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 GnuCash and click on File → New File and proceed until you see the list of available accounts, select Business Accounts.

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.

To use GnuCash’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 A/Receivable. GnuCash will use this account to place transactions related to the integrated accounts receivable system.

To use GnuCash’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 A/Payable. GnuCash will use this account to place transactions related to the integrated accounts payable system.

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

You need to add additional accounts to this hierarchy for it to be useful.

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

	Note
	If you deal with customers in more than one currency you will need a separate Accounts Receivable account for each currency. If you deal with vendors in more than one currency you will need a separate Accounts Payable account for each currency.

	Note
	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!

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

A tax table entry can be assigned to an invoice line or bill line.

Set up distinct tax tables for customers and vendors.

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.

The default tax table entry for new customers or new vendors can be specified in the Book Options window which can be accessed by File → Properties → Business tab.

Sales Tax Tables are maintained using the Sales Tax Table editor which is accessed via menu Business → Sales Tax Table .

Figure 13.1. Sales Tax Tables Editor

Figure 13.2. New Sales Tax Table Entry

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

After you have built the account structure and defined your tax tables, designate your company in the GnuCash file. To do this, select the Business tab in the Book Options window, which can be accessed from File → Properties .

Figure 13.3. Entering Company Information

Here you can:

Set options on the Business tab of the GnuCash preferences, which is accessed via Edit → Preferences ( GnuCash → Preferences on macOS). See GnuCash Manual chapter 10.3.3 Business Book Options Tab.

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).

Note

As of GnuCash 2.6.7, Billing Terms are only partially supported. Date due is calculated using the Billing Terms but discount amount is not. 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: 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. 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.

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.

Billing Terms are maintained using the Billing Terms Editor which is accessed via menu Business → Billing Terms Editor .

Figure 13.4. Billing Terms Editor

Figure 13.5. New Billing Term