I will try to ask another way.
My normal process...
## Entering an Invoice from Vendor ##
Business > Vendor > New Bill:
* Set date opened to the date of the transaction - eg when received
the invoice.
* Select the vendor.
* Maybe add notes.
On the invoice entry page:
* Set each line/entry date to the same date as the date opened.
* Description, quantity, unit price needs no explanation.
* Set "Action" to hours for services and "Material" to bought things.
To be honest I don't know what this is used for. Will look it up
another time.
* Select the expense account, so in this case for accounting
Expenses:Professional Fees:Accounting.
* Post the invoice...
On the post invoice pop-up:
* Post date - same as opening again!
* Due date from invoice.
* Description - always try to remember to add this one. Really
frustrating when you forget - see other email about wanting to start
fresh!
* Post to account - I leave this as default Liabilities:Accounts Payable
## Paying a Due Invoice from Vendor ##
When the time comes I then process the payment:
Business > Vendor > Process Payment
* Set translation date to the date the money left my account.
* Select the Transfer Account to match where the money came from. In
my case Assets:Current Assets:Business Account
## ...return to discussion... ##
When following the above process GNUCash automatically creates entries
in Expenses:Professional Fees:Accounting and Liabilities:Accounts
Payable when the invoice is raised. Once past the due date for the
invoice it appears on the pop up from Business > Vendor > Bills Due Reminder
Once the bill is paid (using process above) GNUCash automatically adds
balancing entry to Liabilities:Accounts Payable and adds a deduction to
the Transfer account Assets:Current Assets:Business Account.
After the above bill entry and payment is completed the report in
Business > Vendor > Vendor Overview > MyAccountantLtd balances with no
mention of prepayments, or imbalances.
## ...return to my original question... ##
I understand what an accrued expense is, and how in theory it should
work. But I haven't seen how to enter it in a way that when I raise the
bill following the above process the debt moves from the Accrued
expenses to the Accounts payable account?
A little frustration with the system as it stands at the moment is that
if I subsequently need to edit a bill (wrong date, missed description
when posted, typo in line, etc), if I unpost it make a change then
GNUCash forgets the connection between the bill and the transaction that
cleared the bill. I then need to delete the payment that cleared the
bill and then re-enter it.
Does that explain the question better?
On 14/05/2024 22:37, David Cousens wrote:
Wesley,
you have to think through what the objective of the accrued accounting
expense is and that is to charge the expense to the expense account as
it accrues. You will eventually have to pay the money to the
accountant when he presents his invoice so the total accrued amount is
a liability for your business. On some regular basis (weekly/monthly
etc - asks your accountant for advice), most likely with a scheduled
transaction you could make an entry of the form:
Expense:Accrued Accounting DR xxx
Liability:Accrued Accounting CR xxx
where the sum of xxx over your accoutning period will be roughly equal
to the annual value of the accounting charges yyyy.
WHen you receive the invoice you would create an bill which transfers
the accrued liability to your accounts payable, i.e.
Liability:Accrued Accounting DR yyyy
Expense:Accrued Accounting CR zzz
Liability:Accounts Payable CR yyyy + zzz
where zzz is an adjustment for the amount the invoice exceed your
accrued accounting expenses in the liability account. ( if the amount
of the invoice is less than the accrued expenses you would debit the
Expense:Accrued Accounting account and subtract zzz from yyy in the
third line.
When you actually make the payment it is
Liability :Accounts Payable DR yyyy + zzz
Asset: Bank:Cheque CR yyyy + zzz
where zzz was credited to the accrued expense account (invoice larger
than accrued amount by zzz) and replacing with yyyy-zzz where the
invoice amount is less than the accrued amount by zzz.
There may be alternative ways of recording which may be jurisdiction
dependant - check with you accountant - that's what you are paying him
for. The aim is to use a value of the periodic accruals xxx which sums
pretty closely to the expected final invoice amount.
As always the above does not constitute specific accounting advice and
you need to discuss exactly what is required with your accountant.
David
On Tue, 2024-05-14 at 14:39 +0100, Wesley Brooks wrote:
Dear users,
I'm a basic level user of GNUCash, and generally enter transaction
details mostly by raising bills/invoices and subsequently processing
the
payments. The only exceptions to this are how I enter my salary
payments, and transfers between my company and private accounts
covering
director loans and repayments.
My accountant has added their charge for accounting and an accrued
expense on their submissions, long before they would raise an
invoice.
How do I generate an accrued expense so that it works with a
subsequently raised the invoice, and processed payment in the
following
year?
Thanks.
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--
Wesley Brooks PhD BEng
+44 (0) 1744 410490
+44 (0) 7833 067513
My in office time is non-standard, and currently Monday to Thursday
06:00 - 14:00.
*I do not expect anyone to respond or acknowledge emails outside of
their own usual working hours.*
Brewed Up Research Products & Services Limited
Unit 14, Catapult Too Parade Street Building, Parade Street, St Helens,
Merseyside, WA10 1LX.
Company Number: 11602997
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