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<chapter id="chapter_bus_features">
  <title>Business Features</title>

  <sect1 id="bus-intro">
    <title>Introduction to Business Features</title>

    <para>The accounting needs of a business are quite different from that of a person. Businesses have
      customers that owe money, vendors which are owed money, employee payroll, more complex tax
      laws, etc. &app; offers business oriented features to facilitate these needs.
    </para>

    <para><emphasis>Accounts Receivable</emphasis> (A/R) are used by businesses to record sales for which they
      are not immediately paid. This is represented on the balance sheet as an asset, because the
      expectation is that you will receive payment soon.
    </para>

    <para><emphasis>Accounts Payable</emphasis> (A/P) record bills that businesses have received, but may not
      pay until later. This is represented on the balance sheet as a liability because you will have
      to pay for them.
    </para>

    <para>A/R and A/P accounts are used primarily when you have a lot of bills and receipts flowing in and
      out, and do not want to lose track of them just because you do not pay or get paid right away.
      For most home users, A/R and A/P are too complicated to be worthwhile.
    </para>
  </sect1>

  <sect1 id="bus_setup">
    <title>Business Setup</title>

    <para>To set up &app; to handle accounts receivable or accounts payable for a company, these preliminary
      steps must be done.
      <itemizedlist>
        <listitem>
          <para>Build an appropriate Account Hierarchy.
          </para>
        </listitem>

        <listitem>
          <para>Set up Sales Tax Tables.
          </para>
        </listitem>

        <listitem>
          <para>Enter the company information in &app;.
          </para>
        </listitem>

        <listitem>
          <para>Set Business Preferences.
          </para>
        </listitem>

        <listitem>
          <para>Set up Billing Terms.
          </para>
        </listitem>
      </itemizedlist>
    </para>

    <sect2 id="bus-setupacct">
      <title>Account Setup</title>

      <para>There are many different ways to set up a business account hierarchy. You can start with the
        Business Accounts setup which is available from the New Account Hierarchy assistant, or you
        could build one manually. To access the prebuilt Business Accounts, start &app; and click on
        <menuchoice>
          <guimenu>File</guimenu><guimenuitem>New File</guimenuitem>
        </menuchoice>
        and proceed until you see the list of available accounts, select Business Accounts.
      </para>

      <para>The prebuilt Business Account hierarchy will not meet your needs exactly. You will need make
        adjustments to the hierarchy so that it will meet your particular needs. It should be close
        enough, however, that it is recommended you begin with it.
      </para>

      <para>To use &app;&rsquo;s integrated accounts receivable system, you must first set up a special account
        (usually a sub-account under Assets) to hold transactions for receivables. This account must
        be defined with account type <emphasis>A/Receivable</emphasis>. &app; will use this account
        to place transactions related to the integrated accounts receivable system.
      </para>

      <para>To use &app;&rsquo;s integrated accounts payable system, you must first set up an account (usually a
        sub-account under Liabilities) to hold transactions for payables. This account must be
        defined with account type <emphasis>A/Payable</emphasis>. &app; will use this account to
        place transactions related to the integrated accounts payable system.
      </para>
<screen>Basic A/R and A/P Account Hierarchy:

-Assets
   -Accounts Receivable
   -Checking
-Expenses
  ...(as required)
-Income
   -Sales
-Liabilities
  -Accounts Payable
  -Tax
      -Tax on Purchases
      -Tax on Sales</screen>
      <para>You need to add additional accounts to this hierarchy for it to be useful.
      </para>

      <note>
        <para>You do not need to create an individual A/R account for each customer. &app; keeps track of
          customers internally and provides per-customer reports based on the internal tracking. The
          same applies to A/P and vendors.
        </para>
      </note>

      <note>
        <para>If you deal with customers in more than one currency you will need a separate <guilabel>Accounts
          Receivable</guilabel> account <emphasis>for each currency</emphasis>.
        </para>

        <para>If you deal with vendors in more than one currency you will need a separate <guilabel>Accounts
          Payable</guilabel> account <emphasis>for each currency</emphasis>.
        </para>
      </note>

      <note>
        <para>Transactions involving an Accounts Receivable or Accounts Payable account should not be added,
          changed or deleted in any way other than by using Post/Unpost Bill/Invoice/Voucher or
          Process Payment!
        </para>
      </note>
    </sect2>

    <sect2 id="bus-setuptaxtables">
      <title>Setting up Sales Tax Tables</title>

      <para>Sales Tax Tables can used to determine the tax for customer invoices (or vendor bills).
      </para>

      <para>A tax table entry can be assigned to an invoice line or bill line.
      </para>

      <para>Set up distinct tax tables for customers and vendors.
      </para>

      <para>The default invoice tax table entry can be assigned to each customer and the default bill tax table
        entry can be assigned to each vendor.
      </para>

      <para>The default tax table entry for new customers or new vendors can be specified in the <emphasis>Book
        Options</emphasis> window which can be accessed by
        <menuchoice>
          <guimenu>File</guimenu> <guisubmenu>Properties</guisubmenu> <guimenuitem>Business
          tab.</guimenuitem>
        </menuchoice>
      </para>

      <para>Sales Tax Tables are maintained using the <emphasis>Sales Tax Table</emphasis> editor which is
        accessed via menu
        <menuchoice>
          <guimenu>Business</guimenu><guimenuitem>Sales Tax Table</guimenuitem>
        </menuchoice>
        .
      </para>

      <figure>
        <title>Sales Tax Tables Editor</title><screenshot id="bus-taxmain">
          <mediaobject>
            <imageobject role="html">
              <imagedata fileref="figures/bus_tax_main.png" format="PNG"
                         srccredit="Chris Good" width="510px" />
            </imageobject>

            <imageobject role="fo">
              <imagedata fileref="figures/bus_tax_main.png" format="PNG"
                        srccredit="Chris Good" />
            </imageobject>

            <textobject>
              <phrase>Sales Tax Tables Editor</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <figure>
        <title>New Sales Tax Table Entry</title><screenshot id="bus-taxnew">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_tax_new.png" format="PNG"
                         srccredit="Chris Good" />
            </imageobject>

            <textobject>
              <phrase>New Sales Tax Table Entry</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <itemizedlist>
        <listitem>
          <para><guilabel>Name</guilabel> This is the tax table name.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Type</guilabel> Either <guilabel>Percent %</guilabel> or <guilabel>Value $</guilabel>.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Value</guilabel> This is the percentage or value depending on <guilabel>Type</guilabel>.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Account</guilabel> This is the account to which tax will be posted. For tax collected from
            customers, this should probably be a Liability account as it must be payed to the
            government. For tax paid to vendors, if tax laws allow tax paid to vendors to offset tax
            collected from customers, this should probably also be a Liability account (even though
            it will usually have a debit balance) so that the net tax owed to the government can be
            easily observed.
          </para>

          <para>If you set up Tax on Purchases and Tax on Sales as subaccounts of Liabilities:Tax then the net tax
            will be rolled up and can be seen in the &app; Accounts tab.
          </para>

          <para><emphasis>If unsure about tax law requirements, get professional advice. </emphasis>
          </para>
        </listitem>
      </itemizedlist>

      <para>The following charts illustrate sample tax tables and may be used as starting points to determine
        the setup appropriate for a particular jurisdiction.
      </para>

      <table frame='all' id="bus-tax-tbl-eu">
        <title>Sample Tax Table Entries for EU country (e.g. 21% / 6% / 0% Belgium, 20% / 5% / 0% UK etc.) (2017)</title>

        <tgroup cols='3' align='left' colsep='1' rowsep='1'>
          <thead>
            <row>
              <entry>
                Tax Table
              </entry>

