Oliver, This is really a question for your accountant as he will be familiar with the legislation and accounting practice in your jurisdiction and the implications for this depending on whether your accounting has to be on a cash or accrual basis which will in turn depend on the taxation legislation in your jurisdiction.
The difference is primarily when you record the receipt of money and record it as income and when your taxation authority regards the income as having been earned. In cash accounting it is simple, it is regarded as income when you receive it (and an expense when you pay out actual cash) but whether you can use cash accounting or not will depend on the taxation law you are subject to. If your business is operated on a cash basis, you would record it as income when the deposit is received. This is unlikely for most significant businesses as in jurisdictions where cash accounting does apply there is usually an income or turnover threshold above which you must use accrual account and below which its use is optional and you may use cash accounting. In accrual accounting, your income is recorded when it has been earned, usually regarded to be when you have completed the job or provided the service to the client. If payments are progress payments conditional on having completed a given percentage of the full job, then, depending on legislation in your jurisdiction, you may be able to record the receipt of a progress payment as income when you invoice the client for it. I.e. you would invoice the client for the progress payment when you have completed the required percentage and the invoice would debit your accounts receivable account and credit an appropriate income account. Once you have your accountants advice on what is the appropriate accounting procedure to be used in your jurisdiction for the circumstances of your business, then we can offer help for ways in which GnuCash can be used to record transactions like deposits and progress payments. David Cousens On Sun, 2022-09-18 at 15:05 +0000, Oliver Turp wrote: > Hi, > > I was hoping to get advise on how to handle deposits (ie upfront payment > towards the eventful total fee). I thought initially maybe they should go down > as credit notes and then use that credit note towards the final invoice, but > the doc description of a credit note didn’t sound correct. If the job costs > $1,000 and I needed 50% upfront, then I do actually have $500 in my checking > account. > > Any help here would be great. > > Many thanks, > Oliver > > Sent from Mail<https://go.microsoft.com/fwlink/?LinkId=550986> for Windows > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > 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. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: 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.
