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Accounting question
by Dan Katz-2
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An invoice may bill for items that are applied to several different
accounts, e.g. time billing, equipment, tax, etc. How should partial payments be posted to the accounts? Is it always proportional or are there other formulas? thanks! Dan ++++++++++++++++++++++++++++++++++ Dan Katz Outside Technology San Anselmo, CA http://www.outsidetech.com ++++++++++++++++++++++++++++++++++ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Mikey-3
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Dan,
Perhaps some elaboration would be helpful. The short answer is "yes". ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Dan Katz-2
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Mikey.
> Perhaps some elaboration would be helpful. What else is there? I am woefully ignorant of the subtleties of accounting. This is for a vertical app which I hope may be used in various jurisdictions or countries. Is there local law that dictates how it's to be handled? So far Google hasn't been very helpful. Dan ++++++++++++++++++++++++++++++++++ Dan Katz Outside Technology San Anselmo, CA http://www.outsidetech.com ++++++++++++++++++++++++++++++++++ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by James Brown
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On 30/04/2008, at 7:32 AM, Dan Katz wrote: > An invoice may bill for items that are applied to several different > accounts, e.g. time billing, equipment, tax, etc. > > How should partial payments be posted to the accounts? Is it always > proportional or are there other formulas? > > thanks! > Dan Dan, when the sale is made, the transaction is as follows: Debtors: Debit $1100 TimeBill: Credit $600 Equip: Credit $400 TaxLiab: Credit $100 Then when you get paid first part, the transaction is simply: Debtors: Credit $200 Bank: Debit $200 So Debtors is now at $900, the unpaid amount of invoice. When remainder is paid, transaction is: Debtors: Credit $900 Bank: Debit $900 HTH, James. ********************************************************************** Better, faster, more powerful code. Learn how without leaving the office! http://www.4d.com/support/training.html 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Lee Hinde-2
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It might be worthwhile to ask an accountant... You know that of course.
On Apr 29, 2008, at 3:37 PM, Dan Katz wrote: > Mikey. > >> Perhaps some elaboration would be helpful. > > What else is there? I am woefully ignorant of the subtleties of > accounting. > > This is for a vertical app which I hope may be used in various > jurisdictions or countries. Is there local law that dictates how > it's to be handled? So far Google hasn't been very helpful. > > Dan > > > ++++++++++++++++++++++++++++++++++ > Dan Katz > Outside Technology > San Anselmo, CA > > http://www.outsidetech.com > ++++++++++++++++++++++++++++++++++ > > > ********************************************************************** > An all-new List box. More features, more power. > Headers, footers, cell formatting and other goodies. > See it here first! http://www.4d.com/livedemos > > 4th Dimension Internet Users Group (4D iNUG) > FAQ: http://www.4d.com/support/faqnug.html > Unsub: mailto:4D_Biz-Unsubscribe@... > Post: mailto:4d_biz@... > Options: https://lists.4d.com/mailman/listinfo/4d_biz > ********************************************************************** ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Tom Dillon-2
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Dan Katz sez:
>An invoice may bill for items that are applied to several different >accounts, e.g. time billing, equipment, tax, etc. > >How should partial payments be posted to the accounts? Is it always >proportional or are there other formulas? You could give the user a preference as to how partial payments are applied as a default (proportional, item order, lowest interest rate first, by amount, etc.), then allow them to override the default and apply any amount to each item, making sure, of course, that the total matches the payment. Or it could just pop up a flashing alert with instructions to call the person making the payment and scream at them until they pay in full. -- ------------------------------------------------------------------ Tom Dillon 900 S. Coors Dr. DataCraft Lakewood, CO 80228 TomDillon@... 720/962-4880 ------------------------------------------------------------------ This email will self destruct as soon as Tom Cruise returns to normal. ------------------------------------------------------------------ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Mikey-3
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Anyway, the short answer is "yes". There is no hard and fast rule on how
partial payments should be applied. It is more a matter of how the debt is accrued more than anything else. The easiest way to do this is when you book the sale book the resulting customer debt to Accounts Receivable. So, you would be crediting the various sales accounts (consulting, equipment, sales tax collected, etc.) and debiting A/R, which is an asset. Then when you receive the partial payment you would debit cash and credit A/R, which makes the transactions a lot simpler. This also makes the period-end simpler, as you aren't partially accruing the remaining A/R to Allowance For Doubtful accounts or somesuch. You should consult with your tax advisor on how to handle the various tax issues in case a debt carries over a period-end. Your state may require you to pay the sales tax on the assets you have sold, regardless of whether or not you have collected the money, for example. ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Dan Katz-2
