The trouble with double-entry...

[Benjamin Carlyle]

On Sun, 2005-02-06 at 11:06 -0600, TC wrote:
> >>another thing I would like to see is the ability to have the 
> >>components of a split transactions have different dates associated with
> >>them.
> > Now, who would be interested in that?
> > Who wants to know when you sat down and wrote a cheque?
> > Why are you writing out cheques anyway? Why don't you transfer the money from 
> > cheque account to credit card on line?  That will make your reconciliations 
> > easier. :-))
> I've *always* wanted this feature, and I don't use cheques.  But even 
> with the fastest available online transfer, money leaves my bank account 
> on a particular day, and doesn't arrive at my credit card until two to 
> five working days later.  (In the "limbo" time, it's being held onto by 
> useless banks and other financial eejits who make money off the interest.)

What's really happening here is that you have a transaction date and a
"cleared" date. There's the date the transaction happened (the date you
triggered it), then there are the individual dates for each transaction
entry to appear in their relevant accounts. Some might equal the
transaction date. Others won't.

> So that causes minor reconciliation annoyances.  Unless I pass the money 
> through a suspense account (and who can be bothered, for the sake of a 
> few days), only one of my two accounts - bank or credit card - can be 
> item by item accurate.  I take the same "who can be bothered" approach 
> witht that too, but let's not pretend that the suggested feature doesn't 
> have a reasonable demand.

I'm not sure the reconciliation process would be simpler with a cleared
date field. After all, you still fill that out and the only time you
-can- fill it out is at reconciliation time. That is, either when you
get your statement or when you check your online statement[1].

So, why would you actually want this feature if it isn't going to help
you reconcile? Well, perhaps you want to be able to go back over things
after reconciliation and see that they still match your piece of paper
statement. Personally, I think that correct use of the reconciled field
in Gnucash voids all use cases for the field and that adding it would
then only complicate the interface. Perhaps someone smarter than I am
could find a use for it, though.

Personally, I think it could only be more confusing. Consider reports.
Do you use the transaction date, or the cleared date? If you use the
cleared date your balance sheet won't balance because it will contain
only parts of the transactions that "straddle" the period boundaries.
How can you compare two periods if a single transaction has effects on
both periods?

I suspect the use of such a field actively harm the utility of any
double entry accounting system... but it is something most new users
expect to see. Perhaps we need a way of breaking them of the idea that
transactions happen when the banks tell them they happen, and work
towards reinforcing the notion that the transaction occurs when you say
it occurs (when it affects you). Reconciliation is then just the means
to ensuring that everyone's accounts of what occurred agree. The
accounts don't have to be identical and will probably not be identical
because everyone has a different perspective.

-- 
Benjamin Carlyle <benjamincarlyle at optusnet.com.au>
[1] Personally, I mark transactions cleared 'c' when I see them on my
on-line statement and reconciled 'R' when I have a piece of paper in my
hands.