              <entry>
                Tax Table Entries [Asset/Liability]
              </entry>

              <entry>
                Percentage or Amount
              </entry>
            </row>
          </thead>

          <tbody>
            <row>
              <entry>
                Standard VAT Sales
              </entry>

              <entry>
                VAT:Sales:Standard [L]
              </entry>

              <entry>
                21%
              </entry>
            </row>

            <row>
              <entry>
                Reduced VAT Sales
              </entry>

              <entry>
                VAT:Sales:Reduced [L]
              </entry>

              <entry>
                6%
              </entry>
            </row>

            <row>
              <entry>
                Zero-Rated VAT Sales
              </entry>

              <entry>
                VAT:Sales:Zero [L]
              </entry>

              <entry>
                0%
              </entry>
            </row>

            <row>
              <entry morerows='1'>
                EC Sales
              </entry>

              <entry>
                VAT:Sales:EC [L]
              </entry>

              <entry>
                21%
              </entry>
            </row>

            <row>
              <entry>
                VAT:Sales:Reverse EC [L]
              </entry>

              <entry>
                -21%
              </entry>
            </row>

            <row>
              <entry>
                Standard VAT Purchases
              </entry>

              <entry>
                VAT:Purchases:Standard [A]
              </entry>

              <entry>
                21%
              </entry>
            </row>

            <row>
              <entry>
                Reduced VAT Purchases
              </entry>

              <entry>
                VAT:Purchases:Reduced [A]
              </entry>

              <entry>
                6%
              </entry>
            </row>

            <row>
              <entry>
                Zero-Rated VAT Purchases
              </entry>

              <entry>
                VAT:Purchases:Zero [A]
              </entry>

              <entry>
                0%
              </entry>
            </row>
          </tbody>
        </tgroup>
      </table>

      <table frame='all' id="bus-tax-tbl-au">
        <title>Sample Tax Table Entries for Australia (2017)</title>

        <tgroup cols='3' align='left' colsep='1' rowsep='1'>
          <thead>
            <row>
              <entry>
                Tax Table
              </entry>

              <entry>
                Tax Table Entries [Asset/Liability]
              </entry>

              <entry>
                Percentage or Amount
              </entry>
            </row>
          </thead>

          <tbody>
            <row>
              <entry>
                Standard GST Sales
              </entry>

              <entry>
                GST:Sales:Standard [L]
              </entry>

              <entry>
                10%
              </entry>
            </row>

            <row>
              <entry>
                GST-free Sales
              </entry>

              <entry>
                GST:Sales:Zero [L]
              </entry>

              <entry>
                0%
              </entry>
            </row>

            <row>
              <entry>
                Standard GST Purchases
              </entry>

              <entry>
                GST:Purchases:Standard [A]
              </entry>

              <entry>
                10%
              </entry>
            </row>

            <row>
              <entry>
                GST-free Purchases
              </entry>

              <entry>
                GST:Purchases:Zero [A]
              </entry>

              <entry>
                0%
              </entry>
            </row>
          </tbody>
        </tgroup>
      </table>

      <table frame='all' id="bus-tax-tbl-us">
        <title>Sample Tax Table Entries for Cook County, Illinois (2017)</title>

        <tgroup cols='3' align='left' colsep='1' rowsep='1'>
          <thead>
            <row>
              <entry>
                Tax Table
              </entry>

              <entry>
                Tax Table Entries [Asset/Liability]
              </entry>

              <entry>
                Percentage or Amount
              </entry>
            </row>
          </thead>

          <tbody>
            <row>
              <entry morerows='3'>
                Chicago Sales Taxes
              </entry>

              <entry>
                Taxes:Sales:State [L]
              </entry>

              <entry>
                6.25%
              </entry>
            </row>

            <row>
              <entry>
                Taxes:Sales:City [L]
              </entry>

              <entry>
                1.25%
              </entry>
            </row>

            <row>
              <entry>
                Taxes:Sales:County [L]
              </entry>

              <entry>
                1.75%
              </entry>
            </row>

            <row>
              <entry>
                Taxes:Sales:Region [L]
              </entry>

              <entry>
                1%
              </entry>
            </row>
          </tbody>
        </tgroup>
      </table>
    </sect2>

    <sect2 id="bus-setupcname">
      <title>Enter Company Information</title>

      <para>After you have built the account structure and defined your tax tables, designate your company in
        the &app; file. To do this, select the <guilabel>Business</guilabel> tab in the
        <guilabel>Book Options</guilabel> window, which can be accessed from
        <menuchoice>
          <guimenu>File</guimenu><guimenuitem>Properties</guimenuitem>
        </menuchoice>
        .
      </para>

      <figure>
        <title>Entering Company Information</title><screenshot id="bus-co-reg">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_co_reg.png" format="PNG"
                        srccredit="Chris Good" />
            </imageobject>

            <textobject>
              <phrase>Company Information</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>Here you can:
      </para>

      <itemizedlist>
        <listitem>
          <para>Enter the name of your company along with contact information such as your phone number, fax number,
            e-mail address and website URL.
          </para>
        </listitem>

        <listitem>
          <para>Enter your company&rsquo;s tax payer id number in the <guilabel>Company ID</guilabel> field.
          </para>
        </listitem>

        <listitem>
          <para>Select default tax tables applicable to your most common customers and vendors.
          </para>
        </listitem>
      </itemizedlist>
    </sect2>

    <sect2 id="bus_setup_pref">
      <title>Setting Business Preferences</title>

      <para>Set options on the Business tab of the &app; preferences, which is accessed via
        <menuchoice>
          <guimenu>Edit</guimenu><guimenuitem>Preferences</guimenuitem>
        </menuchoice>
        (
        <menuchoice>
          <guimenu>GnuCash</guimenu><guimenuitem>Preferences</guimenuitem>
        </menuchoice>
        on &mac;). See Help manual chapter 10.3.3 Business Book Options Tab.
      </para>
    </sect2>

    <sect2 id="bus-setupterms">
      <title>Setting Billing Terms</title>

      <para>Billing Terms can be used to determine the payment due date and be a guide for determining discount
        for early payment of invoices (or vendor bills).
      </para>

      <note>
        <para>As of &app; 2.6.7, Billing Terms are only partially supported. Date due is calculated using the
          Billing Terms but discount amount is not.
        </para>

        <para>Discount for early invoice payment is not implemented. There are 2 ways this may be done, although
          neither is recommended, and professional advice should be used to confirm that regulations
          are being complied with:
          <itemizedlist>
            <listitem>
              <para>After creating and posting a payment which pays the invoice in full, manually edit the payment
                transaction (usually strongly discouraged) and split the payment to reduce it by the
                amount of the discount and create a compensating split in an income (discount)
                account.
              </para>
            </listitem>

            <listitem>
              <para>Alternatively, after creating and posting a payment for the discounted amount, create a credit note
                for the discount using a specific negative sales income (discount) account for the
                transfer account.
              </para>
            </listitem>
          </itemizedlist>
        </para>
      </note>

      <para>You can specify the billing terms on each invoice/bill. Invoice billing terms will default from the
        customer billing terms. Bill billing terms will default from the vendor billing terms.
      </para>

      <para>Billing Terms are maintained using the Billing Terms Editor which is accessed via menu
        <menuchoice>
          <guimenu>Business</guimenu><guimenuitem>Billing Terms Editor</guimenuitem>
        </menuchoice>
        .
      </para>

      <figure>
        <title>Billing Terms Editor</title><screenshot id="bus-termsmain">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_terms_main.png" format="PNG"
                        srccredit="Chris Good" />
            </imageobject>

