> \On Aug 27, 2019 w35d239, at 7:36 AM, Michael Hendry 
> <hendry.mich...@gmail.com> wrote:
> 
> 
> I was thinking Mike meant that there was something intrinsically incompatible 
> with cash-based accounting which happened when Business Features were added. 
> But you’re saying that it’s only if there are posted and unpaid invoices 
> outstanding at year-end that this is a problem.

Even more precisely, it is only a problem if you include the affected accounts 
in your reports. Having posted and outstanding invoices is fine because there 
will be a separate mechanism to ‘realize’ income on a cash basis. (and a 
separate account for that which *will* get included in reports)

Here’s a little detail:

Invoice Posted
--------------

Dr. A/R                         $50
        Cr. Income:Pledges              $50

Accrual method, ‘Income’ = $50
Cash method, ‘Income’ = 0

This is because in accrual accounting, you ‘realize’ income when it is 
‘earned’. Posting an invoice, means you’ve already ‘earned’ it. If you were to 
include all income accounts in the income statement, it would show you an 
income of $50, which is incorrect on a cash basis. Creating a separate 
cash-basis income account solves this.


Invoice Paid
------------

Dr. Cash                        $50
        Cr. A/R                         $50
Dr. Income:Pledges              $50
        Cr. Income:Receipts             $50

Accrual method, ‘Income’ = 0
Cash method, ‘Income’ = $50

(note, you have to do the second part of the above manually or via SX, the 
first Dr./Cr. pair is done with the ‘process payment’ business feature.)

Now, you’ve moved the ‘accrued’ income to a ‘cash’ income account, when you run 
the Income Statement report, *only* include the cash account - all will be well 
even if the ‘accrued’ account is not zero yet - that is, has outstanding 
invoices. This is also why you don’t have to ‘clear up’ outstanding invoices at 
year end. (unless unpaid pledges reset to ‘zero’ at that time.)

Your Income Statement would show an income of $50 which *is* correct now, 
because you’ve received the money. Since you are only reporting on the 
Income:Receipts account, it doesn’t matter that the Income:Pledges account 
might reflect some unpaid invoices - it won’t factor into the report.


> 
> I presume that an unposted invoice can be deleted, so it would be possible to 
> prepare invoices when (for example) a member opted in to the Foundation 
> Dinners, and to review unposted invoices periodically - especially in the 
> closing weeks of the year.

You wouldn’t necessarily have unposted invoices. But regardless of posted or 
unposted, you can’t delete them. You can however assign them to a ‘placeholder’ 
customer, and/or zero out all the info. The usual recommendation is to change 
the invoice number to something like “use next” so you can spot it easy in an 
invoice ‘find’, edit the invoice, and re-use it later.

Regards,
Adrien
_______________________________________________
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.

Reply via email to