I am using Gnucash for my sole proprietorship, including the business functions (ie, invoicing). Overall, it works really well.
My work involves providing professional services to my clients. Each client file will typically be ongoing for several months. I charge clients for my work based on an hourly rate, and create, post, and send the client an invoice on a monthly basis for work done during that month, plus sales tax (in Ontario, Canada, where I live, this is the Harmonized Sales Tax or HST). Gnucash business features work great for this. When the client pays, I then process the invoice as “paid” in Gnucash, which updates the appropriate accounts accordingly. I can then use reports such as “Receivables aging,” “Job report,” or “Client report” to see the current status of my accounts receivable. It also updates my sales tax liability account (and keeps it out of my income accounts), so I know how much I’ve collected from clients that I will need to remit to the Canada Revenue Agency (“CRA”). Where things get a bit more complicated is when it comes time for me to prepare my income tax return. As I am not incorporated, I am taxed on a cash basis, ie, on actual cash received, rather than work done, in the calendar year. Similarly, my remittance of sales taxes collected are based on actual amounts collected, not just collectable. This means that for income tax purposes, I need to be able to show my accounts on a cash basis. Gnucash, when using business features, however, uses accrual. I do also need to know the amounts based on accrual. Though my income tax payable for the year is calculated on cash received, and my HST remittance is also based only on HST actually collected from clients, my income tax return still has to list all work done during the calendar year up to December 31, and all HST collectable, whether or not it has been actually invoiced to or paid by my clients. This is the information I need to provide for the 2025 tax year (figures, of course, changed for simplicity): *Income* *Invoiced amount (excluding HST)* *13% Harmonized Sales Tax (HST)* Invoices paid in 2025 10000 1300 Invoices unpaid as of Dec 31, 2025 2000 260 Work-in-progress to Dec 31, 2025, not invoiced in 2025 1000 130 Total work (paid and unpaid) to Dec 31, 2025 *13000* *1690* I will actually only be taxed on and will only have to remit the HST from the first line, but CRA presumably wants to know what’s coming up for next year. All the information needed to create the report appears to already be in Gnucash, as by the time it comes to doing my taxes (due April 30), I will have completed and sent the invoices for all work done in 2025. However, I could not see how to prepare a report in Gnucash that would easily provide the above information. To get the above figures, I had to get out a spreadsheet and do the calculations manually, with all the potential introduction of errors that introduces. I’d much rather rely on Gnucash to do the math for me. I expect that this is something that could be made easier depending on how I set up my accounts; I’ve read through some other posts where people in similar situations have set up separate accounts for invoices unpaid and paid, but it seemed that this may mess up the existing Gnucash Accounts Receivable / Invoicing setup, which I’m hesitant to do. Any suggestions on how best to set this up would be appreciated. Thanks in advance! _______________________________________________ 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.
