Thanks, Adrien,
Thats exactly what I've been doing since your last message to me,
editing the entry in my PayPal register.
Thanks so very much for your responses. I needed to get my thinking
right as to process. I now understand it much better and am progressing
quick;y towards getting 2018 up to date.
Best,
Tom
------ Original Message ------
From: "Adrien Monteleone" <adrien.montele...@lusfiber.net>
To: "gnucash-user" <gnucash-user@gnucash.org>
Sent: 12/8/2018 7:33:24 PM
Subject: Re: [GNC] How to Reclassify Invoice Amounts
Tom,
When you record the payment of the invoice, record the full amount.
Then either
make a separate expense transaction for the fee balanced against your PayPal
account/checking account. (depending on if you use the PayPal account and then
transfer afterwards)
or
edit the payment transaction (from the account register in went into - NOT from
the A/R register) to reduce the amount actually received, GnuCash will
calculate an Imbalance split line and you can just change the account on this
new split to the Bank Fees expense account. Do not change the A/R split.
(Don’t forget to copy the list on all replies so others can benefit from the
exchange.)
Regards,
Adrien
On Dec 8, 2018, at 1:18 PM, Tom Balaban <tbalaba...@gmail.com> wrote:
Many thanks, Adrien.
You have confirmed what I was thinking I had to do.
The remaining issue I'll have to deal with is PayPal. They automatically
withhold their service fee so we never see the full payment. Their statement
for reconciliation is net amount.
Tom
On December 8, 2018 1:48:09 PM Adrien Monteleone
<adrien.montele...@lusfiber.net> wrote:
You should really speak to a local CPA to get a clear direction and picture of
how you need to handle the various issues particular to your jurisdiction.
Revenue and expenses should not be in the same transaction and expenses should
certainly not be on an invoice except in rare cases where you pass them on
directly with the customer’s knowledge that you do so. (freight and other
logistical expenses are sometimes directly invoiced)
The revenue sharing would likely be handled as a pass-through similar to sales
taxes. You’ll book a transaction to something like a ‘revenue sharing due’
liability account. But unlike sales taxes, it should be handled separately and
should not appear on the invoice. It might instead be handled like a dividend
payment.
PayPal is just an expense. You can book it each time, or from a monthly
statement similar to how you would record merchant fees for credit card
receipts.
The insurance amount is an expense and should be booked when you ‘use’ it.
Many insurances are usually pre-paid, booked as assets and then expensed when
they are ‘used’. Adjust for your case as needed.
The remainder is just left over after everything else. You generally don’t record
it separately. (unless you book Retained Earnings periodically) You discover what
it is via an Income Statement. (P&L report)
Your invoice should result in:
Dr. Assets:Current Assets:Accounts Receivable $225.65
Cr. Revenue:Sales $225.65
The receipt of payment would be:
Dr. Assets:Current Assets:Checking $225.65
Cr. Assets:Current Assets:Accounts Receivable $225.65
Then you’ll create something similar to each of the following:
Dr. Expenses:Bank Fees $3.90
Cr. Assets:Current Assets:Checking $3.90
Dr. Expenses:Insurance $192.15
Cr. Assets:Current Assets:Checking $192.15
or
Dr. Expenses:Insurance $192.15
Cr. Assets:Current Assets:Pre-paid:Insurance $192.15
Dr. Revenue:Sales $13.73
Cr. Liabilities:Revenue-Sharing Due $13.73
When you actually pay your revenue-sharing partner:
Dr. Liabilities:Revenue-Sharing Due
Cr. Assets:Current Assets:Checking
Regards,
Adrien
On Dec 8, 2018, at 10:40 AM, tbalaban <tbalaba...@gmail.com> wrote:
I run a service organization that contracts with others on per item basis.
Therefore the amount I invoice is much greater than the amount we retain.
How do I reclassify the amount invoiced so that the various expenses related
to the transaction are booked but not shown on the invoice?
E.G., a service fee is $3.65 for 61 units or $225.65. Of this 1.75% may go
to PayPal, $192.15 will go to our insurance company, 13.73 will go to a
revenue-sharing partner leaving $15.82.
Before I started keeping track of sales by invoice I would just splt the
transaction. Bow that I'm using the A/R part of the system, can I do the
same thing but have the customer only see the amount due and not the
underlying splits?
Many thanks for any guidance you can provide.
--
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