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On Apr 29, 2008, at 4:54 PM, Lee Hinde wrote: > It might be worthwhile to ask an accountant... You know that of > course. I have asked standard practice questions of accountants in the past, so this suggestion frightens me. Dan ++++++++++++++++++++++++++++++++++ Dan Katz Outside Technology San Anselmo, CA http://www.outsidetech.com ++++++++++++++++++++++++++++++++++ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Dan Katz-2
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On Apr 29, 2008, at 5:26 PM, Tom Dillon wrote: > You could give the user a preference as to how partial payments are > applied as a default (proportional, item order, lowest interest rate > first, by amount, etc.), then allow them to override the default and > apply any amount to each item, making sure, of course, that the total > matches the payment. Yep, this strategy did occur to me. I'm intrigued by Mikey's suggestion though. It seems more accountantesque. Dan ++++++++++++++++++++++++++++++++++ Dan Katz Outside Technology San Anselmo, CA http://www.outsidetech.com ++++++++++++++++++++++++++++++++++ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Dan Katz-2
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On Apr 29, 2008, at 6:23 PM, Mikey wrote: > It is more a matter of how the debt is > accrued more than anything else. Most frequently, a deposit is placed with the order and the balance is paid on completion or billed after. > The easiest way to do this is when you book the sale book the > resulting > customer debt to Accounts Receivable. So, you would be crediting the > various sales accounts (consulting, equipment, sales tax collected, > etc.) > and debiting A/R, which is an asset. In essence, you take money that you haven't received from your left pocket and put it in your right and call it an asset? I bet this how those companies I own stock in show earnings. If this really is generally accepted procedure I can code for it. I'm uncomfortable that there's obviously some core principles I don't understand but I can live with that if the alternative is studying accounting for a few years. Dan ++++++++++++++++++++++++++++++++++ Dan Katz Outside Technology San Anselmo, CA http://www.outsidetech.com ++++++++++++++++++++++++++++++++++ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Lee Hinde-2
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On Apr 29, 2008, at 11:56 PM, Dan Katz wrote: > > On Apr 29, 2008, at 6:23 PM, Mikey wrote: >> It is more a matter of how the debt is >> accrued more than anything else. > > Most frequently, a deposit is placed with the order and the balance > is paid on completion or billed after. > > >> The easiest way to do this is when you book the sale book the >> resulting >> customer debt to Accounts Receivable. So, you would be crediting the >> various sales accounts (consulting, equipment, sales tax collected, >> etc.) >> and debiting A/R, which is an asset. > > In essence, you take money that you haven't received from your left > pocket and put it in your right and call it an asset? I bet this how > those companies I own stock in show earnings. > > If this really is generally accepted procedure I can code for it. > I'm uncomfortable that there's obviously some core principles I > don't understand but I can live with that if the alternative is > studying accounting for a few years. > People run on a cash basis. You don't count income until it is in your pocket. Larger entities will operate on an accrual basis. Income counts when it's promised. http://www.nolo.com/article.cfm/objectId/08E205EE-E8B6-4D25-A2B01C3AC318E291/111/277/237/ART/ ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Dan Katz-2
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On Apr 30, 2008, at 12:04 AM, Lee Hinde wrote: > http://www.nolo.com/article.cfm/objectId/08E205EE-E8B6-4D25- > A2B01C3AC318E291/111/277/237/ART/ Thanks Lee. That's the clearest explanation I've read. It actually makes some sense now. ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Peter Bozek
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On 29.4.2008, at 23:32, Dan Katz wrote: > An invoice may bill for items that are applied to several different > accounts, e.g. time billing, equipment, tax, etc. > > How should partial payments be posted to the accounts? Is it always > proportional or are there other formulas? Here, how my daughter learns accounting at the university, (issued) invoice is booked between debtor account (A/R) and different revenue account (received between A/P and expenses/goods/investment etc.) Payment is booked between bank (cash) and A/R (A/P) account, so it does not matter if it is full, partial or advanced - it is booked the same way. For advanced payment different rule may hold, but booking is still between A/R and money. It can happen that there is some taxes bound to payment, and in this case the tax is calculated proportionally, but this is very rare case. In this case, invoice is booked again accrued tax, and with payment there is another transaction generated between accrued tax / tax due accounts. Here only very small businesses can book only cash transaction. They would book payment between money and revenue (expense) accounts proportionally, however they are not required to keep complex account sheet, so they - mosty - do not have a structured revenue and expense accounts. Peter Bozek http://www.inforce.sk ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Bill Weale
