That’s one way to do it. Or, the simpler way is leave the credit note outstanding and use it to offset an invoice when needed.
Regards, Adrien > On Jun 28, 2019, at 1:58 PM, Eric Rathhaus (general) <rathhaus_...@yahoo.com> > wrote: > > Thanks. > > I followed your instructions but the credit note when printed appears as an > invoice to my client with the credit showing as an amount owed. In my > accounts it does appear as a “payment” in my AR account. > > I’m a little confused as to steps 2 and 3 now. If I understand you, I will > proceed to process a payment of the AR account to the liabilities account for > the entire amount of the credit. Then, I begin to process payments against > new invoices thru the liabilities account until it reaches zero. Correct? > >> On Jun 27, 2019, at 11:29 PM, Adrien Monteleone >> <adrien.montele...@lusfiber.net> wrote: >> >> Nope. >> >> 1. Create the credit note and assign the line items either back to the same >> original income account(s) used, or to a new one along the lines of “Returns >> & Allowances” or “Refunds” or something similar if you want to keep track of >> this separately. (this is considered a ‘contra account’ because its normal >> balance is opposite of what is expected) >> >> 1a. Post the credit note. (should default to be assigned to AR) >> >> 2. Then ‘pay’ it with the liability account you created. >> >> This will affect your books at each step like so: >> >> 1a. Income is debited either directly or via the contra account >> 1a. AR is credited for the amount of the credit note >> 2. AR is debited for the amount of the credit note >> 2. The Liabilities:Credit Payments account is credited (your now tracking a >> pre-payment liability owed to the client) >> >> The only step that should be different in this process than what you were >> doing before is step 2. Instead of paying with the checking account and >> printing a check, you’re transferring the customer’s AR balance to a >> liability account. >> >> Step 1 - the credit note itself, should be the same as before. >> >> There will then be a new step 3 - which is where you ‘pay’ a future invoice >> with all or part of the balance in the new liability account. >> >> ----- >> >> *NOTE* >> >> If you don’t need to keep track of the pre-payment as a liability (not >> necessary unless a CPA advised it) then just skip creating that special >> account and don’t use it. >> >> Simply leave the credit note (still created as always) outstanding till it >> is needed to offset a future invoice. You don’t even have to send it to the >> client if they don’t need it. >> >> When you need to offset a future invoice, process a payment, choose BOTH the >> credit note and the invoice being offset. Enter any additional payment being >> made and assign that to the appropriate asset account. Complete the payment. >> >> Mind you, this is probably the best route to take. It will allow you to >> still see the overpayment/pre-payment in their account report, and you can >> send them a statement that reflects this. The option with the liability >> account makes this very difficult. >> >> Sorry if I created any confusion. With the original limited info, I was just >> offering all the options I could think of. Which route you take is up to you >> as it best meets your needs and requirements. >> >> Regards, >> Adrien >> >> >> >>> On Jun 28, 2019, at 12:39 AM, Eric Rathhaus (general) >>> <rathhaus_...@yahoo.com> wrote: >>> >>> Something didn’t;t work. I created a credit note for the client and >>> created a new account “Credit Prepayments) under Liabilities. When >>> creating the note, instead of selecting an income account, I selected the >>> new liabilities account and then posted the note. I then tried to process >>> a payment for an outstanding invoice using the credit note but nothing >>> happened. Where did I go wrong? >>> >>>> On Jun 26, 2019, at 9:09 PM, Eric Rathhaus (general) >>>> <rathhaus_...@yahoo.com> wrote: >>>> >>>> Thanks! >>>> >>>>> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone >>>>> <adrien.montele...@lusfiber.net> wrote: >>>>> >>>>> In that case, certainly, you need to use credit notes. >>>>> >>>>> I don’t see any reason why this ‘wouldn’t work from an accounting >>>>> standpoint’ but if you find a problem, instead of cutting a check to the >>>>> customer as payment for the credit note, combine this with option #2 I >>>>> listed, and this time, use that Liabilities:Customer Deposits account to >>>>> ‘pay’ the credit note. This will show you have a liability to them and >>>>> then you can decrease it by using it to later pay for future work. The >>>>> credit note is cleared out instantly and you still track the money, >>>>> however, any Aging Report or Customer Report will no longer reflect this >>>>> deposit liability as a credit to them. You’d have to handle that part >>>>> manually in an outside spreadsheet. (you could export the Customer/Aging >>>>> Report to one sheet tab, export an Account or Transaction Report to >>>>> another in the same workbook, and then devise a 3rd tab with references >>>>> to those two to create the proper consolidated report) >>>>> >>>>> Note that doing it this way really isn’t necessary as GnuCash will track >>>>> your overall AR and the balance for each customer if you just leave the >>>>> Credit Notes hanging around until applied as future payments. >>>>> >>>>> I’d say you should speak to a local CPA, and then if you still have >>>>> options, which one you go with would be a matter of personal preference. >>>>> >>>>> Regards, >>>>> Adrien >>>>> >>>>>> On Jun 26, 2019, at 8:51 PM, Eric Rathhaus (general) via gnucash-user >>>>>> <gnucash-user@gnucash.org> wrote: >>>>>> >>>>>> Hi Geert - >>>>>> >>>>>> I already issued the invoices and processed my clients payments against >>>>>> the invoices. These payments are for filing fees to the US government >>>>>> for