Newbie's experience with gnucash
Eric Schwartz
emschwar@rmi.net
Mon, 16 Oct 2000 11:45:52 -0600
At 08:24 AM 10/16/00 -0500, Bill Gribble wrote:
>First of all, forget that you ever heard the word "double entry".
>Yes, it's there, but it's more an implementation detail than something
>you have to worry about directly. All you need to remember is that
>what Quicken calls "Categories", gnucash calls "accounts", and what
>Quicken calls "Accounts", gnucash also calls accounts :), and
>furthermore, every financial entry has to have a "category" in
>addition to the bank account that it's drawn from.
And that's what I don't get-- with Quicken, it's a transaction that has the
attribute
"car payment" attached to it. I just record having spent, say, $261.01 for
my car
payment, slap the label "car payment" on it, and bob's yer uncle. All of a
sudden,
it seems I just created a "Car Payment" account somewhere that I neither
want, nor
care about. All I need to know is what happened with my checking account.
>Second, keep in mind that Gnucash isn't just "free Quicken".
I know that, but I want to use it for the same things I use Quicken for, so
I'm running into a lot of questions along those lines. I don't want to just
<whine>make it just like Quicken!</whine>, but the desire to do the same sorts
of things with it is what's informing most of my problems.
>It's a
>different program, one that has similar goals but not exactly
>identical, and you have to reconcile yourself to the idea that there
>will be a bit of a learning process while you get used to this new
>piece of software. Just because you are an Adobe Photoshop expert
>doesn't mean you can just open up Illustrator and start working;
>different programs have different paradigms, even if they are
>superficially similar.
Right. And I'm not even remotely close to a Quicken expert. I'm just
trying to say that
it works the way I expect things to, and gnucash doesn't. So I can either
adjust my
expectations (which is what I'm trying to do, as soon as I figure out where
to adjust them
to), or change gnucash, or both (which is really the right answer, I think).
> > * Set the opening balance of my accounts.
> >
> > This is where double-entry bookkeeping rears its ugly head. I don't
> > understand how to say, "This account started off having this much
> > money in it." When I do that, it creates an "Imbalance-USD" account
> > with the opposite amount of money as I just put in my checking and
> > savings accounts.
>
>It's a good question, and one that will be swept under the rug when we
>have a better new-account setup routine. Gnucash (like accountants,
>and normal people like you) understands that there are times when
>money just "appears" from outside the scope of your accounting
>procedures. This type of money is called "Equity". Opening balances
>are generally considered to be transfers from an account called
>"Retained Earnings" which is of type "Equity". If you want, you can
>call the account "Opening Balances", and just think of this as a
>special category for opening balances that doesn't show up on income
>and expense reports. There is a reason it's called Retained Earnings
>by accountants, having to do with the rollup of expenses and income,
>but that won't really affect you if you prefer the name Opening
>Balances.
But how does the money get in this "Retained Earnings" (or Opening Balances,
if I prefer) in the first place? It has to come from somewhere, doesn't
it? It seems
like gnucash wants a closed system of money, where all there ever is is the
money
you start with, and that's it. How do I say "Somebody just gave me
money. I never had
this money before, but it suddenly appeared out of thin air."?
I shudder to think of the questions I'm going to have once my next paycheck
comes in, and
I try to record *that*!
> > Then I go to the Categories tab. It has the exactsame number of
> > transactions as were in my checking QIF file. It wants a GNUCash
> > Account Name. Why? What's this for? I don't get it.
>
>Gnucash calls Quicken Categories "accounts". You need to have an
>Income or Expense account for each Income or Expense category in
>Quicken, and this screen shows how they are related to each other.
Er, why? As far as I'm concerned, it's just "money goes into (or out of)
of my account,
and I put this label on it to remind me what it was. Furthermore, the QIF
file I get from my
bank doesn't have category information in it, as best I can see.
>What you told Gnucash was that you wanted to merge all of your Quicken
>Categories into one called "Random".
But why do I want to do that? They're already recorded in my Checking
account correctly;
why do I need to have their inverses recorded anywhere? As long as my
Checking account
balances, the rest of it can go hang, as far as I care.
> I doubt that was what you wanted
>to do. If you just left the defaults alone, you would have ended up
>with a direct mapping of all your Quicken categories to Gnucash ones
>of the same name.
Except there were no Quicken categories to start with, as best I can figure.
>If you buy food with money from your bank, the amount of Food goes up
>and the amount in Bank goes down.
But why do I care about the amount of Food? I'm not tracking Food, I'm
tracking
money.
>It's really no
>different from the way Quicken presents it to you, except that instead
>of moving money from your bank into your Food expense category you
>move it into your Food expense account.
But Quicken doesn't require me to move money into a category; it just lets
me debit my
bank account by a certain amount, and tag it "food", so I can later say,
"total all the
transactions labeled 'food'" to see how much money I spend on food. This
is vastly simpler
than having to create a new account to keep track of every single kind of
thing I buy.
>BTW, Chris Browne and others have written documentation of all of this
>stuff which is available as on-line help in gnucash. The help in the
>QIF importer has a description of the categories and accounts issue,
>which might be a good place to start if the above isn't helpful.
I spent about two hours getting increasingly frustrated with that
documentation before I wrote
to the list. :) It seems ideally designed for someone with an accounting
background, but for
someone like me, it's all Greek.
-=Eric