            <textobject>
              <phrase>Billing Terms Editor</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <figure>
        <title>New Billing Term</title><screenshot id="bus-termsnew">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_terms_new.png" format="PNG"
                         srccredit="Chris Good" />
            </imageobject>

            <textobject>
              <phrase>New Billing Term</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <itemizedlist>
        <listitem>
          <para><guilabel>Name</guilabel> The internal name of the billing term. For some examples of billing term
            names and descriptions see <ulink url="&url-wiki-pmt-term;" />.
<!-- Translators, add a reference to a list of terms common in your language -->
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Description</guilabel> The description of the billing term, printed on invoices
          </para>
        </listitem>

        <listitem>
          <para>There are 2 types of billing terms, with different information to be entered
          </para>

          <itemizedlist>
            <listitem>
              <para>Type Days
              </para>

              <itemizedlist>
                <listitem>
                  <para><guilabel>Due Days</guilabel> The invoice or bill is due to be paid within this number of days after
                    the post date
                  </para>
                </listitem>

                <listitem>
                  <para><guilabel>Discount Days</guilabel> The number of days after the post date during which a discount
                    will be applied for early payment
                  </para>
                </listitem>

                <listitem>
                  <para><guilabel>Discount %</guilabel> The percentage discount applied for early payment
                  </para>
                </listitem>
              </itemizedlist>
            </listitem>

            <listitem>
              <para>Type Proximo
              </para>

              <itemizedlist>
                <listitem>
                  <para><guilabel>Due Day</guilabel> The day of the month bills are due
                  </para>
                </listitem>

                <listitem>
                  <para><guilabel>Discount Day</guilabel> The last day of the month for the early payment discount
                  </para>
                </listitem>

                <listitem>
                  <para><guilabel>Discount %</guilabel> The discount percentage applied if paid early
                  </para>
                </listitem>

                <listitem>
                  <para><guilabel>Cutoff Day</guilabel> The cutoff day for applying bills to the next month. After the
                    cutoff, bills are applied to the following month. Negative values count
                    backwards from the end of the month.
                  </para>
                </listitem>
              </itemizedlist>
            </listitem>
          </itemizedlist>
        </listitem>
      </itemizedlist>
    </sect2>
  </sect1>

  <sect1 id="bus_ar">
    <title>Accounts Receivable</title>

    <para>Accounts Receivable (or A/R) refers to products or services provided by your company for which
      payment has not yet been received.
    </para>

    <sect2 id="bus-ar-components1">
      <title>System Components</title>

      <para>Transactions generated by the A/R system are recorded within the Accounts Receivable account.
        <emphasis>You should not work directly with this account.</emphasis> Instead, you will work
        with the four integrated &app; A/R application components available through the
        <menuchoice>
          <guimenu>Business</guimenu> <guisubmenu>Customer</guisubmenu>
        </menuchoice>
        sub-menu. These four components are:
      </para>

      <itemizedlist>
        <listitem>
          <para><guilabel>Customers</guilabel> are people or companies to whom you sell products or services on
            credit.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Invoices</guilabel> represent the physical invoice you send to a customer to request
            payment. This invoice contains an itemized list of things you sold.
          </para>

          <para>In addition, GnuCash also has support for <guilabel>Credit Notes</guilabel> which represent the
            inverse of Invoices. A credit note is usually handed to a customer to correct items that
            were incorrectly invoiced or returned.
          </para>

          <para>Both document types will be set up using the same menu items. Credit notes were introduced starting
            with &app; stable release 2.6.0.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Jobs</guilabel> (optional) is where you register Customer Jobs. Jobs are a mechanism by
            which you can group multiple invoices to a particular customer.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Process Payments</guilabel> is used to register payments you received from a customer.
          </para>
        </listitem>
      </itemizedlist>
    </sect2>

    <sect2 id="bus-ar-customers1">
      <title>Customers</title>

      <para>Customers are people or companies to whom you sell goods or services. They must be registered within
        the A/R system.
      </para>

      <sect3 id="bus-ar-custnew2">
        <title>New</title>

        <para>To register a new customer, enter the menu
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Customer</guisubmenu> <guimenuitem>New
            Customer</guimenuitem>
          </menuchoice>
          . Fill in customer information, such as Company Name, Address, Phone, Fax, etc.
        </para>

        <figure>
          <title>New Customer Registration Window</title><screenshot id="bus-ar-custnew">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_custnew.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>New Customer Registration Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>
      </sect3>

      <sect3 id="bus-ar-custfind2">
        <title>Find and Edit</title>

        <para>To search for an existing customer, use the
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Customer</guisubmenu> <guimenuitem>Find
            Customer</guimenuitem>
          </menuchoice>
          window. You select a customer to <guilabel>View/Edit</guilabel> from the results of the
          search. This window is also used to look up customers when creating invoices and
          processing payments.
        </para>

        <figure>
          <title>Find Customer Window</title><screenshot id="bus-ar-custfind">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_custfind.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>Find Customer Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>If many customers match the search criteria you provide, the search can be refined by running an
          additional search within the current results. The current result set is searched when the
          <guilabel>Refine Current Search</guilabel> radio button is selected. In fact, &app;
          selects this option for you after you run the initial search.
        </para>

        <para>If the customer you are searching for does not match the supplied search criteria, change the search
          criteria, click the <guilabel>New Search</guilabel> radio button and then the
          <guilabel>Find</guilabel> button. The relevant step is the <guilabel>New Search</guilabel>
          selection. If the customer is not in the result of the original search, and you only
          search within this set, the customer cannot be found, regardless of new search criteria.
        </para>

        <note>
          <para>To return a list of all registered active customers, set the search criterion to <guilabel>matches
            regex</guilabel>, and place a single dot "." in the text field area. Make sure
            <guilabel>Search only active data</guilabel> is checked, then click
            <guibutton>Find</guibutton>. The regular expression "." means to match anything.
          </para>
        </note>
      </sect3>
    </sect2>

    <sect2 id="bus-ar-invoices1">
      <title>Invoices</title>

      <para>An invoice is the paperwork you send to a customer to request payment for products or services
        rendered. &app; can generate and track invoices.
      </para>

      <para>A credit note is the paperwork you send to a customer to correct products or services rendered that
        were incorrectly invoiced. &app; can generate and track credit notes via the same menu
        entries as invoices.
      </para>

      <note>
        <para>This section applies to both invoices and credit notes. In order to avoid repeating everything twice
          and to keep the text easier to read it will refer only to invoices. You can apply it
          equally to credit notes. Only where the behavior of credit notes differs from invoices
          this will be explicitly mentioned.
        </para>
      </note>

      <sect3 id="bus-ar-invoicenew2">
        <title>New</title>

        <para>To send an invoice to a customer you must first create the new document. To create an invoice use
          <menuchoice>
            <guimenu>Business</guimenu> <guisubmenu>Customer</guisubmenu><guimenuitem>New
            Invoice</guimenuitem>
          </menuchoice>
          . The New Invoice window must be filled in appropriately.
        </para>

        <figure>
          <title>Creating a New Invoice</title><screenshot id="bus-ar-invoicenew">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_invoicenew.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>Creating a New Invoice</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>When you click the <guibutton>OK</guibutton> button, the <guilabel>Edit Invoice</guilabel> window
          opens.
        </para>
      </sect3>

      <sect3 id="bus-ar-invoiceedit2">
        <title>Edit</title>

        <para>From the Edit Invoice window you can enter an itemized list of goods and services you sold on this
          invoice in a manner similar to how the account register works. For credit notes you enter
          an itemized list of goods and services you refunded instead.
        </para>

