Re: [GNC] best accounting practice for refund

[Geert Janssens]

It took me a while to respond as I was on holidays :)

First off, I can't read the second screenshot, so I don't know what's in 
there.

In your first screenshot I see three transactions:
1. An "Invoice type" (I) transaction, named Credit Note 2019 (don't worry 
about it being called "Invoice type", that's the proper type for credit note 
transactions)

2. A "Lot Link type" (L) transaction, that handles the offsetting of Invoice 
368 and 374 with credit note 377.

3. A "Payment type" (P) transaction for a payment against supposedly the same 
customer. Is this one related to the payment you are having issues with ?

In any case, looking better at this it will be slightly more complicate to 
fix.

The easiest way out is probably to restart this payment after cleaning up the 
unwanted parts.

That would mean:
1. find the unwanted payment transaction to the liabilities account and delete 
it.
2. find the transaction that represents the offset between your invoice and 
credit note we're trying to correct here and delete it as well.
3. Create a new payment via Process Payment and this time set the payment and 
refund boxes to 0 after selecting the invoice and credit note to keep the 
remaining credit note balance open.

Regards,

Geert

Op zondag 14 juli 2019 01:17:36 CEST schreef Eric Rathhaus (general):
> Hi Geert -  You’re correct about what happened.  However, I can’t see how to
> change the offset. The transactions appear as follows in my AR account
> 
> 
> 
> The only  place I can see to reduce theis the payment transaction before gnu
> automatically sends the amount from AR to liabilities.  But I can’t edit
> that transaction.  Would I just delete it?
> > On Jul 3, 2019, at 10:50 PM, Eric Rathhaus (general)
> >  wrote:
> > 
> > Thanks, Adrien for your assistance and patience.
> > 
> >> On Jul 3, 2019, at 10:35 PM, Adrien Monteleone
> >>  wrote:
> >> 
> >> Short answer — yes.
> >> 
> >> Slightly longer answer — figure out what caused that to happen, undo it,
> >> and then redo the payment properly.
> >> 
> >> The reason for doing so rather than just creating a correcting entry is
> >> so that you learn what went wrong and don’t repeat the same situation in
> >> the future. (you’d also need to make good notations in the correcting
> >> entry so that far in the future, you don’t question why it is there)
> >> 
> >> I’d suspect that you chose the liability account as a source account like
> >> you’d choose some asset account. You don’t need to select an account
> >> when doing an offset.
> >> 
> >> Regards,
> >> Adrien
> >> 
> >>> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general)
> >>>  wrote:
> >>> 
> >>> So I did assign the credit note to the AR account and then processed two
> >>> payments by selecting the posted invoices and the credit note all in
> >>> the AR account.  I didn’t do anything else but somehow the remaining
> >>> balance of the credit note ended up in a liability account. Should I
> >>> just move it back to the AR account to keep it simple?>> 
> >> ___
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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Hi Bumping this thread to see if anyone has an idea how to proceed. 

> On Jul 16, 2019, at 10:43 AM, Eric Rathhaus (general) 
>  wrote:
> 
> Any thoughts on how to proceed?
> 
>> On Jul 13, 2019, at 4:17 PM, Eric Rathhaus (general) > > wrote:
>> 
>> Hi Geert -  You’re correct about what happened.  However, I can’t see how to 
>> change the offset. The transactions appear as follows in my AR account
>> 
>> 
>> 
>> The only  place I can see to reduce theis the payment transaction before gnu 
>> automatically sends the amount from AR to liabilities.  But I can’t edit 
>> that transaction.  Would I just delete it?
>> 
>>> On Jul 3, 2019, at 10:50 PM, Eric Rathhaus (general) 
>>> mailto:rathhaus_...@yahoo.com>> wrote:
>>> 
>>> Thanks, Adrien for your assistance and patience.  
>>> 
 On Jul 3, 2019, at 10:35 PM, Adrien Monteleone 
 mailto:adrien.montele...@lusfiber.net>> 
 wrote:
 
 Short answer — yes.
 
 Slightly longer answer — figure out what caused that to happen, undo it, 
 and then redo the payment properly.
 
