You have completed the contract for Acme Inc. successfully. Congratulations! You are now ready to invoice. We will take you through the steps for creating the invoice, posting it, formatting it and printing it ready for mailing.
- From the menu, select Business | Customer | New Invoice.
- In the Invoice Information pane, leave Invoice ID blank. GnuCash will generate numbers sequentially. Enter a date of over a month ago in the Date Opened field. This will help you to process the payment right away (for the purposes of this tutorial), without having to wait for a month for the invoice to become due.
- In the Billing Information pane, for Customer click Select. The Find Customer dialog will open.
- In the Search Criteria pane change contains to matches regex. Enter a. (dot) in the next text box as shown in the following screenshot.
Note
regex is an abbreviation for a regular expression. This is a geek formula for efficiently matching and finding names and other text. Until you have hundreds of customers, all you need to do is use the dot, get a full list of customers, scroll down, and pick the one you want. When you do have a large number of customers, you can select the contains option, type in a partial name and get a match.
- Click Find. You should now see the full list of customers. Select Acme Inc and click Select.
- Enter Acme PO# 7398 dt 07/01/10 in Billing ID. This is the reference to the Purchase Order that you received from your customer Acme Inc.
- Terms will change to Std automatically. This is based on the selection that you made at the time of creating this customer. You have the option of changing it for each invoice, if that invoice has special terms. However, leave it as Std for this invoice as shown in the following screenshot:
- Click OK to launch the Edit Invoice window.
- The top part of the Edit Invoice window will be populated with all the information that you provided so far. The Invoice ID should now have an auto-generated ID of 000001.
- Under Invoice Entries, tab to the Description field and enter Firewall set-up. Tab to the Income Account field and select Income:Sales from the drop-down list. Enter 1.00 under Quantity, 395.00 under Unit Price, and leave the Discount as 20.00. GnuCash will calculate the Subtotal for you by multiplying the Quantity by Unit Price and applying the Discount % to the total as shown in the following screenshot:
- Once you have completed all that and verified that everything is in order, you can Save the invoice and come back and Post it later. However, we are ready to Post the invoice right away. Go ahead and click the Post toolbar button. A confirmation dialog will pop up asking you, Do you really want to post the invoice? The transaction gets recorded in the accounts only when you post it. Even though you can unpost an invoice, you may have to deal with tax and other complications. Therefore, you should take a moment to review the invoice before posting as shown in the following screenshot:
- Click OK to post the invoice. You will find that the Edit Invoice tab changes to View Invoice.
- Now open your Sales account and confirm that a $316.00 revenue transaction from Acme shows up. Most importantly, open your Accounts Receivable and confirm that an entry of $316.00 shows up under the name of Acme with a due date 30 days from the date of invoice.
- Next we are going to format and print the invoice. Preparatory Exercise: Create a new style sheet and name it MACS Invoice. Please refer to Chapter 3, Fun and Eye-opening part - Reports and charts for a tutorial that shows how to create a custom stylesheet.
- From the menu select Reports | Business | Printable Invoice.
- You will have a blank report because you have not selected an invoice yet. Click the Options toolbar button to open the Report Options window.
- In the General tab in Style sheet, select MACS Invoice. In Invoice Number click Select and find the invoice.
- In the Display Columns tab uncheck Action.
- In the Display tab uncheck Billing Terms and change the Extra Notes to Thank you for your business. Click OK to close the Options window.
- Go ahead and print the invoice shown in the previous screenshot by using the menu File | Print Invoice.
Your ability to find good credit-worthy customers with a growing demand for your goods and services and negotiate favorable trade credit terms is where your business skills can shine. However, the not so glamorous bookkeeping plays an important part too. Unless you have the systems in place to keep track of who owes you payment, what the terms are and when they become due, you won't be able to follow them up and collect it in a timely manner. At best this will impact your cash flow because you didn't follow up in a timely manner on payments due. At worst, some of these will become bad debts and either expensive to collect or they will have to be written off as uncollectible.
GnuCash has four modules that form part of the Accounts Receivable system. The credit sales transactions will be tracked in the Accounts Receivable account. However, you do not directly make entries in this account from the account register, as in the case of other accounts. Instead, as you saw in the preceding tutorial, you will be working with the four GnuCash A/R modules, available from the Business | Customers menu. These four modules are Customers, Invoices, Jobs, and Process Payments. Jobs is an optional module. This feature is useful when you are executing multiple contracts for the same customer, and would like to view all the invoices related to a single contract separately. We will cover the Jobs module in a later chapter.
The Printable Invoice without any stylesheet is very plain because it is designed to be printed on your letterhead. However, you can create a stylesheet of your choice and apply that style, as we saw in this tutorial so that you can print on plain paper as well.
Note
You can print an invoice from the View Invoice window as well. When View Invoice is open, you can select from the File | Print Invoice menu.
Most of the things on the invoice can be changed using the Report Options dialog.
Note
Some people prefer not to show a Due Date. Instead they prefer to show something indirect, like Net30, being the shorthand for 30 days credit that we discussed earlier. However, there is no easy way to make that change in GnuCash.
If you want to make the above change, or create a PDF of the invoice so that you can send it attached to an e-mail, or create a style beyond what GnuCash allows you to do, then you know that you are pushing the limits of what GnuCash can do. Please see the Exporting Reports section in the Reports chapter to see how to take your data out so that you can use it in your favorite word processing or spreadsheet program to edit and format it to your very specific preferences.
Depending on the number of credit transactions you have, you will want to run a report every day or every week to see which payments are due and overdue. To see a Receivable Aging report, select from the Reports | Business | Receivable Aging menu.
You can use the report shown in the preceding screenshot to come up with an action list of which payments to follow up and how.
Your other option is to create a list of unpaid invoices from the Find Invoice dialog. From the menu, select Business | Customer | Find Invoice. In the Search Criteria, in the drop-down list on the left, select Is Paid? In the middle drop-down list, select Is not, and then leave the set true button pushed down as shown in the following screenshot:
With that all set, click Find. You should now see a list of all unpaid invoices as shown in the following screenshot:
You can click on the Due column header to sort the list of invoices by due date. However, this list does not show the due amount nor is there any easy way to print this. You will have to print the screen using either a graphic tool such as GIMP or Paint or a word-processing program.
If you created an invoice and after posting it realized that you made a mistake, then GnuCash provides you a way to undo this. Find the particular invoice and open it in the View Invoice window. You will see a toolbar button Unpost. You can click this button to undo the transactions done that you posted earlier. You will see a confirmation dialog as shown in the following screenshot:
Click on OK and the invoice posting will be unposted.
Note
As we saw earlier, GnuCash generates sequential invoice numbers. If I unpost an invoice, will it not break my chain of invoice numbers? It sure will. Accountants, auditors and the IRS all seem to take an undue interest in such missing invoice numbers. Here is a tip to avoid such unwanted attention. For the next invoice that you need to create, instead of creating a new invoice, edit this unposted invoice and use it. As an added bonus, in this age of green, you can feel good that you have done your bit for the day by recycling an invoice number successfully.
- In the Find Customer dialog, what Search Criteria will you enter to get a list of all the customers?
a. Company Name contains
*.b. Company Name does not contain
*.c. Company Name matches
regex.(dot).d. Company Name does not match
regex.(dot).