Budgeting - Let's decide what

Linas Vepstas linas at linas.org
Fri Aug 29 15:19:56 CDT 2003


Hi,

Please take note of how Stuart decribes budgeting. 
-- subaccounts are not sufficient, they don't slice across the tree.
-- the word 'account' carries too much baggage. 'class/action'
   is a more neutral terminology signifying this concept.

----- Forwarded message from "Stuart D. Gathman" <stuart at bmsi.com> -----

> > - Try to come up with an account structure that will work around the 1D
> >   accounting (no classes / departments / whatever you would call additional
> >   accounting dimensions in GnuCash they aren't supported last I checked).
> 
> There's a weaker concept called 'actions' which has never had a gui
> attached to it.  Could that be made to work?

Probably.  All that's required is an additional component or components
to the account id - after that, it's all in the reporting.  

Here is what I use additional dimensions (Quicken classes) for at home:

classes:

julie	- Discretionary and budget area responsibility spending by my wife 
stuart	- Discretionary spending by me
other	- Fixed expenses
vaca	- Vacation expenses
xmas	- Christmas expenses

You need 2D because of substantial overlap in accounts between the classes.
For instance, 'food' is an item that is part of Julie's budget, an
impulse item for me (my discretionary spending is limited to $150/mo - that
includes computer equipment), a vacation expense, and an xmas expense.
'gas' is an item in three of the classes.

Each of those classes has a cumulative budget amount.  I can spend my $150/mo on
whatever I want.  Sometimes it's computer stuff, more often, I take
Julie out to dinner.  If I spend less, I get to spend more next month.
We can spend the vacation budget differently each year.  Lately, it's
been family camp with the kids plus a few beach trips.

It would be possible to create separate account for foodjulie, foodstuart,
foodvaca, foodxmas.  In fact, with 1D accounting, I would make each of those
classes into its own account tree.  This is not totally redundant, for instance
most of the fixed expenses like mortgage and powerbill don't appear in any
other class.  But then it is harder to get a report on
overall food spending - it is the sum of all four classes.

In short, you need reports that select or sort by class/action, and
reports that ignore class/action.

Some of our customers have three dimensions.  For instance, a property
management customer has accounts,departments,projects.

Each department is a reponsibility area of the company.  Each 
project is a group of properties, e.g. a row house tract.

You can print a profit/loss for each project - to see which projects
are albatrosses, and where they are leaking cash (can it be fixed? or
should it be sold to cut losses?)  You can print a profit/loss for
each department, to see which departments are lean and mean, and which
need some fat trimmed (and where).  You can of course also print an overall
profit/loss for the entire company.

-- 
			Stuart D. Gathman <stuart at bmsi.com>
      Business Management Systems Inc.  Phone: 703 591-0911 Fax: 703 591-6154
	"[Microsoft] products are even less buggy than others, in terms of
	    per capita usage." - Steve Balmer, Microsoft Corporation

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----- End forwarded message -----

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pub  1024D/01045933 2001-02-01 Linas Vepstas (Labas!) <linas at linas.org>
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