Billable time income account posting

Is there any way to associate another account when invoicing billable time on the income side?

This is my problem: I’m invoicing billable time to domestic and foreign customers, and reporting standards require that I keep these income streams on separate income accounts.

Right now they are under Billable time - invoiced so I have to manually keep track of the income.

I was thinking that it might be a good idea to have the option to associate different income accounts to billable time when entering it.

Or at least have the option to post to Billable time - invoiced account using a journal entry to move the income to different accounts so that the PL statement shows foreign/domestic income.

It is very easy to do what you want. After you have created a sales invoice from the Customers tab, checking the boxes for billable time to be included, you can immediately edit the sales invoice. Change the account that appears by default (Billable time - invoiced) to another account you create for the purpose. The billable time entry status still shows as Invoiced, but the amount of the entry appears in the other account.

You might rename the default account something like Billable time - domestic and name the newly created account Billable time - foreign.

This keeps things simple. You do not need to think about choosing an account when entering time. You only need to consider that when creating a sales invoice. That would be especially useful if multiple people are entering time for themselves. They cannot get anything wrong.

Yes, this is sort of a solution, but not very convenient when I have an invoice with 30+ lines of billable time :slight_smile:

Personally, @novica, I don’t see the problem. Since you want to track two income streams, you need to make the selection at some point for every billable time entry. Your suggestion is to make it when recording the time. This would require action on every billable time entry, regardless of whether it was foreign or domestic. The current program design requires selection (a) when invoicing and (b) only when the selection is different from whatever default you set. So there is less work with the current design.

I don’t know whether more than one person at your business records time. But, for those business where that happens, people recording time do not need to worry about selecting the proper income account to allocate it to. In other words, they do not need any knowledge of the accounting structure.

Suppose 75% of your work is domestic. Use the built-in Billable time - invoiced account for the domestic work and set Form Defaults accordingly. 75% of the time, no action will be required at all. Only for the 25% of work that is foreign would you need to make an account selection. Of course, it the relationship is reversed, reverse the account usage. Either way, the current design allows you to set things up for less work than your suggested approach.

I agree it is doable I’m just saying it is not very efficient.

Right now I have actually 4 streams. 2 domestic (one is billable time one is not) and 2 foreign (one is billable time one is not).

This leaves me with a lot of invoice editing after the invoices have been issued to move everything to the right income accounts (which also leaves a lot of room for error).

I agree that people entering billable time should not care about the accounting, and I don’t know, maybe a better solution would be to have some option to set “billable time income account per client” when entering a client.

Despite having 4 income accounts (streams), you still only have one for which billable time posting needs to be selected. The other billable time account, whichever is used most often, can be set as the default. The non-billable time entries require an account selection anyway when they are added to the invoice created in the Customers tab. Of course, those could be set up as non-inventory items with pre-selected account postings so you would not need to allocate them, either.

That would only be helpful if you always posted the same client’s billable time to the same account. What if you did both foreign and domestic work for the same client and the law required separation according to place of performance, not place of billing (as is often the case)? Then you would need to verify and edit the posting account for every entry just as you do now.

I definitely understand why you are looking for a simpler way than manually keeping track of different income streams. Manager offers that. But, once you introduce multiple income accounts, I do not see any method that avoids the need to make selections of them. The current design at least minimizes that need by letting the most frequent account be the default.

So, @Tut if I understand this correctly you are suggesting that post non-billable time revenue on the billable time account after I rename it to the appropriate (and more frequent stream) name say ‘domestic revenue’ ?

Yes, I can see this making things complicated for different cases or different jurisdictions, and maybe adding such a feature would require a lot of development work, but the current design, at least as it looks to me, forces me to use the billable time feature for something that it was not designed for, and may have unforeseen consequences down the road.

Thanks for the insights, as always.

No, not at all. I am referring to the fact that you cannot add billable time to an existing sales invoice. Therefore, you must first create the sales invoice from uninvoiced billable time in the Customers tab, then add other items to the invoice. So, items that are not billable time (such as fixed price services) must be added as individual line items, complete with their own account selection. In your case, for example, billable time for foreign work would go onto the invoice from the Customers tab. Then you would add the fixed price foreign work as separate line items, choosing the appropriate one of your 4 income accounts (obviously not the billable time ones).

I don’t understand this concern. Can you explain further? What do you think you are being forced to use billable time for that was not intended? The module essentially does four things: (1) temporarily records billable time as an asset in Billable time, (2) temporarily records income earned in Billable time - movement, (3) transfers billable time from the temporary asset account to Accounts receivable through the invoicing process, and (4) transfers income from the temporary accrual account to Billable time - invoiced as part of invoicing.

Once those transfers take place, Manager does not care what else you do with the billable time. So you can tell it (by editing the sales invoice) to post the credit side of the transaction to a different income account if you want. On the debit side of the transaction, the asset has still been removed from the Billable time account and lodged in the Accounts receivable account. Nothing has been done the program was not designed to handle. You simply changed where the credit is posted. This is exactly what would be accomplished by setting a billable time account for a customer or recording one in the billable time entry. But as currently designed, you don’t have to do it for default postings, only for the less frequent ones.

Wait, wait, are we talking about the same thing?

While I have 4 streams (domestic and foreign billable time, and domestic and foreign fixed price) I only need (or rather, it is required) to report them on two accounts (or possibly two account groups (domestic income and foreign income).

So for example if I make an invoice with two items as below:
Screenshot_20181224_195156
and assuming I rename the “Billable - time invoiced” account to something like “Foreign income” – at least this is what I thought you were suggesting in previous posts – then I can have an account that represents my foreign income on the PL statement. Then, I can create another account for domestic income and after I generate another invoice from billable time I just change the account so that this money goes to “Domestic income”, like so:

Did I got this right so far?

However, it seems to me that this set up (again, if I misunderstood your suggestions I apologize) result in a misrepresentation on the billable time asset account as it shows that I have written-off the billable time that I moved away from the Billable time account, and written-on non-billable time on it:

Now, I’m not sure if this is a big issue or not. The account is balanced to 0 but, this is what I meant when I said ‘using the feature for something that it wasn’t designed for’. Maybe someone doing an audit will say why so many billable time write-offs etc. I don’t know, it just doesn’t seem right.

I have apparently not communicated well enough. I am definitely not suggesting that you post non-billable time items to any billable time account. I would suggest something like the following income accounts:

  • Billable time - domestic (renamed from the default Billable time - invoiced)
  • Other services - domestic (every other domestic service goes here)
  • Billable time - foreign (a newly created, ordinary account where you reallocate foreign billable time entries after a sales invoice is created)
  • Other services - foreign (every other foreign service goes here)

The two domestic accounts can be grouped together under a Domestic income heading and the two foreign accounts under a Foreign income heading if you want. But that is entirely optional and would not change the workflow, only the display.

As I’ve mentioned several times, you can switch renaming of the built-in Billable time - invoiced account to foreign if that is where most of your work is performed.

So the difference between my suggestion and your last, very thorough illustration is that editing changes billable time entries on the invoices to the newly created billable time account when necessary. Editing never changes non-billable entries to a billable time account. (I confess I don’t actually know what problems, if any, that might cause. Probably none, but it would make the accounting obscure.)

I hope that clears things up.

3 posts were split to a new topic: Splitting receipts