 The reason for doing so rather than just creating a correcting entry is so 
 that you learn what went wrong and don’t repeat the same situation in the 
 future. (you’d also need to make good notations in the correcting entry so 
 that far in the future, you don’t question why it is there)
 
 I’d suspect that you chose the liability account as a source account like 
 you’d choose some asset account. You don’t need to select an account when 
 doing an offset.
 
 Regards,
 Adrien
 
> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general) 
> mailto:rathhaus_...@yahoo.com>> wrote:
> 
> So I did assign the credit note to the AR account and then processed two 
> payments by selecting the posted invoices and the credit note all in the 
> AR account.  I didn’t do anything else but somehow the remaining balance 
> of the credit note ended up in a liability account. Should I just move it 
> back to the AR account to keep it simple?  
> 
 
 
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>>> 
>> 

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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Any thoughts on how to proceed?

> On Jul 13, 2019, at 4:17 PM, Eric Rathhaus (general)  
> wrote:
> 
> Hi Geert -  You’re correct about what happened.  However, I can’t see how to 
> change the offset. The transactions appear as follows in my AR account
> 
> 
> 
> The only  place I can see to reduce theis the payment transaction before gnu 
> automatically sends the amount from AR to liabilities.  But I can’t edit that 
> transaction.  Would I just delete it?
> 
>> On Jul 3, 2019, at 10:50 PM, Eric Rathhaus (general) > > wrote:
>> 
>> Thanks, Adrien for your assistance and patience.  
>> 
>>> On Jul 3, 2019, at 10:35 PM, Adrien Monteleone 
>>> mailto:adrien.montele...@lusfiber.net>> 
>>> wrote:
>>> 
>>> Short answer — yes.
>>> 
>>> Slightly longer answer — figure out what caused that to happen, undo it, 
>>> and then redo the payment properly.
>>> 
>>> The reason for doing so rather than just creating a correcting entry is so 
>>> that you learn what went wrong and don’t repeat the same situation in the 
>>> future. (you’d also need to make good notations in the correcting entry so 
>>> that far in the future, you don’t question why it is there)
>>> 
>>> I’d suspect that you chose the liability account as a source account like 
>>> you’d choose some asset account. You don’t need to select an account when 
>>> doing an offset.
>>> 
>>> Regards,
>>> Adrien
>>> 
 On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general) 
 mailto:rathhaus_...@yahoo.com>> wrote:
 
 So I did assign the credit note to the AR account and then processed two 
 payments by selecting the posted invoices and the credit note all in the 
 AR account.  I didn’t do anything else but somehow the remaining balance 
 of the credit note ended up in a liability account. Should I just move it 
 back to the AR account to keep it simple?  
 
>>> 
>>> 
>>> ___
>>> gnucash-user mailing list
>>> gnucash-user@gnucash.org 
>>> To update your subscription preferences or to unsubscribe:
>>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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>>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
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>>> Please remember to CC this list on all your replies.
>>> You can do this by using Reply-To-List or Reply-All.
>> 
> 

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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Hi Geert -  You’re correct about what happened.  However, I can’t see how to 
change the offset. The transactions appear as follows in my AR account



The only  place I can see to reduce theis the payment transaction before gnu 
automatically sends the amount from AR to liabilities.  But I can’t edit that 
transaction.  Would I just delete it?

> On Jul 3, 2019, at 10:50 PM, Eric Rathhaus (general)  
> wrote:
> 
> Thanks, Adrien for your assistance and patience.  
> 
>> On Jul 3, 2019, at 10:35 PM, Adrien Monteleone 
>>  wrote:
>> 
>> Short answer — yes.
>> 
>> Slightly longer answer — figure out what caused that to happen, undo it, and 
>> then redo the payment properly.
>> 
>> The reason for doing so rather than just creating a correcting entry is so 
>> that you learn what went wrong and don’t repeat the same situation in the 
>> future. (you’d also need to make good notations in the correcting entry so 
>> that far in the future, you don’t question why it is there)
>> 
>> I’d suspect that you chose the liability account as a source account like 
>> you’d choose some asset account. You don’t need to select an account when 
>> doing an offset.
>> 
>> Regards,
>> Adrien
>> 
>>> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general) 
>>>  wrote:
>>> 
>>> So I did assign the credit note to the AR account and then processed two 
>>> payments by selecting the posted invoices and the credit note all in the AR 
>>> account.  I didn’t do anything else but somehow the remaining balance of 
>>> the credit note ended up in a liability account. Should I just move it back 
>>> to the AR account to keep it simple?  
>>> 
>> 
>> 
>> ___
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>> To update your subscription preferences or to unsubscribe:
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>> You can do this by using Reply-To-List or Reply-All.
> 
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Re: [GNC] best accounting practice for refund

