I’d like to thank you for your time and response. You’ve cleared up a few things I was confused about, and made me feel better about how I was setting things up.
Aside from how you’ve categorized some of the accounts, it looks like my 1st example was right on the money (no pun intended), or at least pretty close. I’d like to go over each itemized line just to clarify a few things and make sure I understand. 1. Dr. Assets:Business:Current Assets:Bank $16.32 As I mentioned in my original post, the “Etsy” account is actually a real physical account, or at least we’re treating it that way. Monies from Etsy sales go into this account maintained by Etsy. If refunds are issued, those monies are used to reimburse the customer. Once a week, whatever balance is in the account is automatically transferred to my wife’s business checking account. So we simply treat the Etsy account just like a bank account. When transfers are made, we enter a transfer of monies from the Etsy account to a checking account. The Etsy account can also be used to make online purchases to other Etsy vendors. This is exactly how PayPal works (with the exception of automated transfers of deposits). In fact, Etsy customers can also make their purchases through PayPal. But of course, monies from that sale would go to a PayPal account and not Etsy. 2. Dr. Expenses:Business:Fees:Etsy Sale Fees $ .76 It looks like I’ve set this up correctly. 3. Dr. Expenses:Business:Cost of Goods Sold $ 5.00 We do not track cost of goods sold or track an inventory. My wife’s business (as mentioned) is very small. She puts together banners for special occasions (weddings, birthdays, etc.). It would be a nightmare (if not impossible) to try to determine the cost of supplies in putting one of these banners together. In addition, she makes so little money it would be far too much effort to try to do this extra work. Tax season is already hard enough as it is, and it takes me many weeks to complete every year. Ultimately, I don’t know if this is the right thing to do or not. But years ago I was advised that as long as we keep detailed records of her business expenses and sales, we should be fine. It seems to work out okay when we file schedule C. 4. Cr. Revenue:Sales:Product $10.00 I like your idea of the Revenue account vice the Income account. Both, of course, are income, but I guess this makes it a little more clear. I’m assuming you’d still keep a separate top level Income account for paychecks from my job (totally unrelated from the business)? 5. Cr. Revenue:Shipping $ 6.65 You are correct, my wife will collect shipping costs from her customers at time of sale, which will go into the Etsy account (and eventually her checking). Etsy does not handle any product directly. A couple of times a week she will make a trip to the post office to ship multiple packages to multiple customers and pay for all the postage at that time. She does not collect excess postage from customers. If a customer overpays, or it costs less to ship than expected, she always issues a refund back to the customer for excess postage. She feels bad and does not like customers paying more for shipping than what it really costs (unlike many other vendors). It’s interesting how you’ve categorized this. I’ve always considered shipping a business expense. In Quicken, I considered what we received from the customer for shipping as income, and then later, when it’s actually shipped, the cost as an expense. So actually, I guess I considered it both income and an expense. With that in mind, I thought that putting it under Expenses in GnuCash was the appropriate thing to do. I noticed that when it’s done this way the balance is negative when the customer has payed for shipping and then zeros out when the cost is incurred upon actual shipping. I’m assuming doing it your way (as Revenue) it would show as a positive value when the customer pays, and then gets zeroed out upon actual shipping. 6. Cr. Liability:Business:Sales Tax Payable $ 0.43 Actually, I was torn about this particular item. I thought about putting it in as a liability, but then every example I found online showed it as a business expense. Your explanation makes a lot of sense, and I agree with what you’re saying. Oh, and by the way, we only pay the sales tax to the state once a year instead of quarterly. The business generates about 99% of its sales from out of state. There are so little in-state sales that if we payed quarterly, we’d rarely owe anything due to the formulas and rounding used to calculate what’s owed. 7. Cr. Assets:Current Assets:Business:Inventory $ 5.00 See #3 above. 8. Dr. Expenses:Business:Postage Cr. Assets:Current Assets:Bank-Business Okay, I see what you’re doing now with postage. You’re considering it both an income and an expense. So that means you have two separate Postage (i.e. Shipping) accounts. I didn’t know if it was typical to do that kind of thing in GnuCash or double entry bookkeeping. I thought it was better to have a single account that monies go into and out of. I have another question unrelated to any of the above that I’m hoping you can help with. Is there any way to generate a report that shows refunds? I’ve been messing around with the various report types and cannot find any way to do this. I need to be able to see refunds for sales as well as postage refunds separately. Thanks again for all your help. -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org 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.
