2010-08-06 GnuCash IRC logs
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09:56:01 <Antisoche> Good morning all. How does one handle transaction fees in gnucash? Someone sent me money via paypal, and they (paypal) deducted some %. How do I account for this?
10:02:24 <Antisoche> I guess that's not really my question.
10:03:05 <Antisoche> What I want to do is send an invoice, and add the paypal fee to the invoice.
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10:03:56 <Antisoche> They are willing to pay a premium to use paypal, but how do I reconsile for missing amount?
10:04:42 <Antisoche> Does the money just vanish into paypal's coffers, or should it be accounted for?
10:05:44 <blathijs> Antisoche: I think it depends if you include amount in the invoice or not
10:05:55 <blathijs> Say you charge EUR 10 for a service
10:06:38 <blathijs> If you don't include the amount, you'd receive EUR 8 (EUR 2 being the paypal fee)
10:07:09 <blathijs> THen you'd create a transaction: EUR 10 -> Income, EUR 2 -> Paypal costs, EUR 8 -> Bank account
10:07:34 <blathijs> If you do include the amount, you'd receive EUR 12 (EUR 2 being the paypal fee again, for simplicity)
10:07:50 <Antisoche> I'd like to have the amount on the invoice because it's easier for me to calculate their take. I think I put it in the 'Notes' section, but then our books don't align. He claims he gave me $10 but I say he gave me $8.
10:09:09 <Antisoche> I have two basic concerns from this. Firstly, what happens when the IRS busts down my door demanding I justify this $2 discrepancy? Secondly, I'd kinda like to know how badly we're all getting screwed by Paypal.
10:09:46 <blathijs> Then you'd create a invoice: EUR 10 -> Income, EUR 2 -> Money for paypal (an asset), EUR 12 -> Accounts receivable (this is done by posting the invoice)
10:10:57 <blathijs> Then, you'd create a payment to the invoice, which looks like: EUR 2 -> Money for paypal, EUR 12 -> Accounts receivable, EUR 10 -> Bank account
10:11:36 <blathijs> That's how I'd do it (though the latter one is a bit trickier, because you'd have to edit the transaction created by the process payment command)
10:11:50 <Antisoche> I was thinking something like that ... but why do you say Paypal's money is my asset? Wouldn't it be an expense?
10:13:28 <blathijs> No, since the customer pays it
10:13:33 <blathijs> it's his expense
10:14:15 <blathijs> From your point of view, the customer gives you some money, which you use to pay Paypal, so it's a temporary asset
10:14:34 <blathijs> or perhaps even a liability, since it's money that you still need to give away
10:15:19 <Antisoche> So I invoice $10, and say $12 if using Paypal in the notes. I get check #99 for $12, which I apply $10 to the amount (income), and $2 to Paypal.
10:15:29 <blathijs> Alternatively, you could put the money on an "Paypal costs" income account and have a corresponding "Paypal costs" expens account
10:16:17 <blathijs> Uh, I'm not completely sure I understood that
10:16:38 <Antisoche> sorry
10:16:41 <blathijs> You create an invoice for $12, of which only $10 is booked as income for you. The other $2 is booked on the balance account
10:17:06 <blathijs> So, this does not do anything with invoice notes, the paypal costs are completely specified
10:17:30 <Antisoche> My problem with an invoice for $12 is that I may only get a check for $10 if he pays in cash for instance.
10:17:54 <blathijs> Ah, right.
10:18:22 <Antisoche> It seems to me that what I want is to allow for overpayment, but account for the extra in a way that it doesn't show up as income for me (that I have to pay tax on)
10:19:06 <Antisoche> That's why I don't think I want it to be an 'Asset' - from my perspective it's just gone.
10:19:18 <Antisoche> But where do I put it so that the books balance?
10:19:23 * Antisoche is not an accountant. :(
10:19:29 <blathijs> Perhaps nowhere? :-)
10:19:31 <blathijs> Me neither
10:20:13 <blathijs> Antisoche: How do you pay paypal? On each transaction (e.g., do you really get only $10 when the customer pays $12, or do you get $12 and pay in bulk at the end?)
10:20:21 <Antisoche> The invoice has a 'tax' column, and tranasctions have a 'fee'... oh, wait...
10:21:09 <Antisoche> blathijs: Well, I invoiced $10 and he paid $10 and I received $9.67 or something.
