[moneydance] handling receivables

[Edward Reid]

I appreciate the suggestions. I don't question that a proper accounting 
package is the correct answer, but it just isn't going to happen here. Not 
worth the effort. I'm not concerned about auditability. (And yes, a CPA 
helped me set up my books, though that was on paper 20+ years ago. He still 
does my taxes, knows I keep my books in a personal finance program, and 
wouldn't hesitate to tell me if I were leaving myself open for such 
problems.) I would never get enough benefit to pay back the cost of 
learning to use it. (The out of pocket cash cost is a minor issue.)

What I have come up with -- and I probably could have done it in Q too if 
I'd thought of it -- is this. Make a root-level account "Accounts 
Receivable". Within it, make a second level account for each client. (This 
isn't necessary, and in fact at the rate I'm going I may never have but one 
account at this level.) Within each client account, make an asset account 
for each invoice.

Huh, you say? An account for every invoice? Yep.

I enter the invoiced amounts as increases -- usually two entries, one for 
services and one for expenses. Then I set the account to hide when zero. 
When I receive payment -- partial or full -- I enter it as a transfer from 
that invoice account (within Accounts Receivable) to my checking account. 
Many invoice accounts will never have but three transactions, and as many 
as half a dozen will be unusual.

Advantages: invoice date and payment date(s) are tracked independently. The 
balance on each invoice is tracked. All open invoices (and only open 
invoices) show in the assets list on the home page (and because the root 
account's name starts with "A", they are at the start of that list, which 
can then flow off the page with little loss). That list shows both the 
total outstanding, the amount outstanding from each client, and the amount 
outstanding on each invoice. One click from the home page shows invoice 
details.

Disadvantages: I'm not sure yet how difficult it will be to report the 
information I need for taxes, but in large part that's because I haven't 
explored MD reporting at all yet. I'm recording the income category on the 
invoice amounts (since the payment is a transfer from AR to checking), but 
I do my taxes on a cash rather than accrual basis, so it's the payment date 
that's important to me. I will eventually have a LOT of accounts in this 
hierarchy -- though AFAIK MD won't have any trouble with this, and once the 
invoices are closed, they don't show on the home page. And, I agree, it IS 
a kludge within a program not intended for this purpose, not a proper 
accounting solution. It certainly is way too much work for a business which 
creates even one or two invoices per day -- but so far it seems very 
reasonable for creating one or two invoices per month.

I'm interested in hearing whether anyone sees major problems with this 
approach. (But not in being told it isn't proper accounting. I accept that.)

Edward
Art works by Melynda Reid: http://paleo.org