        <figure>
          <title>Edit Invoice Window</title><screenshot id="bus-ar-invoiceedit">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_invoiceedit.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>Edit Invoice Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>When you have finished entering all the items, you can <guilabel>Post</guilabel> and print the
          invoice.
        </para>
      </sect3>

      <sect3 id="bus-ar-invoicepost2">
        <title>Post</title>

        <para>When you finish editing an invoice and are ready to print, you must <guilabel>Post</guilabel> the
          invoice. The invoice does not have to be posted immediately. In fact, you should only post
          an invoice when you are ready to print it. Posting an invoice places the transactions in
          an accounts receivable account.
        </para>

        <figure>
          <title>Post Invoice Window</title><screenshot id="bus-ar-invoicepost">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_invoicepost.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>Post Invoice Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>
      </sect3>

      <sect3 id="bus-ar-invoicefind2">
        <title>Find</title>

        <para>To find an existing invoice, use the
          <menuchoice>
            <guimenu>Business</guimenu> <guisubmenu>Customer</guisubmenu><guimenuitem>Find
            Invoice</guimenuitem>
          </menuchoice>
          menu item. From the results of the search, you can select an invoice to edit or view.
        </para>

        <note>
          <para>Before you can edit a posted invoice, you will need to <guilabel>Unpost</guilabel> it.
          </para>
        </note>

        <para>One of the design goals in &app;&rsquo;s Account Receivable system was to allow different processes
          to get to the same state, so you can reach an invoice from different directions based on
          the way you think about the problem:
        </para>

        <itemizedlist>
          <listitem>
            <para>You can search for the customer first, then list their invoices.
            </para>
          </listitem>

          <listitem>
            <para>You can search for invoices by number or by company name.
            </para>
          </listitem>

          <listitem>
            <para>You can list invoices associated with a customer job.
            </para>
          </listitem>
        </itemizedlist>
      </sect3>

      <sect3 id="bus-ar-invoiceprint2">
        <title>Print</title>

        <para>After you post an invoice, you should print it and send it to your customer. To print an invoice use
          <menuchoice>
            <guimenu>File</guimenu> <guimenuitem>Print Invoice</guimenuitem>
          </menuchoice>
          menu item.
        </para>

        <figure>
          <title>Invoice Print Output</title><screenshot id="bus-ar-invoiceprint">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ar_invoiceprint.png" format="PNG"
                            srccredit="Patrick Schweiger" />
              </imageobject>

              <textobject>
                <phrase>Invoice Print Output</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <note>
          <para>You can modify the appearance of the invoice, IE: add a company logo, etc. To do so, see the
            <xref
                        linkend="bus-ar-invoicechange" />.
          </para>
        </note>

        <para>Invoices can also be printed from the main window by selecting
          <menuchoice>
            <guimenu>Reports</guimenu><guisubmenu>Business Reports</guisubmenu>
            <guimenuitem>Printable Invoice</guimenuitem>
          </menuchoice>
          from the main menu. The resulting report window states that no valid invoice is selected.
          To select the invoice to print:
        </para>

        <orderedlist>
          <listitem>
            <para>Use the <guibutton>Options</guibutton> <emphasis>Toolbar</emphasis> button or select
              <menuchoice>
                <guimenu>Edit</guimenu><guimenuitem>Report Options</guimenuitem>
              </menuchoice>
              from the main menu.
            </para>
          </listitem>

          <listitem>
            <para>Select the <guilabel>General</guilabel> tab of the report options dialog.
            </para>
          </listitem>

          <listitem>
            <para>Click the <guibutton>Select</guibutton> button next to the <guilabel>Invoice Number</guilabel>
              field.
            </para>
          </listitem>

          <listitem>
            <para>Search for the invoice as usual.
            </para>
          </listitem>
        </orderedlist>

        <para>You can also print invoices from within the Process Payment dialog. See the
          <xref linkend="bus-ar-payment1" /> for instructions on how to do so.
        </para>
      </sect3>

      <sect3 id="bus-ar-invoicestarting2">
        <title>Assign Starting Invoice Number</title>

        <para>By default, &app; starts with invoice number 1 and increments from there. You can manually type an
          invoice number into the text box each time you create an invoice, but this gets tiring and
          sooner or later leads to duplicate numbers.
        </para>

        <para>You can change the starting invoice number if it is important you. Use
          <menuchoice>
            <guimenu>File</guimenu><guimenuitem>Properties</guimenuitem>
          </menuchoice>
          , access the <guilabel>Counters</guilabel> tab, change the <guilabel>Invoice
          number</guilabel> value to be one less than your desired starting invoice number and click
          the <guibutton>OK</guibutton> button or the <guibutton>Apply</guibutton> button.
        </para>
      </sect3>
    </sect2>

    <sect2 id="bus-ar-jobs1">
      <title>Customer Jobs</title>

      <para>Customer Jobs are used to group multiple invoices and credit notes to the same customer. Use of the
        Customer Jobs feature is optional. The feature is useful when you have multiple
        <guilabel>jobs</guilabel> for the same customer, and would like to view all the invoices and
        credit notes related to a single job.
      </para>

      <figure>
        <title>New Customer Job</title><screenshot id="bus-ar-jobnew">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_ar_jobnew.png" format="PNG"
                        srccredit="Patrick Schweiger" />
            </imageobject>

            <textobject>
              <phrase>New Customer Job</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>To use customer jobs, you must create them using the
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Customer</guisubmenu> <guimenuitem>New
          Job</guimenuitem>
        </menuchoice>
        menu item. You will see the <guilabel>New Job</guilabel> window.
      </para>

      <para>To edit an existing customer job, use the
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Customer</guisubmenu> <guimenuitem>Find
          Job</guimenuitem>
        </menuchoice>
        menu item. Select the desired job in the search results, and click the <guilabel>View/Edit
        Job</guilabel> button.
      </para>

      <para>To select from the invoices and credit notes associated with a given job, use
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Customer</guisubmenu><guimenuitem>Find
          Job</guimenuitem>
        </menuchoice>
        menu item. Select the desired job in the search results and click the <guilabel>View
        Invoices</guilabel> button. A window listing invoices and credit notes associated with this
        job appears. Select an invoice or credit note and click the <guilabel>View
        Invoice</guilabel> button to open an invoice editor in the main application window.
      </para>
    </sect2>

    <sect2 id="bus-ar-payment1">
      <title>Process Payment</title>

      <para>Eventually, you will receive payment from your customers for outstanding invoices. To register these
        payments, use the Process Payment application found in
        <menuchoice>
          <guimenu>Business</guimenu> <guisubmenu>Customer</guisubmenu><guimenuitem>Process
          Payment</guimenuitem>
        </menuchoice>
        .
      </para>

      <figure>
        <title>Process Customer Payment</title><screenshot id="bus-ar-payment">
          <mediaobject>
            <imageobject role="html">
              <imagedata fileref="figures/bus_ar_payment.png" format="PNG"
                        srccredit="Patrick Schweiger" width="510px" scalefit="0" />
            </imageobject>

            <imageobject role="fo">
              <imagedata fileref="figures/bus_ar_payment.png" format="PNG"
                        srccredit="Patrick Schweiger" />
            </imageobject>

            <textobject>
              <phrase>Process Payment from Customer</phrase>
            </textobject>

            <caption>
              <para>Process Payment from Customer
              </para>
            </caption>
          </mediaobject>
        </screenshot>
      </figure>
    </sect2>

    <sect2 id="bus-ar-invoicechange">
      <title>Changing the Invoice Appearance</title>