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Dan--
You might consider offering your users a "hierarchy" of sources for the accounts to which sales get assigned. I've used as many as four sources in some systems: company default, item default, customer default and line item override--which itself could be optional based upon user privileges. This gives them a ton of flexibility in that it can accommodate virtually any scale of business and any level of accounting complexity. The account ID's (whether they are numbers or names is up to the user) can come from tables if you've included a G/ L system or they can come from lists if you've written the program with the intent that the hard-core accounting is to be done with a third-party program. Likewise, you can build a Receipts (payments) table "automatically" from the info used to create the invoices. This even gives the option of posting receipts to the line item level of detail. Bill PS If you are serious about developing and supporting an application which includes or is closely tied to accounting rules, imo it would really be worth your time to spend a few hours on the basic principles. Much simpler than learning a typical 4D plugin... ;-) --www On Apr 29, 2008, at 5:32 PM, Dan Katz wrote: > An invoice may bill for items that are applied to several different > accounts, e.g. time billing, equipment, tax, etc. > > How should partial payments be posted to the accounts? Is it always > proportional or are there other formulas? > > thanks! > Dan > > An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question
by Mikey-3
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Hey, Dan.
Now you've done it, Lee! Way to introduce Dan to the vocabulary! Anyway, yes, most firms run on the Accrual basis, for a slew of reasons, not the least of which is that your books tend to actually make sense to people who understand financial statements, e.g. banks, especially since financials tend to be reviewed on a year-over-year basis, so your fourth quarter and first quarter activity will often make the standard metrics somewhat meaningless to them if you go cash-basis. It also is generally more beneficial to you from a tax perspective, but I won't bore you with those details. It is significantly more complicated, even once you have the hang of it. I got my MBA...a long time ago, and have been (among other things) the Acting Controller (among other things) at our firm for several years, and I still make mistakes in some of the manual transactions we have to enter, which is why I have an outside accountant that checks over the books every month to fix those things. Cash accounting is far, far simpler, but your income and expenses tend to be lumpy, especially when you extend credit to your customers. ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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RE: Accounting question
by Randy Engle
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Dan,
Yes, this is a generally accepted principal. As someone said, it's call accrual basis accounting vs cash basis accounting. Most larger organizations do it this way. ************************************************ Randy Engle, Creative Director EngSoft Solutions/XC2 Software mailto:randy.engle@... www.xc2software.com ************************************************ > -----Original Message----- > From: 4d_biz-bounces@... [mailto:4d_biz-bounces@...] On > Behalf Of Dan Katz > Sent: Tuesday, April 29, 2008 11:57 PM > To: 4D Biz > Subject: Re: Accounting question > > > On Apr 29, 2008, at 6:23 PM, Mikey wrote: > > It is more a matter of how the debt is > > accrued more than anything else. > > Most frequently, a deposit is placed with the order and the balance > is paid on completion or billed after. > > > > The easiest way to do this is when you book the sale book the > > resulting > > customer debt to Accounts Receivable. So, you would be crediting the > > various sales accounts (consulting, equipment, sales tax collected, > > etc.) > > and debiting A/R, which is an asset. > > In essence, you take money that you haven't received from your left > pocket and put it in your right and call it an asset? I bet this how > those companies I own stock in show earnings. > > If this really is generally accepted procedure I can code for it. I'm > uncomfortable that there's obviously some core principles I don't > understand but I can live with that if the alternative is studying > accounting for a few years. ********************************************************************** An all-new List box. More features, more power. Headers, footers, cell formatting and other goodies. See it here first! http://www.4d.com/livedemos 4th Dimension Internet Users Group (4D iNUG) FAQ: http://www.4d.com/support/faqnug.html Unsub: mailto:4D_Biz-Unsubscribe@... Post: mailto:4d_biz@... Options: https://lists.4d.com/mailman/listinfo/4d_biz ********************************************************************** |
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Re: Accounting question |
