Paying Bill from Liability Account

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Paying Bill from Liability Account

by gsoltys » Fri Apr 24, 2009 5:56 pm

Hi, I'm trying to pay a bill from a liability account. Here is the scenario - we have a phone bill, but instead of paying it from the company account, it is paid by a non-company check or credit card. Thus, the bill is paid, but there should be an offsetting entry into the current liability account (like John Smith Payable is not owed the 50.00 for the bill). The only options when "writing a check" against a bill appears to be a checking account (ie: that will actually create an offsetting entry).

Any help would be appreciated!

Cheers,
Greg
gsoltys  

Re: Paying Bill from Liability Account

by isabelleslighting » Sat Apr 25, 2009 9:37 am

Hi Greg,

Before getting into the details of how to make this work in Nolarpo, let's talk about this as it relates to accounting.

If I am understanding you right, your "company" has a bill, the bill was paid by "some one else outside the company". There are two scenarios:

1. The company does not have to reimburse "some one else outside the company".
This would be like a write-off. Since the "company" does not owe it, you could reduce the bill to zero or give a discount for the amount of the bill.

2. The company does have to reimburse "some one else outside the company".
The easiest way I have done this in by own business is to treat the bill as still open. Then I pay the bill to "some one else outside the company" and note this on the payment entry I make for the bill.

Let me know if my reply solves your issue or not. Glad to help!
--
Tom Isabelle
Lighting Specialist
http://www.isabelleslighting.com
Bright Ideas, Brilliant Results™

isabelleslighting
 

Re: Paying Bill from Liability Account

by gsoltys » Sun Apr 26, 2009 10:52 am

Hi Tom, thanks for your. Let me explain a bit further, and just as an fyi - I'm somewhat of a layperson when it comes to this. I am from the technical side of the fence so am in charge of implementing Nora with some backend integration to some other systems - but in the process am also responsible for getting the "books" up and running in Nora. Just thought I would mention this, as it may explain if I use the incorrect verbage :-)

We used to use Quickbooks. The scenario is we have a couple of start up companies, with a number of different "to-be" partners. While everything is still being sorted out (bank accounts being opened, etc, etc) the to-be partners are paying the bills from their own pockets. But, we are trying to keep track of all of this in Nora thus once there is capital, they can be reimbursed. In Quickbooks, we were able pay bills using a current liability account "Joe Smith Payable" by choosing credit card as the payment medium, and then all the to-be partners were options (each had a current liability account setup for them in the Chart of Accounts).

In Nora, it appears that I can pay to a credit card, but, only to 1 credit card assigned to that "Payables GL Account" configuration. Also, not sure as per the Nola disclaimer that if I pay by a credit card in the write checks options that it is for "reference only", ie: would a debit/credit be even assigned to the credit card GL account? Regardless, we need to be able to select from a number of "payable-to" accounts, ie: one for each of the future partners, which I don't think Nola can do on the credit card side.

So, not a typical scenario I'm sure, as well, I'm sure there are many ways to do this, especially if I had more knowledge and could make direct journal entries, etc... but we kind of want to use the Bill Payment features.

Was thinking that maybe an option would also to just make a fake checking account for each of the to-be partners. I could pay the bills from those accounts, and it would keep track of the amounts, the checking accounts would just be credited each time and thus be in the negative? When it comes time to reimburse everything, a corresponding journal entry could be made....

Again, thanks for the help everyone....
gsoltys  


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