      <para>The default Invoice style, as shown in <xref
                linkend="bus-ar-invoiceprint2" />, is
        fairly barren. The default invoice style leaves the top part of the form blank, so you can
        print on company letterhead paper. There are some things you can do to change invoice
        appearance.
      </para>

      <para>Use
        <menuchoice>
          <guimenu>File</guimenu><guimenuitem>Properties</guimenuitem>
        </menuchoice>
        to enter your Company information in the <guilabel>Business</guilabel> tab of the
        <guilabel>Book Options</guilabel> window. Some of the entered information is printed on the
        right side of invoices.
      </para>

      <para>To add a customized background, heading banner or logo to invoices, modify the invoice style sheets.
        To do this, go to
        <menuchoice>
          <guimenu>Edit</guimenu> <guimenuitem>Style Sheets</guimenuitem>
        </menuchoice>
        and select the <guibutton>New</guibutton> button in the <guilabel>Select HTML Style
        Sheet</guilabel> window that will appear. You will then see a window like this:
      </para>

      <figure>
        <title>The New Style Sheet Window</title><screenshot id="bus-ar-invoicechange1">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_ar_invoicechange1.png" format="PNG"
                        srccredit="Cristian Marchi" />
            </imageobject>

            <textobject>
              <phrase>New Style Sheet Window</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>Give a <guilabel>Name</guilabel> to the new style sheet (e.g. <guilabel>Custom Invoice</guilabel>)
        and select the <guilabel>Fancy</guilabel> <guilabel>Template</guilabel>. When you click the
        <guibutton>OK</guibutton> button, the <guilabel>HTML Style Sheet Properties</guilabel>
        window is displayed. This window presents you five sections listed in the left pane:
        <guilabel>Colors</guilabel>, <guilabel>Fonts</guilabel>, <guilabel>General</guilabel>,
        <guilabel>Images</guilabel>, and <guilabel>Tables</guilabel>. The
        <guilabel>Colors</guilabel> section allows you to change the colors of various items of the
        invoice. The <guilabel>Fonts</guilabel> section lets you set fonts type and dimensions. The
        <guilabel>General</guilabel> section allows you to set the <guilabel>Preparer</guilabel> and
        <guilabel>Prepared for</guilabel> information, and to <guilabel>Enable Links</guilabel>. The
        <guilabel>Images</guilabel> section allows you to import graphics into the style sheet. The
        <guilabel>Tables</guilabel> section allows you to adjust the spacing around the tables which
        make up the invoice.
      </para>

      <para>To include a company logo, banner heading and background image, use your favorite graphics
        application such as <application>The Gimp</application> or &app-aoo;/&app-lo; 
        Draw to save the images in either <acronym>GIF</acronym> or
        <acronym>PNG</acronym> format. Then import them into the style sheet using the
        <guilabel>Images</guilabel> section described above.
      </para>

      <para>Below is an example that imports all three types of images.
      </para>

      <figure>
        <title>HTML Style Sheets Example Window</title><screenshot id="bus-ar-invoicechange2">
          <mediaobject>
            <imageobject role="html">
              <imagedata fileref="figures/bus_ar_invoicechange2.png" format="PNG"
                        srccredit="Cristian Marchi" width="510"/>
            </imageobject>

            <imageobject role="fo">
              <imagedata fileref="figures/bus_ar_invoicechange2.png" format="PNG"
                        srccredit="Cristian Marchi"/>
            </imageobject>

            <textobject>
              <phrase>HTML Style Sheets Example Window</phrase>
            </textobject>

            <caption>
              <para>The <acronym>HTML</acronym> Style Sheets window with an example Background Tile, Heading Banner, and
                Logo.
              </para>
            </caption>
          </mediaobject>
        </screenshot>
      </figure>

      <note>
        <para>The images are placed in the invoice as follows. The <guilabel>Background Tile</guilabel> is tiled
          to become the background image, the <guilabel>Heading Banner</guilabel> goes to above the
          invoice text, and the <guilabel>Logo</guilabel> is placed in the upper left corner of the
          invoice to the left of the Heading Banner. You will probably have to try a few different
          sized images until you get the invoices to print nicely. Some sizing suggestions are that
          the Logo should be 1 square cm (~0.5 inch), and the Heading Banner should be 15 cm (~6
          inches) wide and 1 cm (~0.5 inch) tall.
        </para>
      </note>

      <para>With the style sheet configured, when you print the invoice, you select the style sheet to use from
        the <guimenu>Options</guimenu> menu. Below is the resultant invoice after applying the style
        sheet demonstrated above.
      </para>

      <figure>
        <title>HTML Style Sheets Example Output</title><screenshot id="bus-ar-invoicechange3">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_ar_invoicechange3.png" format="PNG"
                        srccredit="Patrick Schweiger" />
            </imageobject>

            <textobject>
              <phrase>HTML Style Sheets Example Output</phrase>
            </textobject>

            <caption>
              <para>The hideous invoice which results from the graphics selected in the style sheet.
              </para>
            </caption>
          </mediaobject>
        </screenshot>
      </figure>
    </sect2>
  </sect1>

  <sect1 id="bus_ap">
    <title>Accounts Payable</title>

    <para>Accounts Payable (or A/P) refers to the accounting of products or services which a company has
      bought and needs to pay for.
    </para>

    <sect2 id="bus-ap-components1">
      <title>System Components</title>

      <para>&app; has an integrated accounts payable system. The transactions generated by the A/P system are
        placed within the Accounts Payable account, as a record of what occurs. Generally you do not
        directly work with this account but use the four integrated &app; A/P application
        components. The A/P components are available from the
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu>
        </menuchoice>
        sub-menu. These A/P components are:
      </para>

      <itemizedlist>
        <listitem>
          <para><guilabel>Vendors</guilabel> are people or companies from which you buy products or services on
            credit.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Bills</guilabel> represent the physical bills vendors send to request payment from you. A
            bill contains an itemized list of things you purchased.
          </para>

          <para>In addition, GnuCash also has support for <guilabel>Credit Notes</guilabel> which represent the
            inverse of Bills. A credit note is usually received from a vendor to correct items that
            were erroneously billed or returned.
          </para>

          <para>Both document types will be set up using the same menu items.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Jobs</guilabel> (optional) is where you register Vendor Jobs. Jobs are mechanism by which
            you can group multiple bills from a particular vendor.
          </para>
        </listitem>

        <listitem>
          <para><guilabel>Process Payments</guilabel> is where you register payments to a vendor to whom you owe
            money.
          </para>
        </listitem>
      </itemizedlist>

      <para>The following sections introduce the individual Accounts Payable application components.
      </para>
    </sect2>

    <sect2 id="bus-ap-vendors1">
      <title>Vendors</title>

      <para>A vendor is a company or person from whom you purchase goods or services. Vendors must be registered
        within the A/P system.
      </para>

      <sect3 id="bus-ap-vendornew2">
        <title>New</title>

        <para>To register a new vendor, select the
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem> New
            Vendor</guimenuitem>
          </menuchoice>
          menu item. Fill in general information about the vendor, such as Company Name, Address,
          Phone, Fax, etc. Below is a list of the other options:
        </para>

        <para>This is what the New Vendor registration window looks like:
        </para>

        <figure>
          <title>New Vendor Registration Window</title><screenshot id="bus-ap-vendornew">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ap_vendornew.png" srccredit="Patrick Schweiger" format="PNG"/>
              </imageobject>

              <textobject>
                <phrase>New Vendor Registration Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>
      </sect3>

      <sect3 id="bus-ap-vendorfind2">
        <title>Find and Edit</title>

        <para>To search for an existing vendor, use the
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem> Find
            Vendor</guimenuitem>
          </menuchoice>
          window. You select a vendor to <guibutton>View/Edit</guibutton> from the results of the
          search. This window is also used to look up a vendor when entering bills and processing
          payments.
        </para>

