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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?

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    Marking an item cleared 'c' shows that you believe it has been processed (perhaps because you notice that your balance is lower, or because you see it on the bank's web site). Marking an item reconciled 'y' means that it is done. Both you and the other party (bank, credit card etc) are agreeing that the transaction happened. It brings your books and their books into agreement. – verdammelt May 18 '15 at 11:47
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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.

  • The date can be important for tax reasons. If a check is written in one calendar year but cashed in the next it can still be applied to the first year's taxes (e.g. charity, business expenses). So keeping the date as when the transaction happened not when it cleared can be useful. – verdammelt May 18 '15 at 23:21
  • @verdammelt I agree with you completely, and I tried to convey that in my response with the 'receipt date' concept. Do you think this idea needs more clarification in my answer? – Derek_6424246 May 19 '15 at 15:45
  • It might be worth a note in the answer that at least for US taxes it can be important. I felt your mention was your preference (nothing wrong with that) but not why it was your preference (but maybe I missed it). – verdammelt May 20 '15 at 0:34

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