Accounts Payable (or A/P) refers to the accounting of products or services which a company has bought and needs to pay off. This chapter will focus on Accounts Payable (or A/P). A/P refers to the accounting of products or services that your company has bought, for which payment needs to be scheduled. To setup GnuCash to work with handling accounts payable for a company, there are 2 preliminary things that must be done. The first thing to do is to build an appropriate Account Hierarchy and the second is to register the company in GnuCash. There are many different ways to setup a business account hierarchy. You can start with the Business Accounts setup which is available from the New Account druid, or you could build one manually. To access the prebuilt Business Accounts, start GnuCash and click on File -> New File and proceed until you see the list of available accounts, select Business Accounts. Most likely, the prebuilt Business Account hierarchy will not be perfect for your needs, you will need to perform some amount of manual adjustments for the accounts to function well with your situation. This chapter will present example account structures which you can add to your existing accounts. Accounts Payable (or A/P) refers to products or services bought by the company for which payment has not yet been sent. This is represented on the balance sheet as a liability, because the expectation is that you will have to pay for it. To use GnuCash's integrated accounts payable system, you must first setup an account (usually a sub-account under Liabilities) defined with account type A/Payable. It is within this account that the integrated A/P system will place transactions. Basic A/P Account Hierarchy: -Assets -Bank -Liabilities -Accounts Payable -Expenses -AP Expenses Note that you will need to add real asset accounts and real expense accounts to this hierarchy. But, the most important aspects of this hierarchy are that you need an expense account and an Accounts Payable account, with account type set to A/Payable. After you have built your account structure, you will want to register the GnuCash file as belonging to your company. To do so, add your Business Name, Address and GST number. Click on File -> Properties. Type the Business name and address, add an empty line and add the GST number: GST: 1234-5678RT. Click OK. GnuCash has an integrated accounts payable system. The transactions generated by the A/P system will be placed within the Accounts Payable account, as a record of what occurs, but you do not directly work within this account. Rather, you will principally be working with the 4 integrated GnuCash A/P application components, available from the sub-menu Business -> Vendors. These 4 application components are: Vendors are people or companies from which you buy products or services on credit. Bills represent the physical bill you receive from a vendor, requesting payment. A bill contains an itemized list of things you purchased. Jobs (optional) is where you register Vendor Jobs, a grouping mechanism by which you can group bills to a particular vendor. Process Payments is where you register money payments to a vendor to whom you owe money. In the next 4 sections of this chapter, the above 4 application components will be introduced. A vendor is a company or person from whom you purchase goods or services. The vendors must be register within the A/P system. To register a new vendor, enter the menu Business -> Vendor -> New Vendor. Fill in the appropriate general information about the vendor, such as Company Name, Address, Phone, Fax, etc. Below is a list of the other options: Identification - Vendor Number - can be any number you would like to refer to this vendor, or you may leave it blank and a number will be chosen automatically. Identification - Active - this check box is used to differentiate active vendors from inactive ones. Payment Address - Name - this is the contact name of the person to receive the payment. Notes - you can enter any text you would like to in this area, additional commentaries about this vendor. For example, the names of contact people from within the vendor's company. Payment Information - Currency - here you can specify what the default payment currency will be. Payment Information - Terms - here you can specify what the default payment terms will be. These terms must be preregistered using Business -> Billing Terms. Payment Information - Tax Included - this specifies whether tax has already been included in the bill. You can choose Yes, No, or Use Global. Yes means that the tax is already included in the bill, No means tax has not been included in the bill, and Use Global means to use the global tax table specified in the "Tax Table" option below. Payment Information - Tax Table - this allows you to specify a specific preregistered tax table to apply to bills from this vendor. Tax tables must be registered from the menu item Business -> Tax Table. This is what the New Vendor registration window looks like: New Vendor Registration Window New Vendor Registration Window To search for a preexisting vendor, use the Business -> Vendors -> Find Vendors application. From the results of the search, you can select a vendor to edit, or view. Find Vendor Window Find Vendor Window To return a list of all registered active vendors, set the search criterion to "matches regex", and place a single dot "." in the text field area. Then, click Find. The regular expression "." means to match anything. A bill is the