        <figure>
          <title>Find Vendor Window</title><screenshot id="bus-ar-vendorfind">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ap_vendorfind.png" srccredit="Patrick Schweiger" format="PNG"/>
              </imageobject>

              <textobject>
                <phrase>Find Vendor Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>If many vendors match the search criteria you provide, the search can be refined by running an
          additional search within the current results. The current result set is searched when the
          <guilabel>Refine Current Search</guilabel> radio button is selected. In fact, &app;
          selects this option for you after you run the initial search.
        </para>

        <para>If the vendor you are searching for does not match the supplied search criteria, change the search
          criteria, click the <guilabel>New Search</guilabel> radio button and then the
          <guibutton>Find</guibutton> button. The relevant step is the <guilabel>New
          Search</guilabel> selection. If the vendor is not in the result of the original search,
          and you only search within this set, the vendor cannot be found, regardless of new search
          criteria.
        </para>

        <note>
          <para>To return a list of all registered active vendors, set the search criterion to <guilabel>matches
            regex</guilabel>, and place a single dot <quote>.</quote> in the text field area. Make
            sure <guilabel>Search only active data</guilabel> is checked, then click
            <guibutton>Find</guibutton>. The regular expression <quote>.</quote> means to match
            anything.
          </para>
        </note>
      </sect3>
    </sect2>

    <sect2 id="bus-ap-bills1">
      <title>Bills</title>

      <para>A bill is a request for payment you receive from a vendor. &app; can track bills.
      </para>

      <para>A credit note is the document you receive from a vendor to correct products or services rendered
        that you were incorrectly charged for on a bill. &app; can generate and track credit notes
        via the same menu entries as bills.
      </para>

      <note>
        <para>This section applies to both bills and credit notes. In order to avoid repeating everything twice
          and to keep the text easier to read it will refer only to bills. You can apply it equally
          to credit notes. Only where the behaviour of credit notes differs from bills this will be
          explicitly mentioned.
        </para>
      </note>

      <sect3 id="bus-ap-billnew2">
        <title>New</title>

        <para>When you receive a bill from a vendor and want to enter it into &app;, you must create a new bill.
          To create a new bill use the
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem>New
            Bill</guimenuitem>
          </menuchoice>
          menu item, and fill in the resulting window appropriately.
        </para>

        <figure>
          <title>New Bill Registration Window</title><screenshot id="bus-ap-billnew">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ap_billnew.png" srccredit="Patrick Schweiger" format="PNG"/>
              </imageobject>

              <textobject>
                <phrase>New Bill Registration Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>When you click the <guibutton>OK</guibutton> button the <guilabel>Edit Bill</guilabel> window opens.
        </para>
      </sect3>

      <sect3 id="bus-ap-billedit2">
        <title>Edit</title>

        <para>From the Edit Bill window you can enter an itemized list of goods and services you purchased, in a
          manner similar to how the account register works. For credit notes you enter an itemized
          list of goods and services the vendor refunded instead.
        </para>

        <figure>
          <title>Edit Bill Window</title><screenshot id="bus-ap-billedit">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ap_billedit.png" srccredit="Patrick Schweiger" format="PNG"/>
              </imageobject>

              <textobject>
                <phrase>Edit Bill Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>

        <para>When you have finished entering all the items, <guilabel>Post</guilabel> the bill.
        </para>
      </sect3>

      <sect3 id="bus-ap-billpost2">
        <title>Post</title>

        <para>When you finish editing a bill, you should <guilabel>Post</guilabel> the bill. You do not have to
          post the bill, you can close it and return to it later. You have to post the bill
          eventually. Posting a bill places its transactions into an accounts payable account. The
          Post Bill window appears and asks you to enter information:
        </para>

        <figure>
          <title>Post Bill Window</title><screenshot id="bus-ap-billpost">
            <mediaobject>
              <imageobject>
                <imagedata fileref="figures/bus_ap_billpost.png" srccredit="Patrick Schweiger" format="PNG"/>
              </imageobject>

              <textobject>
                <phrase>Post Bill Window</phrase>
              </textobject>
            </mediaobject>
          </screenshot>
        </figure>
      </sect3>

      <sect3 id="bus-ap-billfind2">
        <title>Find</title>

        <para>To find an existing bill, use the
          <menuchoice>
            <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem>Find
            Bill</guimenuitem>
          </menuchoice>
          menu item. From the results of the search, you can select a bill to edit, or view.
        </para>

        <note>
          <para>Before you can edit a posted bill, you will need to <guilabel>Unpost</guilabel> it.
          </para>
        </note>

        <note>
          <para>There are other ways to access an existing bill. These are similar to accessing invoices for your
            customers. See <xref linkend="bus-ar-invoicefind2" /> for more information.
          </para>
        </note>
      </sect3>
    </sect2>

    <sect2 id="bus-ap-jobs1">
      <title>Vendor Jobs</title>

      <para>Vendor Jobs are used to group multiple bills and credit notes from a single vendor. Use of the
        vendor jobs feature is optional. The feature is useful when you have multiple
        <guilabel>jobs</guilabel> for the same vendor, and would like to view all the bills and
        credit notes for a single job.
      </para>

      <para>To use vendor jobs, you must create them using the
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem>New
          Job</guimenuitem>
        </menuchoice>
        menu item. You will see the <guilabel>New Job</guilabel> window.
      </para>

      <figure>
        <title>New Vendor Job</title><screenshot id="bus-ap-jobnew">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_ap_jobnew.png" srccredit="Jon Lapham" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>New Vendor Job</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>To edit an existing vendor job, use the
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu> <guimenuitem>Find
          Job</guimenuitem>
        </menuchoice>
        menu item. Select the desired job in the search results, and click the <guilabel>View/Edit
        Job</guilabel> button.
      </para>

      <para>To select from the bills associated with a given job, use
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu> <guimenuitem>Find
          Job</guimenuitem>
        </menuchoice>
        menu item. Select the desired job in the search results and click the <guilabel>View
        Invoices</guilabel> button. A window listing bills and credit notes associated with this job
        appears. Select a bill or credit note and click the <guilabel>View Invoice</guilabel> button
        to open a bill editor in the main application window.
      </para>
    </sect2>

    <sect2 id="bus-ap-payment1">
      <title>Process Payment</title>

      <para>Eventually, you need to pay your bills. To do so, use the Process Payment application found in
        <menuchoice>
          <guimenu>Business</guimenu><guisubmenu>Vendor</guisubmenu><guimenuitem>Process
          Payment</guimenuitem>
        </menuchoice>
        .
      </para>

      <para>Below is the &app; Accounts Payable payment window.
      </para>

      <figure>
        <title>Process Vendor Payment</title><screenshot id="bus-ap-payment">
          <mediaobject>
            <imageobject role="html">
              <imagedata fileref="figures/bus_ap_payment.png" srccredit="Patrick Schweiger" format="PNG" width="510"/>
            </imageobject>

            <imageobject role="fo">
              <imagedata fileref="figures/bus_ap_payment.png" srccredit="Patrick Schweiger" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>Process Payment to Vendor</phrase>
            </textobject>

            <caption>
              <para>Process Payment to Vendor
              </para>
            </caption>
          </mediaobject>
        </screenshot>
      </figure>
    </sect2>
  </sect1>

  <sect1 id="bus_payroll">
    <title>Payroll</title>

    <para>Payroll is a financial record of wages, net pay, paid vacations, and deductions for an employee.
      This section demonstrates how to track payroll using &app;.
    </para>

