[GNC] Accounting for partial payment of bill from vendor

Mon Oct 28 02:43:47 EDT 2024

Hi,

If you know the discount in advance, it can be added as a line in the bill (-20$) analyzed to the same expense account.  If the discount arises later, they should issue a revised invoice or credit note  but rarely do so you will have to enter it manually. Again, make sure the expense is analyzed correctly to properly reflect the expenditure on the project. 

Geoff
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> On 28 Oct 2024, at 00:59, Default User <hunguponcontent at gmail.com> wrote:
> 
> Hi, Murugan.
> 
> Thanks for the tip.
> I am not familiar with credit notes (yet). 
> But I will check it out.
> 
> 
> 
> 
>> On Sun, 2024-10-27 at 23:40 +0000, Murugan Mariappan wrote:
>> Since you are utilizing the business function to register a bill, a
>> more efficient approach would be to create a credit note for the
>> transaction. By doing this, all your reports will accurately reflect
>> the discount, making it easier for you to reference and track your
>> financial data.
>> Please review the attached image to see if this solution meets your
>> needs.
>> 
>> 
>> 
>> 
>> Saludos Cordiales
>> Murugan
>> From: gnucash-user <gnucash-user-
>> bounces+m.muruganandam=hotmail.com at gnucash.org> on behalf of Default
>> User <hunguponcontent at gmail.com>
>> Sent: 27 October 2024 18:55
>> To: Derek Atkins <derek at ihtfp.com>
>> Cc: gnucash-user at gnucash.org <gnucash-user at gnucash.org>
>> Subject: Re: [GNC] Accounting for partial payment of bill from
>> vendor 
>> Hi, Derek. Thanks for the reply.
>> 
>> I was thinking of doing something like that.
>> Maybe creating an Income:Discounts Received account, and crediting
>> $20
>> to that from Liabilities:Accounts Payable.
>> 
>> I had thought of doing that as a separate transaction, added directly
>> to the account registers. I did not think of adding a credit split to
>> the existing transaction, as I thought that might mess up however
>> GnuCash does its internal handling of payments using Business ->
>> Vendor
>> -> Find Bill -> Process Payment.
>> 
>> Since this would seem to be a common scenario, was surprised that I
>> could not seem to find a way to have GnuCash "handle it
>> automatically".
>> 
>> 
>> 
>> 
>>> On Sun, 2024-10-27 at 17:23 -0400, Derek Atkins wrote:
>>> 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.ï¿œ 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:ï¿œ
>>>> $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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