Accounts Receivable (or A/R) refers to products or services provided by the company on credit for which payment has not yet been received. The accounting needs of a business can be quite different from that of a person. Businesses have customers that owe money, vendors which are owed money, employee payroll, more complex tax laws, etc. GnuCash offers some business oriented features to help facilitate these needs. Accounts Receivable (A/R) and Accounts Payable (A/P) are used by businesses to record sales for which they are not immediately paid, or to record bills that they have received, but might not pay until later. These types of accounts are used primarily when you've got a lot of bills and receipts flowing in and out, and don't want to lose track of them just because you don't pay/get paid right away. For most home users, A/R and A/P are too complicated and confusing to be worth the effort. Accounts Receivable (or A/R) refers to products or services provided by the company on credit for which payment has not yet been received. This is represented on the balance sheet as an asset, because the expectation is that you will receive payment soon. To setup GnuCash to work with handling accounts receivable 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 exactly meet your needs, however it should be close enough that it is recommended you begin with it. You may need adjust some accounts manually for it to function well with your particular situation, but the defaults should be adequate for many situations. Accounts Receivable (or A/R) refers to products or services provided by the company on credit for which payment has not yet been received. This is represented on the balance sheet as an asset, because the expectation is that you will receive payment soon. To use GnuCash's integrated accounts receivable system, you must first setup an account (usually a sub-account under Assets) defined with account type A/Receivable. It is within this account that the integrated A/R system will place transactions. Basic A/R Account Hierarchy: -Assets -Checking -Accounts Receivable -Income -Sales You will need to add additional asset, expense, and income accounts to this hierarchy for it to be useful. But, the most important aspects of this hierarchy are the use of an income account and the Accounts Receivable asset account, with account type set to A/Receivable. You do not need to create an individual A/R account for each customer. GnuCash will keep track of customers internally and provides reports per-customer based on the internal tracking. 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 receivable system. The transactions generated by the A/R system will be placed within the Accounts Receivable 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/R application components, available from the sub-menu Business -> Customers. These 4 application components are: Customers are people or companies to whom you sell products or services on credit. Invoices represent the physical invoice you send to a customer, requesting payment. This invoice contains an itemized list of things you sold. Jobs (optional) is where you register Customer Jobs, a grouping mechanism by which you can group invoices to a particular customer. Process Payments is where you register money payments from a customer to your company. In the next 4 sections of this chapter, the above 4 application components will be introduced. Customers are people of companies to whom you sell goods or services. They must be registered within the A/R system. To register a new customer, enter the menu Business -> Customer -> New Customer. Fill in the appropriate billing address for the customer, such as Company Name, Address, Phone, Fax, etc. Below is a list of the other options: Identification - Customer Number - can be any number you would like to use to refer to this customer, or you may leave it blank and a number will be chosen automatically. Identification - Active - this check box is used to differentiate active customers from inactive ones, useful for when you have many past customers, and you want to see only the active. Billing Address - Name - this is the contact name of the person to receive the bill. Notes - you can enter any text you would like to in this area, additional commentaries about this customer. Billing Information - Currency - here you can specify what the default billing currency will be. Billing Information - Terms - here you can specify what the default billing terms will be for this customer. These terms must be preregistered using Business -> Billing Terms. Billing Information - Tax Included - this specifies whether tax has already been included in the invoice. You can choose Yes, No, or Use Global. Yes means that the tax is already included in the invoice, No means tax has not been included in the invoice, and Use Global means to use the global tax (Derek?). Billing Information - Tax Table - this allows you to specify a specific preregistered tax table to apply to invoices to this customer. Tax tables must be registered from the menu item Business -> Tax Table. Shipping Address - if the customers shipping address is different from the billing address, you can enter this information in the third and final windows tab entitled Shipping Address. This is what the New Customer registration window looks like: New Customer Registration Window New Customer Registration Window To search for a preexisting customer, use the Business -> Customers -> Find Customers application. From the results of the search, you can select a customer to edit, or view. Find Customer Window Find Customer Window To return a list of all registered active customers, 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. An invoice is the paperwork you send to a customer requesting payment for a product or services rendered. GnuCash can be used to generate and track invoices. To send an invoice to a customer you must first create a new invoice. This is accomplished using the application available at Business -> Customers -> New Invoice. The New Invoice window should be filled in appropriately: Invoice Info - Invoice ID - the identification number of this invoice (IE: your internal number for this invoice). If you leave it blank, a number will automatically be generated for it. Invoice Info - Date Opened - the date this Invoice was created. Billing Info - Customer - the customer who is to receive this invoice. Billing Info - Job (optional) - the customer job to associate with this invoice. Billing Info - Billing ID - this is the customer's PO Number or other "customer reference number" that you should use to identify your invoices to this customer (and job, if you have one). Billing Info - Terms - the payback terms agreement for this invoice, a list of preregistered terms is available within the pop up menu. Creating a New Invoice Creating a New Invoice Once you fill in all the information for the new invoice, you will be presented with the Edit Invoice window. From the Edit Invoice window you can enter an itemized list of things you sold on this invoice in a manner similar to how the account register works. Edit Invoice Window Edit Invoice Window There are 15 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. Income Account - which income account is credited with this income Quantity - how many of the items you sold Unit Price - the unit price of the item Discount Type - type of discount, monetary value ($) or percentage (%) Discount How - the discount can be computed after the tax is applied (>), before the tax is applied(<), or the discount and tax can be applied to the pretax value (=) Discount (optional) - total discount (in monetary units or percentage, depending on Discount Type. You can leave blank for no discount. 