    <sect2 id="bus-payroll-concepts">
      <title>Basic Concepts</title>

      <para>Payroll is a financial record of wages, net pay, paid vacations, and deductions for an employee.
        Basically, anything that relates to giving money or benefits to an employee. Payroll is one
        of the more complex tasks in accounting, because there are many different accounts, people,
        and agencies involved in paying salaries.
      </para>

      <para>Payroll is typically accounted for as an expense. Sometimes accountants <quote>store</quote> some
        payroll expenses in a short term liability account. This is useful for things such as
        payroll taxes, which may be paid at a different time than the employee. The employee might
        get paid biweekly, while taxes are paid quarterly. This chapter presents a methodology which
        expenses payroll immediately for salaries, but stores taxes in liability accounts.
      </para>

      <note>
        <para>&app; does not have an integrated payroll system. While you can track payroll expenses in &app;, the
          calculation of taxes and deductions has to be done outside of &app;.
        </para>
      </note>
    </sect2>

    <sect2 id="bus-payroll-acct">
      <title>Account Setup</title>

      <para>Local tax law must be considered when setting up accounts. Because there are many different ways
        payroll taxes are handled throughout the world, this section presents a very simple
        structure. From this, you should be able to adapt your particular payroll deductions setup.
      </para>

      <para>Assume that you must pay 2 taxes, Tax1 and Tax2, and that each has an employee contribution and an
        employer contribution.
      </para>

      <para>The employee&rsquo;s salary and these two taxes are expense accounts. The tax components are
        liability accounts. The tax liability accounts are where you accumulate the taxes withheld
        for all of your employees. The taxes are later paid to the appropriate government agency.
      </para>

      <para><screen>Simple Payroll Account Layout:

-Assets
--Checking
-Liabilities
--Tax1  (short term <quote>storage</quote> account)
--Tax2  (short term <quote>storage</quote> account)
-Expenses
--Salaries
--Tax1
--Tax2</screen>
        <note>
          <para>Resist the temptation to create per-employee sub-accounts to track individual salaries. Creating a
            sub-account for each employee leads to unmanageably large lists of accounts. Imagine the
            account structure after a few years of employees coming and going. It is much simpler to
            keep all of your employees&rsquo; payroll records within a single account
            (<emphasis>Expenses:Salaries</emphasis> for example) and use reports to view
            per-employee information.
          </para>

          <para>The Transaction report can be used to sort and total by description or memo (but not by part of
            them).
          </para>

          <para>To report salary transactions for a specific employee where the employee name or code is entered in
            the transaction description or memo, use the <guilabel>Find Transaction</guilabel>
            assistant (
            <menuchoice>
              <guimenu>Edit</guimenu><guimenuitem>Find</guimenuitem>
            </menuchoice>
            ) to select the transactions, and then report on them using
            <menuchoice>
              <guimenu>Reports</guimenu><guimenuitem>Account Report </guimenuitem>
            </menuchoice>
            . Further formatting or analysis may be done by copying and pasting the report into a
            spreadsheet. See <ulink type="help" url="ghelp:gnucash-help?tool-find-txn">Find
            Transaction</ulink> in the &app; Help Manual.
          </para>
        </note>
      </para>
    </sect2>

    <sect2 id="bus-payroll-protocol">
      <title>Payroll Protocol Sample</title>

      <para>&app; does not have an integrated payroll system. &app; can track your payroll expenses, but you
        need to develop a payroll protocol and perform the calculations outside of &app;, in a
        spreadsheet for example. In this section, one such protocol is presented. You can use the
        sample protocol as a model.
      </para>

      <sect3 id="bus-pay-protocol-1">
        <title>Step 1: Deductions list</title>

        <para>The first step to the payroll protocol is to create a list of all the possible taxes and deductions
          for each employee. Each entry should include definitions and formulas for calculating each
          value. Once the protocol is established it needs to be changed only when payroll laws or
          tax rates change.
        </para>

        <para>In the proposed scenario, such a list would look like this:
        </para>

        <itemizedlist spacing="compact">
          <listitem>
            <para><emphasis>E_GROSS_SALARY</emphasis> - Employee gross salary
            </para>
          </listitem>

          <listitem>
            <para><emphasis>E_TAX1</emphasis> - Employee contribution to tax1 (X% of E_GROSS_SALARY)
            </para>
          </listitem>

          <listitem>
            <para><emphasis>E_TAX2</emphasis> - Employee contribution to tax2 (X% of E_GROSS_SALARY)
            </para>
          </listitem>

          <listitem>
            <para><emphasis>C_TAX1</emphasis> - Company contribution to tax1 (X% of E_GROSS_SALARY)
            </para>
          </listitem>

          <listitem>
            <para><emphasis>C_TAX2</emphasis> - Company contribution to tax2 (X% of E_GROSS_SALARY)
            </para>
          </listitem>
        </itemizedlist>

        <note>
          <para>The employee&rsquo;s net salary (E_NET_SALARY) is defined as E_GROSS_SALARY - E_TAX1 - E_TAX2 and
            need not be placed in this list since it is composed of items that already exist.
          </para>
        </note>

        <para>Place the actual formulas for calculating each deduction in this list. Sometimes these formulas are
          quite complex, and sometimes they simply say "look it up in table XYZ of the tax codes".
        </para>

        <para>Notice that you can calculate some interesting values using the above definitions. One such value is
          the total cost to the company: E_GROSS_SALARY + C_TAX1 + C_TAX2.
        </para>
      </sect3>

      <sect3 id="bus-pay-protocol-2">
        <title>Step 2: Create the Transaction Map</title>

        <para>When you record payroll in &app;, do so with a single split transaction. This split transaction
          populates the appropriate expense and liability accounts. If you need to look the payroll
          details at a later time, open the split transaction.
        </para>

        <para>With the deductions list from above, an employee split transaction map can be generated. Each of the
          items in the list is mapped to a &app; account.
        </para>

        <para><table id="bus-payroll-txn-tbl">
            <title>Payroll Transaction Map</title>

            <tgroup cols="3">
              <thead>
                <row>
                  <entry>
                    Account
                  </entry>

                  <entry>
                    Increase
                  </entry>

                  <entry>
                    Decrease
                  </entry>
                </row>
              </thead>

              <tbody>
                <row>
                  <entry>
                    Assets:Checking
                  </entry>

                  <entry></entry>

                  <entry>
                    E_NET_SALARY
                  </entry>
                </row>

                <row>
                  <entry>
                    Expenses:Salaries
                  </entry>

                  <entry>
                    E_GROSS_SALARY
                  </entry>

                  <entry></entry>
                </row>

                <row>
                  <entry>
                    Liabilities:Tax1
                  </entry>

                  <entry></entry>

                  <entry>
                    E_TAX1
                  </entry>
                </row>

                <row>
                  <entry>
                    Liabilities:Tax2
                  </entry>

                  <entry></entry>

                  <entry>
                    E_TAX2
                  </entry>
                </row>

                <row>
                  <entry>
                    Expenses:Tax1
                  </entry>

                  <entry>
                    C_TAX1
                  </entry>

                  <entry></entry>
                </row>

                <row>
                  <entry>
                    Liabilities:Tax1
                  </entry>

                  <entry></entry>

                  <entry>
                    C_TAX1
                  </entry>
                </row>

                <row>
                  <entry>
                    Expenses:Tax2
                  </entry>

                  <entry>
                    C_TAX2
                  </entry>

                  <entry></entry>
                </row>

                <row>
                  <entry>
                    Liabilities:Tax2
                  </entry>

                  <entry></entry>

                  <entry>
                    C_TAX2
                  </entry>
                </row>
              </tbody>
            </tgroup>
          </table>
        </para>

