> Vendor -> New Bill. This results in:ￜ
> $200.00 debit to Expenses:Repairs:Computer Repairs
>         $200.00 credit to Liabilities:Accounts Payable
>
> Then, later the same day, the customer pays the vendor $180.00 from his
> checking account.
> This results in:
> $180.00 debit to Liabilities:Accounts Payable
>         $180.00 credit to Assets:Curent Assets:Checking Account
>
> Since he has a $20.00 discount for early payment, he now owes the
> vendor nothing.
>
> So, how does the customer enter the transaction(s) in GnuCash?
>
> If he uses Business -> Vendor -> Find Bill -> Process Payment, entering
> a Payment amount of $180.00, the result is :
> $180.00 debit to Liabilities:Accounts Payable
>         $180.00 credit to Assets:Current Assets:Checking Account
>
> The Asssets:Current Assets:Checking Account balance is now $20.00,
> which is correct.
> But the Liabilities:Accounts Payable balance is $20.00, which should
> not be correct, as the customer received a $20.00 discount for early
> payment.
>
> But if the customer instead uses Business -> Vendor -> Find Bill ->
> Process Payment, entering a Payment amount of $200.00, the result is :
>
> $200.00 debit to Liabilities:Accounts Payable
>         $200.00 credit to Assets:Current Assets:Checking Account
> The Accounts Payable balance is now $0.00, which would seem to be
> correct, as the customer now owes the vendor nothing.
> But the Checking Account balance is now $0.00, which would of course
> not be correct.
>
> So, what is the correct way to handle this situation, so that these
> account balances result:
> $0.00   Liabilities:Accounts Payable
> $20.00  Assets:Current Assets:Checking Account
> $200.00 Expenses:Repairs:Computer Repairs
>
> ???
>
>
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-- 
       Derek Atkins                 617-623-3745
       derek at ihtfp.com             www.ihtfp.com
       Computer and Internet Security Consultant