correct usage of "R" field, esp. with respect to credit card account type

Question

Using GnuCash to track where my money goes and what comes in. I have as assets my bank account and "cash in wallet", and many expense accounts for food, gas, water, electricity, clothes, transport/commuting and so on.

I am confused about how to use the "R" field, especially in the context of my credit card.

Right now, when I buy something with my credit card, I make an entry in GnuCash for that day when I bought the item. But sellers never bill my credit card on that day, but several days later. So when in my online website of my credit card company this purchase shows up, I set the "R" field from "n" to "c".

Is this the correct way to do it?

What I thereby try to do is somehow reflect in my books that "using my credit card" and actually "getting billed" are two different states, and I think the "R" field is supposed to reflect that. I read section "4.5. Reconciliation" in the Tutorial & Concepts Guide but do not understand what the actual later reconciliation process (getting from "c" to "y") is for, though.

Also, closely related question, should I then set the day to the date when the seller billed my credit card? I.e. I am confused what the day should best reflect, the day when I made the purchase or the day when the credit card is billed?

Answer 1

The "c" option represents a 'cleared' transaction, in other words your lender has received the charge and paid the amount to the vendor shown in your transaction history. The next time you receive a bill / statement from your lender, you then go through the process of reconciling the account ('reconciling' transactions between the borrower i.e. yourself, and the lender).

Marking each of the transactions 'cleared' prior to reconciling is useful, however unnecessary. You can reconcile an account with no transactions marked as cleared, and the process of checking each item off in the reconciliation window will automatically clear them for you. However, if you wish to review your account more often than just once a month, you can mark off the transactions shown on your lender's website at that time (clearing them). Then at the end of the month when you receive your bill, the cleared transactions will already show up as reconciled, thus speeding up the process.

As far as when to record the transaction, the default behavior (if you download / import transactions from your lender) is to show them on the date that the transaction clears the lender. I believe that imported transactions like this automatically show up with the cleared flag set (I'm 98% sure). My personal preference, however, is to show transactions on the date they were charged, i.e. the 'receipt date', on average 1-2 days before my credit card sees them. This gives me a better idea of when expenses were incurred. It's up to you if you want to go through the effort of entering transactions on the receipt date, but it sounds like you're already devoting the energy needed to keep up such records.