Dear David,
I never got to read your explanation to my questions completely. Now that I did 
everything is a lot clearer to me and I want to thank you for taking the timein 
writing a detailed answer to me.
Thanks again and have a blessed day!
Martijn Heuts

      From: "gnucash-user-requ...@gnucash.org" 
<gnucash-user-requ...@gnucash.org>
 To: gnucash-user@gnucash.org 
 Sent: Sunday, July 30, 2017 12:00 PM
 Subject: gnucash-user Digest, Vol 172, Issue 43
   
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Today's Topics:

  1. Properly recording mixed/variable Invoice payment (Jason Cooper)
  2. Re: Cash Method and write off's (DaveC49)
  3. Re: Properly recording mixed/variable Invoice payment
      (Jason Cooper)
  4. Re: Properly recording mixed/variable Invoice payment (Maf. King)


----------------------------------------------------------------------

Message: 1
Date: Sat, 29 Jul 2017 22:24:12 +0000
From: Jason Cooper <gnuc...@lakedaemon.net>
To: gnucash-user@gnucash.org
Subject: Properly recording mixed/variable Invoice payment
Message-ID: <20170729222411.ga18...@io.lakedaemon.net>
Content-Type: text/plain; charset=us-ascii

All,

I've been using GnuCash to manage my company's books for almost a year
now.  Recently, my primary customer (whom I have little control over)
started mixing several reimbursements into one check.  So the history of
events goes like this:

15th: Send Invoice for services rendered this month
25th: Receive check for Invoice amount *plus*:
    - Any reimbursable expenses approved before the 9th
    - Any per-diem accrued to date

The kicker is that I have no idea which expenses are going to be
reimbursed this pay period, nor do I know how much per-diem they
calculated I should get (based on travel requests).  So I can't reflect
any of that when I cut the Invoice.

How on Earth do I track this correctly given the lack of information at
Invoice time?

thx,

Jason.


------------------------------

Message: 2
Date: Sat, 29 Jul 2017 17:00:01 -0700 (PDT)
From: DaveC49 <davidcous...@bigpond.com>
To: gnucash-user@gnucash.org
Subject: Re: Cash Method and write off's
Message-ID: <1501372801592-4692932.p...@n4.nabble.com>
Content-Type: text/plain; charset=us-ascii

Hi Martijn,

Gnucash is capable of supporting both cash and accrual accounting. The
business features (accounts receivable and accounts payable) are explicitly
accrual accounting based however as they record the income at the time the
invoice is created  normally on the date the service is rendered to the
client. 

The difference is primarily one of the date of the recording of the
transaction. In accrual accounting the timing of reporting the transaction
in your accounts is set primarily by when the transaction is entered into
i.e. when the agreement to perform the transaction is reached whereas cash
accounting is based on when the cash actually changes hands which, as in
your case can frequently, be some time later.

To do cash accounting in Gnucash you would have to not use the business
features and only record the transaction in your accounts when the payment
is received from the medical insurers. This would require a separate system
for recording your invoices to customers. It would be possible to maintain
two sets of books one on a cash basis and the other on an accrual basis but
this would require a lot of extra work.

Whether you can use cash accounting  will normally be determined by the
business and tax legislation in your jurisdiction(country). Some
jurisdictions have a threshold in turnover, below which you can apply to use
cash accounting and some require use of accrual accounting. 

Writing off the balance of the invoice seems like a reasonable approach
after receiving the medical insurance payment if the balance is
uncollectable. Again your local business and tax legislation can impact on
how this should be done and when and it would be a good idea to consult an
accountant locally who is experienced in your industry about how to best
handle this in your jurisdiction.

Have you looked at other reports other than the P&L e.g. Cash Flow to give
you a better idea of money flow particularly from a business management
point of view rather than just the tax perspective.

Your account of the treatment of a business loan is correct with regard to
the tax treatment in most juridictions. The principal component of the loan
repayment is still taxable as income. The principal component is recorded as
a reduction in the liability the loan represents to the business. As this
matches the reduction in assets that the principal component represents, it
does not affect your equity in the business. Income and expense accounts are
in practice temporary equity accounts used to record the change in equity
during an accounting period and as this component of the loan repayment
transaction does not result in a change in equity it does not appear in the
expense account.  

Another way of looking at it is that when you first take out the loan, your
bank account balance is increased and the liability account for the loan is
correspondingly increased, so there was no resulting change in equity
associated with taking out the loan amount for the principal. This means
there should no change in equity in repaying the principal. The interest
component however is not balanced by any change in equity when the loan is
taken out which is why it appears as an expense (a reduction in equity in
the current acoounting period). I hope the above makes it clearer rather
than further confusing the issue.