paperwork you receive from a customer requesting payment for a product or services you purchased. GnuCash can be used to generate and track bills. When you receive a bill from a vendor and want to enter it into GnuCash, you must create a new bill. This is accomplished using the application available at Business -> Vendors -> New Bill. The New Bill window should be filled in appropriately: Invoice Info - Invoice ID (optional) - the identification number of the invoice as emitted by the vendor (IE: the vendor's internal number for this invoice). Invoice Info - Date Opened - the date the Invoice was emitted by the vendor. Billing Info - Vendor - the issuing vendor. Billing Info - Job (optional) - the vendor job to associate with this bill. Billing Info - Billing ID (optional) - the vendor's ID for the bill (e.g.: their invoice #). Can be left blank. Billing Info - Terms - the payback terms agreement for this bill, a list of preregistered terms is available within the pop up menu. Chargeback Project - Customer (optional) - the customer to associate with this bill, for purposes of charging the customer later. Chargeback Project - Job (optional) - the customer job to associate with this bill. Notes (optional) - any notes concerning the bill go here. New Bill Registration Window New Bill Registration Window Once you fill in all the information for the new bill, you will be presented with the Edit Bill window. From the Edit Bill window you can enter an itemized list of things purchased on this bill, in a manner similar to how the account register works. Edit Bill Window Edit Bill Window There are 11 columns in the Invoice Entries area: Date - The date this item was sold Invoiced? - X means the item is attached to this invoice, an empty box means the item is not attached to this invoice. If the box is empty you can attach the item to the invoice by first selecting the item row and then clicking in this box. Description (optional) - what the item is called Action (optional) - user defined field. Can place Cost Center info here, or use one of the 3 predefined actions, Hours, Material, or Project. Expense Account - which expense account will be changed for this bill Quantity - how many of the items were sold to you Unit Price - the unit price of the item Taxable? - is this item taxable? X means yes, a blank field means no. Tax Included? - has the tax already been included in the unit price? X means yes, a blank field means no. Tax Table (optional) - this is a pop up menu of all the available tax tables. If you set the item as taxable and set that the tax has not been included in the unit price, then this tax table is used to compute the amount of tax. Subtotal (uneditable) - computed subtotal for this item (less tax) Billable - is this item billable to the chargeback customer/job? When you have finished entering all the items, Post the bill. When you have finished editing a bill, you should Post the bill. You do not have to post the bill, you can simply close it and return to it later, however you need to eventually post it when you are finished editing. Posting the bill will place the bill transactions into an accounts payable account. The Post Bill window will appear asking you to enter the Post Date, the Due Date, a Description, and Post to Account (from which you can select from a list of A/Payable accounts). Post Bill Window Post Bill Window To find a preexisting bill, use the Business -> Vendors -> Find Bill application. From the results of the search, you can select a bill to edit, or view. Note, before you can edit a preexisting posted bill, you will need to unpost it. You can use the optional GnuCash feature called Vendor Jobs to associate bills which fall under a single vendor. This is useful for when you have multiple "jobs" for the same vendor, and would like to view all the bills for one job. To use vendor jobs, you must create them using the Business -> Vendors -> New Jobs application. Once there, you will see the New Job window. The editable fields are: Job Info - Job Number (optional) - enter the number for this job. If left blank, a reasonable number will be chosen for you. Job Info - Job Name - the name you want to call this job. Owner Info - Vendor - the vendor associated with this job. Owner Info - Billing ID - the vendor's reference to this job (e.g. their PO Number). It's the "Billing Identification" that they require on your invoices to them. Job Active - toggles this job being active or not. This is useful to use when you have lots of inactive jobs, it is easier to find all the active ones. New Vendor Job New Vendor Job To find a preexisting vendor job, use the Business -> Vendors -> Find Job application. From the results of the search, you can select a job to edit, or view. Eventually, you will need to pay your bills. To do so, use the Process Payment application found in Business -> Vendors -> Process Payment. The Process Payment application consists of: Payment Info - Vendor - the vendor you wish to pay Payment Info - Date - the date you wish to make the payment, normally the current date. Payment Info - Amount - the amount of money to transfer in this payment. Payment Info - Num - the check number. Payment Info - Memo - any comments about this payment. Post To - the A/Payable account to post this transaction. Transfer Account - the account where the money will come from (a checking account for example) to make this payment. Below is the GnuCash Accounts Receivable payment window. Process Payment Process Payment Window