In that case, yes, I would just expense them as well. And you can do that with a manual transaction or a vendor bill—your choice.
Regards, Adrien > On Dec 15, 2018, at 5:37 PM, Tom Balaban <tbalaba...@gmail.com> wrote: > > Many thanks Adrien. > > I think your explanation works except for a minor detail, after the initial > payment is exhausted all payments are after the fact. > > Each month I submit a report of participant count for the prior month. They > will then send me a bill for the amount due. > > I don't think there is anything prepaid regarding these subsequent payments > so I'm pretty sure I can just expense them. > > Best, > Tom > > ------ Original Message ------ > From: "Adrien Monteleone" <adrien.montele...@lusfiber.net> > To: "Gnucash Users" <gnucash-user@gnucash.org> > Sent: 12/15/2018 4:41:12 PM > Subject: Re: [GNC] How To Handle Prepayments > >> I’m not sure I’m entirely following the timing exactly, but many insurances, >> and it looks like your’s falls in this category, are pre-paid. >> >> Thus they are assets until they are ‘used’. >> >> So when you make the initial payment: >> >> Dr. Assets:Current Assets:Pre-Paid Assets:Insurance >> Cr. Assets:Current Assets:Cash/Checking >> >> You can handle that with a Vendor bill and Payment if you like. >> >> As the insurance is ‘used’: >> >> Dr. Expenses:Insurance >> Cr. Assets:Current Assets:Pre-Paid Assets:Insurance >> >> This can be handled with a manual or scheduled transaction as your situation >> dictates. (which could also be a vendor bill, if you didn’t use one for the >> initial payment) >> >> Subsequent payments are likely still in advance, and so would go to increase >> the pre-paid asset first and then when used, they are expensed. >> >> There is no need for involving A/P accounts or credit memos to adjust them. >> (unless you opt for the vendor bill route, but you still shouldn’t need >> credit memos) >> >> I had a thread some months back on a similar topic and the issue is >> something to consider: >> >> I receive a bill about a month in advance of the due date every six months >> for auto insurance. If I pay that bill early, or on time, I am gaining a >> ‘pre-paid’ asset to be used up over the next six months. My problem wasn’t >> using the bills feature to handle this, or the expensing (I just set up a >> scheduled transaction for that part) but that I couldn’t post the ‘advance’ >> bill without it posting to my assets right away. Yet, it isn’t an asset till >> I actually pay it. I was wanting to take advantage of the bills due reminder >> for this bill. I had to settle on waiting to post the bill until I actually >> make the payment and forgoing the reminder. That way, my assets weren’t >> inflated early. Otherwise, everything else works out fine. >> >> Regards, >> Adrien >> >>> On Dec 15, 2018, at 3:06 PM, tbalaban <tbalaba...@gmail.com> wrote: >>> >>> My Company pays an initial payment to our insurer at the beginning of each >>> policy year. As we incur insurance costs based on event participants, that >>> initial payment is charged. After it is exhausted we get a monthly bill for >>> the amount due. In no case do we ever get the initial payment back. >>> >>> I'd like to treat the initial payment as a credit to insurer's A/P account >>> then each month create a bill for the amount payable. >>> >>> Is this the correct way to handle such a transaction? >>> >>> Assuming it is, how do I credit the amount due from whatever account I >>> posted the initial payment to? >>> >>> In practice we pay the initial payment in February, the start of our paolicy >>> year. Usually, in April or May, the initial payment is exhaused and we have >>> to send more money to pay that month's bill. I'm not at all clear on how to >>> post this situation. >>> >>> I'd appreciate knowing how to do this in GNUCash as well as any comments on >>> the applicable general accounting rules. In Quickbooks I could debit or >>> credit A/R or A/P diectly and selects the customer or vendor required. Since >>> that capabiity does not appear to be available in GNUCash, how do I post it? >>> >>> Many thanks for your already generous help. >>> >>> >>> >>> -- >>> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html >>> _______________________________________________ >>> gnucash-user mailing list >>> gnucash-user@gnucash.org >>> To update your subscription preferences or to unsubscribe: >>> https://lists.gnucash.org/mailman/listinfo/gnucash-user >>> If you are using Nabble or Gmane, please see >>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >>> ----- >>> 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 >> If you are using Nabble or Gmane, please see >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >> ----- >> 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 If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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