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. For example, if there is 1 item of $100 with a tax of 5%, if Tax Included is empty then subtotal = $100 and tax = $5, whereas if Tax Included is true, then subtotal = $95 and tax = $5 Tax Table (optional) - this is a pop up menu of all the available tax tables. If you set the item as taxable then this tax table is used to compute the amount of tax. Subtotal (uneditable) - computed subtotal for this item (less tax) Tax (uneditable) - computed tax for this item When you have finished entering all the items, Post the invoice. When you have finished editing an invoice and are ready to print you must Post the invoice. You do not have to post the invoice immediately, and in fact you should only post the invoice when you are ready to print it. Posting an invoice will place the invoice transactions into an accounts receivable account. The Post Invoice 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/Receivable accounts). Post Invoice Window Post Invoice Window To find a preexisting invoice, use the Business -> Customers -> Find Invoices application. From the results of the search, you can select an invoice to edit, or view. Before you can edit a preexisting posted invoice, you will need to unpost it. After you have posted an invoice, you should print it to send to your customer. This can be done from the Edit Invoice window using the Print button, or from within the Process Payment dialog, or from the main window: Reports -> Business Reports -> Printable Invoice. You can edit the invoice options to select the invoice you want to print. See the later section in this chapter on the Process Payment dialog for instructions on printing. An example of the default GnuCash invoice print output is shown below. Invoice Print Output Invoice Print Output You can modify the appearance of the invoice, IE: add a company logo, etc. To do so, see the section in this chapter entitled "Changing the Invoice Appearance". There is no easy way to assign an automatic starting invoice number. GnuCash will start with number 1 and increment from there. You can override the invoice number by typing an invoice number into the text box each time you create an invoice, but this is bound to get tiring and will sooner or later lead to duplicate numbers. If, however, it is important that you be able to change the invoice starting number, there is a way, but unfortunately there is no UI interface to do it. You have to hand edit your XML data file (it should be right at the beginning of the file in the "counters" section). You can use the optional GnuCash feature called Customer Jobs to associate invoices which fall under a single customer. This is useful for when you have multiple "jobs" for the same customer, and would like to view all the invoices for one job. To use customer jobs, you must create them using the Business -> Customers -> 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 - Customer - the customer associated with this job. Owner Info - Billing ID - the customer'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 Customer Job New Customer Job To find a preexisting customer job, use the Business -> Customer -> Find Job application. From the results of the search, you can select a job to edit, or view. Eventually, you will receive payment from your customers for outstanding invoices. To register these payments, use the Process Payment application found in Business -> Customers -> Process Payment. The Process Payment application consists of: Payment Info - Customer - the customer who paid you. Payment Info - Date - the date you you received payment, normally the current date. Payment Info - Amount - the amount of money received. Payment Info - Num - the check number. Payment Info - Memo - any comments about this payment. Post To - the A/Receivable account to post this transaction. Transfer Account - the account where the money will be deposited to (a checking account for example) from this payment. Below is the GnuCash Accounts Receivable payment window. Process Payment Process Payment Window One of the design goals in GnuCash's Account Receivable system was to allow different processes to get to the same state, so you can reach an invoice from different directions based on the way you think about the problem: * you can search for the customer first, then list their invoices * you can search for invoices by number * you can search for invoices by company name Or, if you prefer, you could * you can create a new invoice and then select the customer * you can search for a customer, view their invoices, then click "new invoice" The default Invoice style is fairly barren, as you can see in the example given in the "Invoices" section of this chapter. The default invoice style leaves the top part of the form blank, so that you print on company letterhead paper. However, there are some things you can do to change this default appearance. If you go to File, Properties, then you can enter your company name and address, which will then be printed on the right hand side of the invoices. To add a customized background, heading banner or logo to the invoices, modify the invoice style sheets. To do this, go to Edit -> Style Sheets and make a New... style sheet. You will see a window like this: New Style Sheet Window The New Style Sheet initial window. You must select the Fancy style sheet template, and choose a name for your new style sheet. The new style sheet will appear in the list to the left. Select it, and now use the tabbed window to the right to make modifications. There are 4 tabs available, Colors, General, Images, and Tables. The Colors tab allows you to change the colors of the various sections of the invoice. The General tab allows you to set the Preparer and Prepared for information, and to enable links. The Images tab allows you to import graphics into the style sheet, such as your company logo. Finally, the Tables tab allows you to adjust the spacing around the tables which make up the invoice. To create the graphical images, use your favorite graphics application such as The Gimp or OpenOffice Draw, and save the image in either GIF or PNG format. Then import them into the style sheet. Below is presented a (hideous) example. HTML Style Sheets example The HTML Style Sheets window with an example Background Tile, Heading Banner, and Logo. The placement of the images in the invoice is as follows. The Background Tile is tiled to become the background image, the Heading Banner goes to above the invoice text, and the Logo is placed in the upper left corner of the invoice to the left of the Heading Banner. You will probably have to try a few different sized images until you get the invoices to print nicely. Some sizing suggestions are that the Logo should be 1 square cm (~0.5 inch), and the Heading Banner should be 15 cm (~6 inches) wide and 1 cm (~0.5 inch) tall. With the style sheet configured, when you print the invoice, you select the style sheet to use from the Options menu. Below is the resultant invoice after applying the style sheet demonstrated above. HTML Style Sheets example The hideous invoice which results from the graphics selected in the style sheet.