[Geert Janssens]

As guess as to what might have happened:
When you select the invoice and credit note in the payment window, gnucash 
will automatically calculate the difference between them and set the payment 
or refund field to that amount. That is, it assumes you intend to fully "pay" 
for all the documents selected so far.
If you then just hit ok, it will create a payment or refund split for the 
difference amount to the account that was still selected as transfer account 
(which presumably was your liabilities account as gnucash remembers the last 
transfer account from a previous transaction).

If on the other hand you only want to use part of the credit note to pay the 
invoice, you have to tweak the fields in the lower half of the payment window. 
I think in your particular case you want to change the amount (payment or 
refund) to zero before clicking Ok.

Moving the split back to A/R is not a good idea in this case. It will probably 
confuse matters more. From what I understand your payment transaction will 
have three splits:
- One for the full invoice amount (in AR)
- One for the full credit note amount (in AR)
- One for the offsetting payment (in Liabilities)

The payment procedure as I describe it above on the other hand will only have 
result in two splits:
- One for the full invoice amount (in AR)
- One for the credit note amount offsetting the invoice (in AR)

So you could manually correct your payment transaction by
- Deleting the offsetting payment split
- Change the credit note split to be exactly the offset of the invoice

Regards,

Geert

Op donderdag 4 juli 2019 07:04:03 CEST schreef Eric Rathhaus (general) via 
gnucash-user:
> So I did assign the credit note to the AR account and then processed two
> payments by selecting the posted invoices and the credit note all in the AR
> account.  I didn’t do anything else but somehow the remaining balance of
> the credit note ended up in a liability account. Should I just move it back
> to the AR account to keep it simple?
> > On Jul 3, 2019, at 10:58 AM, Adrien Monteleone
> >  wrote:
> > 
> > If you didn’t involve a liability account initially, the remaining credit
> > on the credit note would sit in AR. But if you ‘paid’ the credit note
> > with a liability, you transferred that amount from AR to the liability,
> > which is the account you will ‘pay’ future invoices from when offsetting
> > with the credit.
> > 
> > Be mindful that the credit note should have been posted to AR initially.
> > 
> > Also that the credit note’s line items should have all been assigned to
> > some income account, NOT a liability account. You want to decrease your
> > income accounts with a credit note that the original invoice(s)
> > increased. Not sure I follow u here. The first transaction was an invoice
> > and payment to the business checking account. Now part of that payment is
> > the credit note.  I assumed that paying the invoices in the AR account
> > with the credit note is a reduction of an income account.
> > 
> > Here’s a simplified transaction walk through:
> > 
> > 
> > Original Invoice
> > -
> > Dr. Accounts Receivable $1000
> > 
> > Cr. Income  $1000
> > 
> > Original Payment by check
> > -
> > Dr. Undeposited funds   $1000
> > 
> > Cr. Accounts Receivable $1000
> > 
> > Depositing of check
> > -
> > Dr. Checking$1000
> > 
> > Cr. Undeposited Funds   $1000
> > 
> > Issuance of Credit Note
> > -
> > Dr. Income  $100
> > 
> > Cr. Accounts Receivable $100
> > 
> > IF you ‘pay’ (transfer) the credit note with a liability account
> > -
> > Dr. Accounts Receivable $100
> > 
> > Cr. Customer Deposits   $100
> > 
> > When you offset a future invoice with the liability
> > -
> > Dr. Customer Deposits   $100
> > 
> > Cr. Accounts Receivable $100
> > 
> > OR if you don’t involve a liability account at all, offsetting a future
> > invoice -
> > Dr. Accounts Receivable $100
> > 
> > Cr. Accounts Receivable $100
> > 
> > (in this case the money doesn’t move accounts, but gets ‘assigned’ to a
> > different document, from the credit note to the invoice)
> > 
> > Regards,
> > Adrien
> > 
> >> On Jul 3, 2019, at 12:15 AM, Eric Rathhaus (general)
> >>  wrote:
> >> 
> >> 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?> 
> > ___
> > gnucash-user mailing list
>

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

You’re welcome. Glad to help any time.

