Hi again - so everything worked the first time. I back off all the transactions and put the credit note in the AR account, selected two invoices and the credit note , credit note reduced by that amount and the payments showed. But I need to run another offset and the credit note no longer appears in the AR account. The system moved it to a liabilities account and automatically opens the liabilities account when processing a payment for that company. Is this how it should work?
> On Jun 28, 2019, at 6:14 PM, Adrien Monteleone > <adrien.montele...@lusfiber.net> wrote: > > No, No, No. > > Two different methods/systems. (I see my earlier apology for confusion was > foresight) > > > EITHER you transfer the credit from AR to a liability account and pay from > it, (really, only if a local CPA says you should) > > OR, you leave the credit note open till needed. (the sane and easy method I > recommend unless a local CPA has told you to do something different) > > > **aside** While an open credit note is ’technically’ a liability, it will > report as a negative asset. (a credit to AR) > > > I’m suggesting the easier and simpler path is to process your credit notes as > you always have, just don’t cut the check and pay them out. Leave them > ‘unpaid.’ > > Then when you need to apply their balance to a future invoice, do so by > selecting both the credit note(s) and the invoice(s) to be paid in the > process payment window. > > This will reduce the balance owed on the invoice by the amount offset by the > credit note(s). > > If the credit note(s) is/are more than the invoices you are trying to offset, > then GnuCash will retain the excess with the credit note to use on a > subsequent invoice. > > Regards, > Adrien > > >> On Jun 28, 2019, at 5:47 PM, Eric Rathhaus (general) >> <rathhaus_...@yahoo.com> wrote: >> >> So when I did my way, the liabilities account is reduced by the invoice >> doesn’t;t show the payment. Grr. >> >> So you’re suggesting leaving the credit n the AR account, which is held as a >> liability? But then how to I pay future invoices from it? >> >>> On Jun 28, 2019, at 12:32 PM, Adrien Monteleone >>> <adrien.montele...@lusfiber.net> wrote: >>> >>> 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.