10:21:43 <Antisoche> Paypal takes a flat fee plus a percentage based on the amount transferred automatically.
10:22:06 <Antisoche> It's really the same thing that credit card companies do, so this should be a well-understood problem by someone.
10:22:11 <blathijs> I guess the main questions here really is, who is paying paypal, you or him...
10:22:38 <Antisoche> They money is gone prior to my receiving it. Paypal effectively steals it.
10:23:02 <Antisoche> while it is in transit
10:23:10 <blathijs> Does paypal send you a transaction overview at the end of the month, stating how much you've paid them for transactions (including a VAT specification, perhaps?)
10:23:45 <Antisoche> I have no idea what they do ... let me see.
10:24:20 <blathijs> If so, you could book that as an invoice and until then, book all of those bits of money on an "Money stolen by paypal" asset account
10:24:29 <blathijs> (though you might want to come up with a better name :-p)
10:25:09 <Antisoche> Ha.
10:25:38 <Antisoche> When I found out that paypal took a cut he sent me another $10. I received $9.41.
10:26:30 <blathijs> so the cut is variable, depending on the position of the moon, or something? :-)
10:26:32 <Antisoche> I don't see any sort of summary, but in the transaction details for each transaction I see the fee ($0.59 in that case)
10:27:25 <blathijs> complicated stuff, this
10:28:02 <Antisoche> It;s $0.30 per transaction, plus 2.9% if <3k, or 2.5% if 3k < 10k, or ...
10:29:24 <Antisoche> I may be overthinking it. I have a tendency to do that. Gets me all confused.
10:30:11 <Antisoche> In my specific case the customer is willing to pay the fee, but everyone who takes credit cards has to account for the robber barons along the money trails.
10:31:59 <Antisoche> How do you suppose it works when you bill out $10 and only get $9.41 and want to say "good enough"?
10:32:35 <blathijs> Antisoche: You could just put the remaining money up as "Payment difference", or as "Paypal cost"
10:33:26 <blathijs> Antisoche: e.g., create a transaction that does $10 -> Income (or A/P), $.59 -> difference (or paypal), an expense account, $9.41 -> Bank account
10:33:50 <Antisoche> yes, which I'm fine with. I just don't want to end up paing taxes on it bceause it's an asset or income
10:34:39 <blathijs> Is this personal, or business?
10:34:50 <blathijs> (e.g., are you worrying about income tax or VAT?)
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10:35:11 <Antisoche> Business. I don't think the U.S. has a VAT.
10:35:38 <Antisoche> It's sad that my first payment is this complicated. :(
10:35:38 <blathijs> Hmm, warlord mentioned something like that
10:35:52 <blathijs> Every start is complicated, I'm afraid :-)
10:36:28 <Antisoche> Well, true. This is actually payment #3. The first two were checks - simple.
10:36:36 <blathijs> Antisoche: How does income tax work? Isn't that charged over the net result at the end of the year? Or is it charged on any income you get (even when you spend the income for business again)
10:37:39 <Antisoche> blathijs: It's based on the net income. Which is why I was thinking paypal robbery was an expense.
10:37:59 <blathijs> Antisoche: In that case, it doesn't really matter, right?
10:38:02 <Antisoche> But there are issues with assets (like depreciation) that I don't understand well enough...
10:39:04 <blathijs> If you have charged your customer for the paypal fee (e.g., have $12 on the invoice and your income account), then you should book the paypal money as an expense (so the net profit works out)
10:39:41 <Antisoche> blathijs: Generally, I agree. My concern is with the discrepency between what he claims he paid and what I got to tax authorities. It's a silly fear, I hope.
10:39:58 <blathijs> if you let the customer pay the paypal fee themselves (e.g., $10 in the invoice and income account), then I think you can just ignore the paypal fee...
10:40:59 <blathijs> Antisoche: Perhaps you should contact the tax authorities, to see if there is any rule for this situation
10:41:21 <blathijs> or wait for someone from .us to show up (perhaps warlord, he's a gnucash dev and US business user AFAIK)
10:43:18 <Antisoche> blathijs: Ok - so I think that takes me back to my earlier thoughts -- in GnuCash, create an invoice for $10. In the notes, say 'If using paypal, divide total by .971 and add 0.3', and then paypal gives me $10 and all is square. The extra fees are just gone.
10:43:40 <Antisoche> ... unaccounted for.
10:44:03 <Antisoche> ... not my problem.