> On Jul 4, 2019, at 12:50 AM, Eric Rathhaus (general)  
> wrote:
> 
> Thanks, Adrien for your assistance and patience.  
> 
>> On Jul 3, 2019, at 10:35 PM, Adrien Monteleone 
>>  wrote:
>> 
>> Short answer — yes.
>> 
>> Slightly longer answer — figure out what caused that to happen, undo it, and 
>> then redo the payment properly.
>> 
>> The reason for doing so rather than just creating a correcting entry is so 
>> that you learn what went wrong and don’t repeat the same situation in the 
>> future. (you’d also need to make good notations in the correcting entry so 
>> that far in the future, you don’t question why it is there)
>> 
>> I’d suspect that you chose the liability account as a source account like 
>> you’d choose some asset account. You don’t need to select an account when 
>> doing an offset.
>> 
>> Regards,
>> Adrien
>> 
>>> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general) 
>>>  wrote:
>>> 
>>> So I did assign the credit note to the AR account and then processed two 
>>> payments by selecting the posted invoices and the credit note all in the AR 
>>> account.  I didn’t do anything else but somehow the remaining balance of 
>>> the credit note ended up in a liability account. Should I just move it back 
>>> to the AR account to keep it simple?  
>>> 
>> 
>> 
>> ___
>> gnucash-user mailing list
>> gnucash-user@gnucash.org
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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>> 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.
> 
> 


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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Thanks, Adrien for your assistance and patience.  

> On Jul 3, 2019, at 10:35 PM, Adrien Monteleone 
>  wrote:
> 
> Short answer — yes.
> 
> Slightly longer answer — figure out what caused that to happen, undo it, and 
> then redo the payment properly.
> 
> The reason for doing so rather than just creating a correcting entry is so 
> that you learn what went wrong and don’t repeat the same situation in the 
> future. (you’d also need to make good notations in the correcting entry so 
> that far in the future, you don’t question why it is there)
> 
> I’d suspect that you chose the liability account as a source account like 
> you’d choose some asset account. You don’t need to select an account when 
> doing an offset.
> 
> Regards,
> Adrien
> 
>> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general) 
>>  wrote:
>> 
>> So I did assign the credit note to the AR account and then processed two 
>> payments by selecting the posted invoices and the credit note all in the AR 
>> account.  I didn’t do anything else but somehow the remaining balance of the 
>> credit note ended up in a liability account. Should I just move it back to 
>> the AR account to keep it simple?  
>> 
> 
> 
> ___
> gnucash-user mailing list
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> To update your subscription preferences or to unsubscribe:
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Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

Short answer — yes.

Slightly longer answer — figure out what caused that to happen, undo it, and 
then redo the payment properly.

The reason for doing so rather than just creating a correcting entry is so that 
you learn what went wrong and don’t repeat the same situation in the future. 
(you’d also need to make good notations in the correcting entry so that far in 
the future, you don’t question why it is there)

I’d suspect that you chose the liability account as a source account like you’d 
choose some asset account. You don’t need to select an account when doing an 
offset.

Regards,
Adrien

> On Jul 4, 2019, at 12:04 AM, Eric Rathhaus (general)  
> wrote:
> 
> So I did assign the credit note to the AR account and then processed two 
> payments by selecting the posted invoices and the credit note all in the AR 
> account.  I didn’t do anything else but somehow the remaining balance of the 
> credit note ended up in a liability account. Should I just move it back to 
> the AR account to keep it simple?  
> 


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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

So I did assign the credit note to the AR account and then processed two 
payments by selecting the posted invoices and the credit note all in the AR 
account.  I didn’t do anything else but somehow the remaining balance of the 
credit note ended up in a liability account. Should I just move it back to the 
AR account to keep it simple?  

