Re: How to handle periodic cash reciepts vs. non-periodic accounts payable?

[David Tangye <..hidden..>]

On Mon, 2006-09-25 at 19:58 -0700, Chris Travers wrote:
> > Does he need a separate account just for the overpayment component? (I
> > hope not.)
> It is a good idea.  Not necessarily strictly required for a small
> business like that, but it contributes to clarity, which is a good
> thing as far as I can see :-)
Thinking about it, you are right.

> I handle things this way:
> Prepayments are tracked in a liability account.
> Overpayments are tracked in the AR account.
I would call the account 'Pre-payments from Customers' so its not
confused with when we prepay out ('Prepayments to Suppliers'). Both are
equally 'overpayments'. Again its so easy to confuse with unclear
terminology.

> > > Check the AR checkbox, so that it appears in the AR dropdown menu.
More thoughts. I am pretty sure I remember that the system is meant to
work correctly if both debtor and creditor accounts have both AP and AR
checkboxes checked. This allows either to go negative for a debtor or
creditor, but might be confusing to some book-keepers. That's why I
think you can restrict yourself on a per-business basis to not using
everything. Eg if the original business - subject of this thread - only
take overpayments in and does not prepay any suppliers, then only the
liability account is needed. The overpayment is split into two payments:
that which accounts for the amount outstanding on the last rent; and
cant the remainder be paid against a new rent transaction raised for the
next future date due? Hmm, yes, isn't that's the simple way to do it:
Raise a new AR, dated today, part paid today, due later?