which I subsequently cut checks. I created a job for this client >>>>>> that I use to invoice these fees alone. The size of the filing fees is >>>>>> too high for me to provide my client short-term loans to cover and then >>>>>> invoice later. My client, in turn, won’t issue a payment without an >>>>>> invoice. So I issue an invoice to my customer to get the prepayment. >>>>>> There are some complicated legal reasons why once per year some of the >>>>>> filing fees won’t be cashed by the government. The rest of the year >>>>>> everything is fine as I just ensure the client paid all the invoices for >>>>>> the special job and then bill for my work and other expenses on invoices >>>>>> for each specific job. This year I have over $12k of funds I need to >>>>>> return to the client somehow. In the past I created a credit note under >>>>>> the special job and sent my client a check. This year they want me to >>>>>> use the credit to offset invoices for subsequent work. I like the idea >>>>>> of creating a credit note under the special filing fee job I use for >>>>>> these payments and then applying the credit against other invoices I >>>>>> issue but I’m not sure if it will work from an accounting standpoint. >>>>>> >>>>>>> On Jun 26, 2019, at 1:29 PM, Geert Janssens >>>>>>> <geert.gnuc...@kobaltwit.be> wrote: >>>>>>> >>>>>>> The way I understand your scenario I believe you can model what the >>>>>>> customer >>>>>>> does almost one to one into gnucash actions. >>>>>>> >>>>>>> 1. Customer prepays for expenses -> Create a payment for that customer >>>>>>> using >>>>>>> Business->Customer->Process Payment >>>>>>> You can choose to map this payment to outstanding invoices or not. If >>>>>>> you >>>>>>> don't, it will simply register a prepayment for the customer. >>>>>>> >>>>>>> 2. At some point you send an invoice to the user -> Create this invoice >>>>>>> using >>>>>>> Business->Customer->New Invoice... and post it. >>>>>>> >>>>>>> 3. Now you can choose - does your invoice have (some of) the prepaid >>>>>>> expenses >>>>>>> ? If so, apply (part of) that prepayment to your invoice using Business- >>>>>>>> Customer->Process Payment >>>>>>> After this there may be an outstanding balance the customer still has >>>>>>> to pay. >>>>>>> >>>>>>> 4. If the customer pays that outstanding balance, create the payment >>>>>>> via >>>>>>> Business->Customer->Process payment. >>>>>>> >>>>>>> Then repeat for the next cycle/invoice. >>>>>>> >>>>>>> If you are importing your payments instead of manually entering them, >>>>>>> you can >>>>>>> also select the payment in the respective account, right-click and >>>>>>> choose >>>>>>> "Assign as payment..." instead of the above mentioned "Process Payment" >>>>>>> >>>>>>> As Adrien also suggests at any time you could look at the Receivables >>>>>>> Aging or >>>>>>> Customer report to see what's the customer's current balance. >>>>>>> >>>>>>> Regards, >>>>>>> >>>>>>> Geert >>>>>>> >>>>>>> Op woensdag 26 juni 2019 21:52:43 CEST schreef Adrien Monteleone: >>>>>>>> You have at least 2 options I can think of at the moment: >>>>>>>> >>>>>>>> #1 - continue to issue credit notes in your system, but don’t send >>>>>>>> them out >>>>>>>> or pay them with a check. When you have the next positive invoice, >>>>>>>> ‘pay’ a >>>>>>>> portion (or all) of that invoice with the credit note. Simply process a >>>>>>>> payment, select the credit note line and an invoice line you want to >>>>>>>> apply >>>>>>>> it to in the top part of the window. GnuCash will offset the invoice >>>>>>>> with >>>>>>>> the credit note for you. If the credit note is more than the invoice, >>>>>>>> it >>>>>>>> will retain the left over as remaining AR credit to be used on >>>>>>>> subsequent >>>>>>>> invoices. You can see the customer’s balance any time either by >>>>>>>> looking at >>>>>>>> an AR aging report, or a Customer Report. Outstanding credit notes >>>>>>>> appear >>>>>>>> in the Invoices Due Reminder window. >>>>>>>> >>>>>>>> #2 - If your client regularly pays in advance based on an estimate and >>>>>>>> you >>>>>>>> invoice later, instead of applying the payment to an invoice, apply it >>>>>>>> to a >>>>>>>> Liabilities:Customer Deposits account. Then when you create and post >>>>>>>> the >>>>>>>> final invoice, process a payment for it from this account. You could >>>>>>>> keep a >>>>>>>> separate deposit account for each customer but that might get tedious. >>>>>>>> You >>>>>>>> can run a report on the account sorted by payee to show that info and >>>>>>>> even >>>>>>>> keep that report open in a tab if desired, choosing to refresh it as >>>>>>>> needed. If this might only happen for pre-paid expenses, then you can >>>>>>>> still >>>>>>>> use this method, but only for the pre-paid expense part, which you >>>>>>>> could >>>>>>>> (or not) choose to invoice separately. >>>>>>>> >>>>>>>> Regards, >>>>>>>> Adrien >>>>>>>> >>>>>>>>> On Jun 26, 2019, at 1:46 PM, Eric Rathhaus office <e...@ewrlaw.com> >>>>>>>>> wrote: >>>>>>>>> >>>>>>>>> Hi - I have a client for whom I have many jobs. On some of these >>>>>>>>> jobs, >>>>>>>>> the client prepaid expenses that I did not use. In the past, I’ve >>>>>>>>> always >>>>>>>>> created a credit note for a refund and sent the client a check. >>>>>>>>> However, >>>>>>>>> my client prefers instead that I credit this amount towards future >>>>>>>>> work. >>>>>>>>> I’m not sure how to accomplish this cleanly. I could keep a running >>>>>>>>> total of the amount and discount from the total prepayment until it’s >>>>>>>>> used up. But this seems clunky and maybe not the best practice. Any >>>>>>>>> other suggestions on how to account for the refund against future >>>>>>>>> work? >>>>>>>>> >>>>>>>>> Kind regards, >>>>>>>>> >>>>>>>>> Eric W. Rathhaus >> >> _______________________________________________ >> 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.