> On Jul 3, 2019, at 10:58 AM, Adrien Monteleone 
>  wrote:
> 
> If you didn’t involve a liability account initially, the remaining credit on 
> the credit note would sit in AR. But if you ‘paid’ the credit note with a 
> liability, you transferred that amount from AR to the liability, which is the 
> account you will ‘pay’ future invoices from when offsetting with the credit.
> 
> Be mindful that the credit note should have been posted to AR initially.
> 
> Also that the credit note’s line items should have all been assigned to some 
> income account, NOT a liability account. You want to decrease your income 
> accounts with a credit note that the original invoice(s) increased. Not sure 
> I follow u here. The first transaction was an invoice and payment to the 
> business checking account. Now part of that payment is the credit note.  I 
> assumed that paying the invoices in the AR account with the credit note is a 
> reduction of an income account.  
> 
> Here’s a simplified transaction walk through:
> 
> 
> Original Invoice
> -
> Dr. Accounts Receivable   $1000
>   Cr. Income  $1000
> 
> 
> Original Payment by check
> -
> Dr. Undeposited funds $1000
>   Cr. Accounts Receivable $1000
> 
> 
> Depositing of check
> -
> Dr. Checking  $1000
>   Cr. Undeposited Funds   $1000
> 
> 
> Issuance of Credit Note
> -
> Dr. Income$100
>   Cr. Accounts Receivable $100
> 
> 
> IF you ‘pay’ (transfer) the credit note with a liability account
> -
> Dr. Accounts Receivable   $100
>   Cr. Customer Deposits   $100
> 
> 
> When you offset a future invoice with the liability
> -
> Dr. Customer Deposits $100
>   Cr. Accounts Receivable $100
> 
> 
> OR if you don’t involve a liability account at all, offsetting a future 
> invoice
> -
> Dr. Accounts Receivable   $100
>   Cr. Accounts Receivable $100
> 
> (in this case the money doesn’t move accounts, but gets ‘assigned’ to a 
> different document, from the credit note to the invoice)
> 
> Regards,
> Adrien
> 
>> On Jul 3, 2019, at 12:15 AM, Eric Rathhaus (general) 
>>  wrote:
>> 
>> 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?
>> 
> 
> 
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> To update your subscription preferences or to unsubscribe:
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Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

If you didn’t involve a liability account initially, the remaining credit on 
the credit note would sit in AR. But if you ‘paid’ the credit note with a 
liability, you transferred that amount from AR to the liability, which is the 
account you will ‘pay’ future invoices from when offsetting with the credit.

Be mindful that the credit note should have been posted to AR initially.

Also that the credit note’s line items should have all been assigned to some 
income account, NOT a liability account. You want to decrease your income 
accounts with a credit note that the original invoice(s) increased.

Here’s a simplified transaction walk through:


Original Invoice
-
Dr. Accounts Receivable $1000
Cr. Income  $1000


Original Payment by check
-
Dr. Undeposited funds   $1000
Cr. Accounts Receivable $1000


Depositing of check
-
Dr. Checking$1000
Cr. Undeposited Funds   $1000


Issuance of Credit Note
-
Dr. Income  $100
Cr. Accounts Receivable $100


IF you ‘pay’ (transfer) the credit note with a liability account
-
Dr. Accounts Receivable $100
Cr. Customer Deposits   $100


When you offset a future invoice with the liability
-
Dr. Customer Deposits   $100
Cr. Accounts Receivable $100


OR if you don’t involve a liability account at all, offsetting a future invoice
-
Dr. Accounts Receivable $100
Cr. Accounts Receivable $100

(in this case the money doesn’t move accounts, but gets ‘assigned’ to a 
different document, from the credit note to the invoice)

Regards,
Adrien

> On Jul 3, 2019, at 12:15 AM, Eric Rathhaus (general)  
> wrote:
> 
> 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?
> 


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Re: [GNC] best accounting practice for refund

[John Griessen]

On 6/26/19 8:51 PM, Eric Rathhaus (general) via gnucash-user wrote:

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.


Since you are dealing with government and could be audited, I would ask the 
customer to receive a check
as refund, then buy more services with another check of theirs so as to clearly 
document this for an audit trail.

But, if they really want you to hold money and pay current invoices with it, using the liabilities account made just for them 
seems sane and auditable.


On 7/3/19 12:15 AM, Eric Rathhaus (general) via gnucash-user wrote:
> 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?


Seems good.  If you pay the last of that liabilities account out and still need more to pay invoices, you can ignore the suggested 
account to pay from and then reprint the invoice with payments sown and send them that

to ask for a check for the remaining amount.

