Re: [GNC] How to enter an accrued expense before Invoice?
Please read over my original reply again. I gave you the transaction templates that illustrate what you are looking for. Step 1 is recording the accrued expense. This should be dated when the expense was incurred. (when service rendered) Step 2 is entering the Vendor Bill which accomplishes the goal of moving the accrued expense to liabilities. (this should match the Vendor's date on their Invoice to you) Do *not* select the 'Expense' account here for your line item. That has already been affected in step 1. This time, you select the Accrued Expenses account instead. Step 3 would be paying the Bill, reducing liabilities. (this is the date you actually remit payment) - As for payments unlinking themselves when unposting a Bill/Invoice that is normal. It however should do its best to automatically re-link that payment when you re-post the document after editing. If it does not, you do not need to delete and re-enter the payment. Simply 'Process Payment' via the Toolbar Icon, and select both the document you are paying (bill or invoice) *and* the offsetting payment transaction. Adjust any details of the payment as needed *other than* the amount. (that was already entered the first time) Regards, Adrien On 5/15/24 1:57 AM, Wesley Brooks wrote: 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? ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] How to enter an accrued expense before Invoice?
That's only if you do everything manually as you describe. You could also use the Business Features to enter the Accountant's Invoice (Bill) to you, and then enter a payment to clear it. The line item(s) of that Bill, would connect to your Accrued Expenses account, though admittedly, not directly to any specific entry in it. (though you can roughly accomplish this with proper Description/Notes/Memo fields. Depending on your needs, you may want to investigate unchecking the box to 'accumulate splits' when posting a Bill, as that way, all line items will appear in the affected registers, rather than multiple line items to the same account being consolidated. Regards, Adrien On 5/15/24 3:01 AM, Wesley Brooks wrote: So in summary from how I now understand this GNUCash doesn't have any method of linking the accrued expense to the invoice, it just has to be processed manually. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] How to enter an accrued expense before Invoice?
I think I've cracked it. Thanks to Adrien and David for the pointers. I have created an Accrued Expenses account in: Liabilities:Accrued Expenses At the final day of my current accounting period I create a transfer which adds money to this account as such: Actions > Transfer Within the pop up: * Set date to final day of accounting period. * Description: Accrued expense for accounting period 221101-231031 * Amount: Expected accountant fee. * Transfer From: Liabilities:Accrued Expenses * Transfer To: Expenses:Professional Fees:Accounting When the invoice from the accountant is received I return the funds from the accrued accounts: Actions > Transfer Within the pop up: * Set date to that of invoice. * Description: Transfer from Accrued expenses for accounting period 221101-231031 * Amount: Previously expected accountant fee. * Transfer From: Expenses:Professional Fees:Accounting * Transfer To: Liabilities:Accrued Expenses So in summary from how I now understand this GNUCash doesn't have any method of linking the accrued expense to the invoice, it just has to be processed manually. Thanks! On 14/05/2024 22:14, Adrien Monteleone wrote: This is essentially a basic accounting question, not so much 'how to do this in GnuCash.' The exact accounts used are up to you, but generically between an accounts such as: Dr. Expenses:Professional Services Cr. Liabilities:Accrued Expenses When the invoice is received, draw down the Accrued Expenses account to an Accounts Payable account: Dr. Liabilities:Accrued Expenses Cr. Liabilities:Accounts Payable (when you pay the invoice, you'll draw down the Accounts Payable account to whatever Asset account you used as a source of funds, e.g., Assets:Checking, as with any other Vendor Bill) In the case of using the GnuCash features, you can enter the accrued expense manually or via an SX. (Scheduled Transaction) Then when the accountant's invoice is received, enter a Vendor Bill in GnuCash with the line items posting to the relevant Accrued Expenses account, and posting the entire Bill to the relevant Accounts Payable account. The date of booking the Accrued Expense should be when the expense was incurred, thus, when you received service from the accountant. The date of the Bill should be the date of the accountant's invoice. The date of the payment is the date you effectively paid it. (usually the 'tender' date, such as post-marking if sent by snail mail) There are also 'received' and 'cleared' dates in some cases, but those are not always relevant to when a debt was considered 'paid' but that will depend on your specific jurisdicition and circumstances. (those may be relevant to reconciling your bank/credit account however, if it factors in.) As always, this isn't accounting advice - ask your accountant! Regards, Adrien On 5/14/24 8:39 AM, Wesley Brooks wrote: 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? ___ gnucash-user mailing list gnucash-user@gnucash.org 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. -- 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 ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] How to enter an accrued expense before Invoice?
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 AccountingCR xxx where the sum of xxx over your accoutning period will be roughly equal to the annual value of the accounting charges . 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 Expense:Accrued Accounting CR zzz Liability:Accounts Payable CR + 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 + zzz Asset: Bank:Cheque CR + zzz where zzz was credited to the accrued expense account (invoice larger than accrued amount by zzz) and replacing with -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
Re: [GNC] How to enter an accrued expense before Invoice?
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 AccountingCR xxx where the sum of xxx over your accoutning period will be roughly equal to the annual value of the accounting charges . 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 Expense:Accrued Accounting CR zzz Liability:Accounts Payable CR + 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 + zzz Asset: Bank:Cheque CR + zzz where zzz was credited to the accrued expense account (invoice larger than accrued amount by zzz) and replacing with -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. > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > 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 gnucash-user@gnucash.org 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.
Re: [GNC] How to enter an accrued expense before Invoice?
This is essentially a basic accounting question, not so much 'how to do this in GnuCash.' The exact accounts used are up to you, but generically between an accounts such as: Dr. Expenses:Professional Services Cr. Liabilities:Accrued Expenses When the invoice is received, draw down the Accrued Expenses account to an Accounts Payable account: Dr. Liabilities:Accrued Expenses Cr. Liabilities:Accounts Payable (when you pay the invoice, you'll draw down the Accounts Payable account to whatever Asset account you used as a source of funds, e.g., Assets:Checking, as with any other Vendor Bill) In the case of using the GnuCash features, you can enter the accrued expense manually or via an SX. (Scheduled Transaction) Then when the accountant's invoice is received, enter a Vendor Bill in GnuCash with the line items posting to the relevant Accrued Expenses account, and posting the entire Bill to the relevant Accounts Payable account. The date of booking the Accrued Expense should be when the expense was incurred, thus, when you received service from the accountant. The date of the Bill should be the date of the accountant's invoice. The date of the payment is the date you effectively paid it. (usually the 'tender' date, such as post-marking if sent by snail mail) There are also 'received' and 'cleared' dates in some cases, but those are not always relevant to when a debt was considered 'paid' but that will depend on your specific jurisdicition and circumstances. (those may be relevant to reconciling your bank/credit account however, if it factors in.) As always, this isn't accounting advice - ask your accountant! Regards, Adrien On 5/14/24 8:39 AM, Wesley Brooks wrote: 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? ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
[GNC] How to enter an accrued expense before Invoice?
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. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