David Cousens





-----
David Cousens
--
View this message in context: 
http://gnucash.1415818.n4.nabble.com/Cash-Method-and-write-off-s-tp4692826p4692932.html
Sent from the GnuCash - User mailing list archive at Nabble.com.


------------------------------

Message: 3
Date: Sun, 30 Jul 2017 00:51:13 +0000
From: Jason Cooper <gnuc...@lakedaemon.net>
To: gnucash-user@gnucash.org
Subject: Re: Properly recording mixed/variable Invoice payment
Message-ID: <20170730005113.gb18...@io.lakedaemon.net>
Content-Type: text/plain; charset=us-ascii

All,

my current wip solution:

On Sat, Jul 29, 2017 at 10:24:12PM +0000, Jason Cooper wrote:
> I've been using GnuCash to manage my company's books for almost a year
> now.  Recently, my primary customer (whom I have little control over)
> started mixing several reimbursements into one check.  So the history of
> events goes like this:
> 
> 15th: Send Invoice for services rendered this month
> 25th: Receive check for Invoice amount *plus*:
>     - Any reimbursable expenses approved before the 9th
>     - Any per-diem accrued to date
> 
> The kicker is that I have no idea which expenses are going to be
> reimbursed this pay period, nor do I know how much per-diem they
> calculated I should get (based on travel requests).  So I can't reflect
> any of that when I cut the Invoice.
> 
> How on Earth do I track this correctly given the lack of information at
> Invoice time?

I basically have 3 A/R buckets,

  a) Invoices
  b) Reimbursed Expenses
  c) Per-Diem Reimbursement

(a) is fine and goes according to the textbook.
(b) I guess is ok because I can generate an Invoice I never send (the
customer wants an excel spreadsheet w/ receipts).  Then process payment
when I receive the check.
(c) is still tricky.  I *think* I can just generate a back-dated invoice
(that I also never send) that then gets paid.

Questions:  Is is possible to Process Payment for multiple invoices at
once?  Since that's what would be occurring, that'd be perfect.  Also,
Is it acceptable to have multiple buckets under A/R?  Last, is there a
way for me to be able to tell in a single account wether my travel
expenses are ahead of or behind my Per Diem reimbursements?

thx,

Jason.


------------------------------

Message: 4
Date: Sun, 30 Jul 2017 11:54:52 +0100
From: "Maf. King" <m...@chilwell.net>
To: gnucash-user@gnucash.org
Subject: Re: Properly recording mixed/variable Invoice payment
Message-ID: <1783840.HuVjhZVQEf@janus>
Content-Type: text/plain; charset="UTF-8"

On Saturday, 29 July 2017 23:24:12 BST Jason Cooper wrote:
> All,
> 
> I've been using GnuCash to manage my company's books for almost a year
> now.  Recently, my primary customer (whom I have little control over)
> started mixing several reimbursements into one check.  So the history of
> events goes like this:
> 
> 15th: Send Invoice for services rendered this month
> 25th: Receive check for Invoice amount *plus*:
>     - Any reimbursable expenses approved before the 9th
>     - Any per-diem accrued to date
> 
> The kicker is that I have no idea which expenses are going to be
> reimbursed this pay period, nor do I know how much per-diem they
> calculated I should get (based on travel requests).  So I can't reflect
> any of that when I cut the Invoice.
> 
> How on Earth do I track this correctly given the lack of information at
> Invoice time?
> 

Hi Jason,

with the obvious caveats that I'm in the UK and I'm not an accountant, so you 
may wish to check this with someone who knows your local rules & regs, I would 
observe the following for your consideration....

1. Reimbursement of expenses is not income.  I don't know about per diems,  I 
imagine that they could be taxable income.

2. You can edit an invoice in GC by unposting it then re-posting it.

3. You can make alterations to the payment transaction from the bank account 
side.

I would do the following.

Write the invoice out for what you do know - so the services for the month, 
which presumably uses an account like income:sales.  Add whatever you need to 
to claim the PD payment (possibly to income:PD) and ignore the total for the 
expenses, as you say that is listed on a spreadsheet.

When you come to record the payment, go back in to the invoice and alter the 
PD calculation to assign the correct number to income:PDs  (obviously, the 
custome doesn't need to see the revised invoice).  Then process payment for 
the total of that invoice (which should be less than the actual payment 
received)

I imagine you are able to accrue the expenses for repayment in GC, with an 
account structure like:
Assets:ReimbursableExps:Customer1
Assets:ReimbursableExps:Customer2
etc

so when you buy things on their behalf, you have a transaction between the 
appropriate expense accounts and the customer account above.  This will let 
you see quickly how much each customer owes at any given time.

After you've processed the payment for the invoice, go into the transaction in 
the bank account and add a split to Assets:Reimb:Customer1 and increase the 
total going into the bank account to reflect reality.

Hope this gives you some ideas.
Maf.




------------------------------

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