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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

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 
>  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) 
>>  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 
>>>  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) 
  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 
>  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 invoic

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

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)  
> 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 
>>  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) 
>>>  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 
  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 requirem

Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

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 
>  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) 
>>  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 
>>>  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) 
  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) 
>  wrote:
> 
> Thanks!
> 
>> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
>>  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. 

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

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)  
> 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 
>>  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) 
>>>  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) 
  wrote:
 
 Thanks!
 
> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
>  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 de

Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

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 
>  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) 
>>  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) 
>>>  wrote:
>>> 
>>> Thanks!
>>> 
 On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
  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.
 
 

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

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) 
>  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) 
>>  wrote:
>> 
>> Thanks!
>> 
>>> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
>>>  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 
  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 witho

Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

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)  
> wrote:
> 
> Thanks!
> 
>> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
>>  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 
>>>  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  
 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,

Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Thanks!

> On Jun 26, 2019, at 7:41 PM, Adrien Monteleone 
>  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 
>>  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  
>>> 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 cr

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

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 
>  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  
>> 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 loo

Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

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  
> 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  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 

Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

You’re welcome. That would work for existing excess pre-payments that were 
already applied to an existing invoice. But for future such cases, probably 
option #3 would be the simplest unless you really need to issue credit notes 
for some reason.

I guess otherwise, it is a personal preference.

Regards,
Adrien

> On Jun 26, 2019, at 5:36 PM, Eric Rathhaus (general)  
> wrote:
> 
> Thanks Adrien.  I think option 1 sounds best as it is one client with 
> multiple jobs.  
> 
>> On Jun 26, 2019, at 12:52 PM, Adrien Monteleone 
>>  wrote:
>> 
>> 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  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
>> 
>> 
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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Thanks Adrien.  I think option 1 sounds best as it is one client with multiple 
jobs.  

> On Jun 26, 2019, at 12:52 PM, Adrien Monteleone 
>  wrote:
> 
> 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  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
> 
> 
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Re: [GNC] best accounting practice for refund

[Eric Rathhaus (general) via gnucash-user]

Thanks, Derek.  But the refund comes from several jobs for which I sent one 
invoice in advance to cover costs.  Subsequently those costs were not incurred 
for some but not all the jobs. And how does the credit note get accounted for 
when using the sum to pay for future invoices?
> On Jun 26, 2019, at 1:24 PM, Derek Atkins  wrote:
> 
> You would only need a credit note if a client cancelled their contract and 
> wanted (part of) their deposit back.
> 
> -derek
> Sent using my mobile device. Please excuse any typos.
> On June 26, 2019 10:21:56 PM Tim Quinn  wrote:
> 
>> Many of my wife’s tutoring clients will prepay for several sessions (to get 
>> scheduling preference and a slight price discount). I create a separate 
>> invoice for each client visit (that way the customer report shows the 
>> payments and individual sessions nicely), and after posting each invoice I 
>> pay it using the remaining balance from the prepayment. GnuCash keeps track 
>> of all that very nicely as Adrien described.
>> 
>> I have never used credit notes for this, though. GnuCash knows that the 
>> subsequent invoices and the prepayment involve the same customer so it’s 
>> really easy to pay those later invoices using what’s left of the prepayment.
>> 
>> I am not seeing the value in adding credit notes into this picture. Am I 
>> missing something?
>> 
>> Thanks.
>> 
>> - Tim
>> 
>>> On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
>>>  wrote:
>>> 
>>> 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  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
>>> 
>>> 
>>> ___
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>>> gnucash-user@gnucash.org
>>> To update your subscription preferences or to unsubscribe:
>>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
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>>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
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Re: [GNC] best accounting practice for refund

[Tim Quinn]

Yes, that’s more along the lines of what I thought a credit memo would fit for.

That said, there are cases in which a client pays full rate for one session, 
then decides to convert to a package of sessions. I record the “ex post facto” 
discount to apply to that first session as a credit memo and use that in paying 
the next session. 

I could probably just record the discount as a line in the invoice for the next 
session, but that requires me to remember to do that later and GnuCash is 
better at remembering things than I am.

