> On Jun 20, 2023, at 00:11, flywire <flywi...@gmail.com> wrote:
>
>
> There is an incredible amount of keystrokes, clicks, and human memory
> recall to pay a bill:
>
> Business, Vendor, New Bill, Date Opened:20/06/2023, Vendor: Random, OK
> Expense account: Expenses:Auto:Fuel, Quantity: 1, Taxable, Tax included:
> Select, Tax Table: GST on Purchases [default]
> Enter
> Post bill (so it can be paid), OK
> Pay, Select Transfer Account: Checking Account, OK
>
> Sample Transaction
> Date Description
> Account Debit Credit
> 20/06/23 Random
> Expenses:Auto:Fuel $3,000.00
> Liabilities:GST:GST on Purchases $300.00
That's a mistake, you got it right below
> Assets:Current Assets:Checking Account $3,300.00
>
> General Journal
> Date Description
> Account Debit Credit
> 20/06/23 Random
> Liabilities:Accounts Payable $3,300.00
> Assets:Current Assets:Checking Account $3,300.00
> 20/06/23 Random
> Assets:GST:GST on Purchases $300.00
> Expenses:Auto:Fuel $3,000.00
> Liabilities:Accounts Payable $3,300.00
Does Australia let you deduct GST on overhead expense from that paid on product
sold, or only VAT incurred in COGS? If it's only the latter I'd think auto fuel
would be a poor example. The problem with your proposal if you change that to
some actual input--a process chemical, say--is that you don't expense those
when you purchase them: It's an asset transfer, DR Assets:Inputs:Process
Chemicals:SF6 (just picking a random process chemical from one of my former
lives in semiconductor manufacturing), DR Assets:GST:GST on inputs, CR
Liabilities:Accounts Payable.
Expending the process chemical is another asset transfer, DR WIP, CR inputs
*and* DR GST on WIP, CR GST on Inputs.
When the product is finished its transferred from WIP to Finished inventory and
the accumulated GST would be transferred too: DR Finished Inventory, CR WIP and
DR GST on finished inventory, CR GST on WIP.
You book the expenses when you sell product: DR:Assets:Accounts Receivable, CR
Income:Sales, DR Expenses:COGS, CR Assets:Finished Inventory; DR Expenses:GST
on sales, CR:GST on finished inventory, CR Liabilities:GST.
To make that work the way you say that Quickbooks does it you'd need the
Expenses:COGS to be broken out by product and each product's BOM and break out
the right proportion of each sale into each BOM account. That seems to me to be
more complicated than separating the value and GST at purchase time.
GnuCash has tax tables on bills just like on invoices, so once you've set up
your input GST schedules you only need to apply the right one to each line
item. You'll have two sets, one for inputs that goes to an asset account and
one for overhead that goes to an expense account. If your GST/VAT regime has a
lot of different rates then take some care naming your tax tables so it's easy
to remember which one to apply to each line item.
But either way it's a lot of manual work. That's why I keep repeating that
GnuCash is suitable only for very small retail operations and completely
unsuitable for any sort of manufacturing. There's better software out there for
those kinds of businesses. Don't waste time trying to convince us to turn
GnuCash into a competitor for Odoo (it isn't going to happen, we don't have the
resources), just use Odoo if that's what you need. Geert does, so what better
endorsement do you need?
Regards,
John Ralls
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