I noticed something about the business features that isn’t working as expected, or at least not optimally.
When entering a bill or invoice, each line item allows you to put a date. When posting that bill or invoice, only the posting date is used - not the individual line-item dates. While I can see that this behavior might make sense to most people, it seems to me to be a carry-over from the days of paper ledgers that is very inefficient. In order to abide the matching principle, expenses should be realized in the period they are incurred. Revenue should be realized when it is earned, that is, goods delivered or services rendered. In both cases, neither the generation of reports (bills and invoices in this case) nor the receipt of actual money, should influence the date that expenses or revenue are recognized. It is not uncommon to be sent a bill generated in one period for a previous period and not actually received until the 3rd period and possibly even paid in a 4th or later period. The same is possible for invoicing your customers. It is entirely possible to invoice a customer for work done in a previous period (or multiple previous periods - such as job-based billing) and not receive payment for it till much later. GnuCash has no issue with letting you post bills and invoices independent of actual money exchange. (the whole purpose of the business features) But it seems it does not allow you to recognize revenue and expenses in their proper periods. If I receive a bill dated 12/10/17 on 12/17/17 for expenses I incurred in November 2017, I have to artificially back-date the posting date of the bill. I can put the opening date as 12/10/17, but I can’t ‘post it’ to the date I actually entered the transaction in my books. (this might be an auditing issue later) I have to ‘fake’ the posting date to some day in November 2017 for the expense to show up as being realized in that period. To complicate things, it is quite possible, I receive this bill dated 12/10/17 on 12/17/17 listing charges incurred in not only November, but also the end of October, and possibly even early December. Another example is being pre-billed. I routinely receive a bill for a six-month auto insurance policy in the period prior to when it is due. I then use a SX to expense the insurance each month as it is ‘used.’ So the bill is generated on 11/17/17 due 12/26/17. I received it on 11/24/17. I can enter the bill the day I receive it and put the ‘opening date’ as 11/17/17, but if I post it the day I enter it, my "Assets:Current Assets:Pre-paid Expense:Auto Insurance" account increases as of 11/24/17. But I don’t actually pay this bill until say 12/20/17. The point when I pay the bill is the date I really have a pre-paid asset. NOT the date I post the bill. If I wait to post the bill till the actual date I pay it, I get no notice in the Bills Due Reminder and I don’t have an actual record of when I entered the bill. I could choose the ‘open date’ as the receipt date, but then I don’t have a place to put the actual bill date. There is no way with GnuCash I can choose a proper posting date that puts the relevant expenses being realized in their appropriate periods or in the case of pre-payments shifting assets at the appropriate times. The same can easily happen for invoicing customers. If I generate an invoice in December to a customer for work done in October and November, I can’t realize the appropriate revenue in each period. I can only choose one month or the other. (or more likely, December since that will be the posting date - which is entirely incorrect) To fix this, I’d have to make correcting entries all over the place. It seems to me, either there should be an option to post to a single date, post by line-item-date, or ALWAYS post by line-item date. (if they are all the same, then the posting date is all the same) I can see a complication with the ‘Accumulate Splits?’ option, but the two could be tied together. Splits can either only be accumulated for common dates and accounts, or else accumulating splits results in a single posting date. (otherwise, each split posts to its line-item date) Pre-paid expenses are a special case, but I should think it possible to address it with the business features somehow. I’ve thought of using special clearing accounts but I can’t seem to figure where they might go. Posting a bill for a pre-paid expense (but not yet actually paying it) produces a liability balanced by what exactly? You don’t yet have a new asset because you haven’t paid the bill yet. You don’t have an additional liability. You haven’t realized any income or expense and your equity position hasn’t changed. What should balance Liabilities:AP for an as yet un-paid pre-paid expense? How is anyone else dealing with this? Thoughts? Am I missing something? Regards, Adrien _______________________________________________ gnucash-user mailing list [email protected] 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.