10:44:14 <blathijs> I guess
10:45:33 <Antisoche> hmm
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12:03:01 <Antisoche> Ok ... It looks like if I knew a paypal fee was involved, I _could_ invoice with the fee added, setup a paypal liability, and then pay the liability out of the income.
12:03:40 <Antisoche> ... based on the description of "UK Vat" here: http://code.neil.williamsleesmill.me.uk/gnucash-guide.html
12:05:00 <Antisoche> blathijs: I'm not sure if that resolves my 'income' concern, but it at least makes sense.
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15:19:09 <blathijs> Antisoche: It would at least properly show the flow of money
15:20:00 <Antisoche> blathijs: Thanks for piping up! Any idea where the 'description' is recorded on a payment? I can't find it...
15:20:26 <Antisoche> I went with putting the fee in the notes section, fwiw.
15:20:43 <Antisoche> If I were willing to accept less, I think I'd go the liability route.
15:26:52 <Antisoche> Ah - I have to expose the splits. Thanks ! :)
15:28:11 <blathijs> :-)
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16:28:41 <warlord> @op jsled
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16:38:01 <blathijs> warlord: I figured out the guile 1.8 problems
16:38:18 <blathijs> warlord: For some reason --no-create ended up in my configure line, so the reconfigure didn't work
16:38:31 <warlord> That would do it!
16:39:05 <blathijs> warlord: when I fixed that, I found that my gnucash symlink linked to gnucash-bin, but in the most recent version the binary was just called gnucash again
16:39:18 <blathijs> warlord: so I was still running the old binary
16:39:29 <blathijs> after I fixed those two things, it started working :-)
16:41:22 <blathijs> warlord: Is there anyone in particular "in charge of" the sales tax code?
16:42:59 <warlord> Not really
16:43:09 <blathijs> warlord: I'm trying to figure out how to properly keep track of reversed VAT, but I don't think the current code can handle that
16:44:30 <blathijs> I have some ideas on adding a new tax table entry type (in addition to a percentage and a fixed amount), but I'm not quite sure what to put where
16:46:37 <warlord> What is "reversed VAT"?
16:47:04 <blathijs> That's when you sell something across the border in the EU
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16:48:24 <blathijs> instead of charging VAT, which the buying company in another country can then get back from the tax authority in my country, we just leave out the VAT of the transaction entirely
16:50:06 <blathijs> But then I have to specify the total amount of transactions on which VAT is reversed to my tax authority
16:50:17 <blathijs> (split out per overseas company)
16:51:06 <blathijs> and the buying company does the same with their local tax authority, so both authorities can check that the data matches
16:51:31 <warlord> Hmmmmm
16:55:01 <blathijs> I hope this is clear, I'm not in the most explainatory mood today :-)
16:56:22 <blathijs> I've already created a 0% tax table, "reversed VAT", so I can track these amounts without actually charging the VAT
16:57:13 <blathijs> and a sales tax report that shows not only tax amounts per tax table, but also taxable amounts
16:57:23 <blathijs> so I can get the proper data
16:59:35 <blathijs> the one remaining problem is that my invoices now say 0% tax, which is incorrect. 0% means no tax is due, which is appropriate on some very specific goods and services
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17:01:04 <blathijs> So I was hoping to add a "Special" tax table entry type, or whatever name seems most appropriate
17:02:59 <warlord> Yeah, I understand... Just too tired to wrap my head around what needs to be done to implement such a beast.
17:03:35 <blathijs> :-)
17:04:48 <blathijs> I'm hoping to think of something smart that is not too specific for this usecase and general enough to be able to express my usecase
17:04:56 <blathijs> but I got to be off to bed as well
17:07:29 <blathijs> warlord: If you have any useful ideas, let me know :-)
17:07:47 <warlord> will do.
17:07:51 <warlord> i'm off to bed myself shortly.
17:08:23 <blathijs> good night :-)
17:09:03 <warlord> and to you
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19:43:48 <fuzzybunny69y> Hey everyone! I am in the process of transfering my stuff from Quicken to GNUCash and when I imported a QIF for some reason it created a whole bunch of duplicate accounts(Like there is an Expenses:Alcohol account and now there is an Expenses:Alcohol 2 account). I thought I had matched up all the accounts correctly. Is it possible that this was done because the stuff I am importing from Quicken is in CAD and the rest of the st
19:43:48 <fuzzybunny69y> uff in the accounts is in NZD?
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