- Tim

> On Jun 26, 2019, at 3:24 PM, Derek Atkins  wrote:
> 
> You would only need a credit note if a client cancelled their contract and 
> wanted (part of) their deposit back.
> 
> -derek
> Sent using my mobile device. Please excuse any typos.
> On June 26, 2019 10:21:56 PM Tim Quinn  wrote:
> 
>> Many of my wife’s tutoring clients will prepay for several sessions (to get 
>> scheduling preference and a slight price discount). I create a separate 
>> invoice for each client visit (that way the customer report shows the 
>> payments and individual sessions nicely), and after posting each invoice I 
>> pay it using the remaining balance from the prepayment. GnuCash keeps track 
>> of all that very nicely as Adrien described.
>> 
>> I have never used credit notes for this, though. GnuCash knows that the 
>> subsequent invoices and the prepayment involve the same customer so it’s 
>> really easy to pay those later invoices using what’s left of the prepayment.
>> 
>> I am not seeing the value in adding credit notes into this picture. Am I 
>> missing something?
>> 
>> Thanks.
>> 
>> - Tim
>> 
>>> On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
>>>  wrote:
>>> 
>>> 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  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.
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>>> You can do this by using Reply-To-List or Reply-All.
>> 
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Re: [GNC] best accounting practice for refund

[Geert Janssens]

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  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
> 
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Re: [GNC] best accounting practice for refund

[Adrien Monteleone]

Thanks Tim,

I forgot about that method, so:

#3 - enter a payment from a customer without choosing an invoice to post it 
against. GnuCash will retain that amount as a pre-payment you can apply later 
as needed. (same procedure as outlined in #1) Individual customer balances are 
available from the Receivables Aging Report or a Customer Report.

I’m going to look over the wiki and documentation, and if this or more isn’t 
there, document it under "Using GnuCash”. This general question seems to come 
up often enough on the list.

Regards,
Adrien

> On Jun 26, 2019, at 3:20 PM, Tim Quinn  wrote:
> 
> Many of my wife’s tutoring clients will prepay for several sessions (to get 
> scheduling preference and a slight price discount). I create a separate 
> invoice for each client visit (that way the customer report shows the 
> payments and individual sessions nicely), and after posting each invoice I 
> pay it using the remaining balance from the prepayment. GnuCash keeps track 
> of all that very nicely as Adrien described.
> 
> I have never used credit notes for this, though. GnuCash knows that the 
> subsequent invoices and the prepayment involve the same customer so it’s 
> really easy to pay those later invoices using what’s left of the prepayment.
> 
> I am not seeing the value in adding credit notes into this picture. Am I 
> missing something?
> 
> Thanks.
> 
> - Tim
> 
>> On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
>>  wrote:
>> 
>> 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  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


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Re: [GNC] best accounting practice for refund

[Derek Atkins]

You would only need a credit note if a client cancelled their contract and 
wanted (part of) their deposit back.


-derek
Sent using my mobile device. Please excuse any typos.
On June 26, 2019 10:21:56 PM Tim Quinn  wrote:

Many of my wife’s tutoring clients will prepay for several sessions (to get 
scheduling preference and a slight price discount). I create a separate 
invoice for each client visit (that way the customer report shows the 
payments and individual sessions nicely), and after posting each invoice I 
pay it using the remaining balance from the prepayment. GnuCash keeps track 
of all that very nicely as Adrien described.


I have never used credit notes for this, though. GnuCash knows that the 
subsequent invoices and the prepayment involve the same customer so it’s 
really easy to pay those later invoices using what’s left of the prepayment.


I am not seeing the value in adding credit notes into this picture. Am I 
missing something?


Thanks.

- Tim

On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
 wrote:


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  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



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Re: [GNC] best accounting practice for refund

[Tim Quinn]

Many of my wife’s tutoring clients will prepay for several sessions (to get 
scheduling preference and a slight price discount). I create a separate invoice 
for each client visit (that way the customer report shows the payments and 
individual sessions nicely), and after posting each invoice I pay it using the 
remaining balance from the prepayment. GnuCash keeps track of all that very 
nicely as Adrien described.

I have never used credit notes for this, though. GnuCash knows that the 
subsequent invoices and the prepayment involve the same customer so it’s really 
easy to pay those later invoices using what’s left of the prepayment.

I am not seeing the value in adding credit notes into this picture. Am I 
missing something?

Thanks.

- Tim

> On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
>  wrote:
> 
> 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  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
> 
> 
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Re: [GNC] best accounting practice for refund

[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  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


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