        <para>Note that the C_TAX1 and C_TAX2 components have entries in the both the liability and expense
          accounts. The company component of each tax is expensed at the time of payroll, but
          remains a liability until taxes are due.
        </para>
      </sect3>

      <sect3 id="bus-pay-protocol-3">
        <title>Step 3: Pay the Employee</title>

        <para>Go to the account from which the employee will be paid, for example your
          <emphasis>Assets:Checking</emphasis> account. Open a split transaction and enter the real
          values using the Transaction Map above as a guide. Repeat this for all employees.
        </para>

        <tip>
          <para>This manual process is tedious, especially if you have a large number of employees.
          </para>

          <para>One &app; tool you certainly want use when entering employee payroll is duplicate transaction (use
            the <guibutton>Duplicate</guibutton> <emphasis>Toolbar</emphasis> button). This saves
            you from having to enter all the transaction splits for each employee. You still need to
            change the amounts of money to match each employee&rsquo;s real payroll values, but you
            will not have to build the split for each employee.
          </para>

          <para>If payroll transactions do not change significantly every pay period, you can also use the duplicate
            transaction feature to duplicate each employee&rsquo;s most recent payroll transaction
            for the current pay period. If you find you are doing so all the time, read about the
            Schedule Transactions feature and save even more time!
          </para>
        </tip>
      </sect3>

      <sect3 id="bus-pay-protocol-4">
        <title>Step 4: Pay the Government</title>

        <para>The final thing to do is to pay the taxes to the government. The liability accounts have been
          collecting the taxes for various government agencies, and periodically you need to send a
          check to the government to pay this charge. To do so, you simply enter a 2 account
          transaction in (for example) your checking account to pay off the tax liability. The
          transaction is between the checking account and the liability account, no expense account
          is involved. The expense accounts are charged at the time the tax liability is recorded.
        </para>
      </sect3>
    </sect2>

    <sect2 id="bus-payroll-example">
      <title>Business Payroll Example</title>

      <para>Using the account setup seen previously, let&rsquo;s go through an example. Assume that there are 2
        employees (E1 and E2) who each earn $1000 per month gross salary. The employee contribution
        to Tax1 and Tax2 are 10% and 5% respectively. The company contribution to Tax1 and Tax2 are
        15% and 10% each on top of the employee&rsquo;s gross salary.
      </para>

      <para>Starting with $50k in the bank, and before doing any payroll, the account hierarchy looks like this:
      </para>

      <figure>
        <title>Payroll Example: Initial Setup</title><screenshot id="bus-pay-ex1">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_pay_ex1.png"
                 srccredit="Patrick Schweiger" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>Payroll Example 1</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>The deductions list for employee 1 are:
      </para>

      <itemizedlist>
        <listitem>
          <para><emphasis>E_GROSS_SALARY</emphasis> - Employee gross salary - <emphasis>$1000</emphasis>
          </para>
        </listitem>

        <listitem>
          <para><emphasis>E_TAX1</emphasis> - Employee contribution to tax1 - <emphasis>$100</emphasis> (10% of
            E_GROSS_SALARY)
          </para>
        </listitem>

        <listitem>
          <para><emphasis>E_TAX2</emphasis> - Employee contribution to tax2 - <emphasis>$50</emphasis> (5% of
            E_GROSS_SALARY)
          </para>
        </listitem>

        <listitem>
          <para><emphasis>C_TAX1</emphasis> - Company contribution to tax1 - <emphasis>$150</emphasis> (15% of
            E_GROSS_SALARY)
          </para>
        </listitem>

        <listitem>
          <para><emphasis>C_TAX2</emphasis> - Company contribution to tax2 - <emphasis>$100</emphasis> (10% of
            E_GROSS_SALARY)
          </para>
        </listitem>
      </itemizedlist>

      <para><table id="bus-payroll-txn-empl-tbl">
          <title>Payroll Transaction Map for Employee 1</title>

          <tgroup cols="3">
            <thead>
              <row>
                <entry>
                  Account
                </entry>

                <entry>
                  Increase
                </entry>

                <entry>
                  Decrease
                </entry>
              </row>
            </thead>

            <tbody>
              <row>
                <entry>
                  Assets:Checking
                </entry>

                <entry></entry>

                <entry>
                  $850 (E_NET_SALARY)
                </entry>
              </row>

              <row>
                <entry>
                  Expenses:Salaries
                </entry>

                <entry>
                  $1000 (E_GROSS_SALARY)
                </entry>

                <entry></entry>
              </row>

              <row>
                <entry>
                  Liabilities:Tax1
                </entry>

                <entry></entry>

                <entry>
                  $100 (E_TAX1)
                </entry>
              </row>

              <row>
                <entry>
                  Liabilities:Tax2
                </entry>

                <entry></entry>

                <entry>
                  $50 (E_TAX2)
                </entry>
              </row>

              <row>
                <entry>
                  Expenses:Tax1
                </entry>

                <entry>
                  $150 (C_TAX1)
                </entry>

                <entry></entry>
              </row>

              <row>
                <entry>
                  Liabilities:Tax1
                </entry>

                <entry></entry>

                <entry>
                  $150 (C_TAX1)
                </entry>
              </row>

              <row>
                <entry>
                  Expenses:Tax2
                </entry>

                <entry>
                  $100 (C_TAX2)
                </entry>

                <entry></entry>
              </row>

              <row>
                <entry>
                  Liabilities:Tax2
                </entry>

                <entry></entry>

                <entry>
                  $100 (C_TAX2)
                </entry>
              </row>
            </tbody>
          </tgroup>
        </table>
      </para>

      <para>From the checking account, enter the split transaction for employee 1. It should look like this:
      </para>

      <figure>
        <title>Payroll Example: Employee Split Transaction</title><screenshot id="bus-pay-ex2">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_pay_ex2.png"
                    srccredit="Patrick Schweiger" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>Payroll Example 2</phrase>
            </textobject>

            <caption>
              <para>The Split Transaction for Employee 1
              </para>
            </caption>
          </mediaobject>
        </screenshot>
      </figure>

      <tip>
        <para>When paying employees, enter only the employee name in the Description area. If you decide to use
          &app;&rsquo;s check printing capabilities, the check is automatically made out to the
          correct employee. If you want to record other information in the transaction besides the
          employee name, use the Notes area, available when viewing the Register in double-line
          mode.
        </para>
      </tip>

      <para>Repeat this for the second employee, which leaves the account hierarchy looking like this:
      </para>

      <figure>
        <title>Payroll Example: Accounts After Salaries Paid</title><screenshot id="bus-pay-ex3">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_pay_ex3.png"
                    srccredit="Patrick Schweiger" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>Payroll Example 3</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>

      <para>Now, you will enter the company contributions. The <emphasis>Liabilities:Tax1</emphasis> and
        <emphasis>Liabilities:Tax2</emphasis> accounts track how much you must pay to the government
        for each tax type. When it is time to pay these agencies, you will make a transaction from
        the checking account to these liability accounts. No expense accounts are involved. The main
        account will then appear like this:
      </para>

      <figure>
        <title>Payroll Example: Accounts After Paying Government</title><screenshot id="bus-pay-ex4">
          <mediaobject>
            <imageobject>
              <imagedata fileref="figures/bus_pay_ex4.png"
                    srccredit="Patrick Schweiger" format="PNG"/>
            </imageobject>

            <textobject>
              <phrase>Payroll Example 4</phrase>
            </textobject>
          </mediaobject>
        </screenshot>
      </figure>
    </sect2>
  </sect1>
</chapter>
