Combined Personal plus Businesses in same file

[Mike or Penny Novack]

Dave,

    I'll try to address this point by point.

>
> Assume you have a small set (four or five) of (legally/taxably 
> separate) entities that each use an identical chart of accounts. Give 
> each entity a short name and call that name a "tag."
>
> In this situation, there is nothing inherently difficult about letting 
> the separate entities share one chart of accounts (they are all 
> identical anyway) and separating the entities at a higher level by 
> tagging each transaction. Any report can simply filter the 
> transactions by tag and the result is exactly the same as if the 
> entity associated with that tag were the only entity existing in that 
> data.

    You are describing something that would depend upon "share same 
chart of accounts". In general that would NOT be true of any two 
business entities and would certainly be untrue between any sort of 
business entity and personal books. Even where exactly the same sort of  
business entity (and this might apply to your situation, say rental 
property A and rental property B) where there would be a very close 
correspondence, there would be differences.

    Example: You have to replace the furnace in unit A. That creates a 
fixed asset account with a date of acquisition (so you can handle the 
depreciation of that asset -- purchase of the asset isn't an expense, 
it's depreciation is). You may or may not ever have to replace the 
furnace in unit B, but even if you did, unlikely to be the same date!

>
> The difference is one of convenience. All the transactions from all 
> the entities (in this small set) are available (i.e., new txns can be 
> entered, existing can be reviewed or modified) simultaneously. There 
> is no need to close a file (i.e., remove a set of transactions from 
> computer memory) and open another file to continue working with 
> various entities in this small set.

   Locking is at the file level, not the directory level. You could have 
open two instances of GnuCash accessing different files (different 
books) at the same time with both of these on your screen.

> I think multiple hierarchies (as was explained to me by Derek) sounds 
> close to this. However, since I haven't tried it before and since it 
> is not recommended generally, I want to understand it in more detail. 
> I would appreciate it if anyone will discuss with me some of the pros 
> and cons of using multiple hierarchies in one file, in the context I 
> have outlined above. Thanks.

   I think the best way to analyze most of the "accounting" sort of 
questions is to imagine you were keeping the books the old fashioned 
way, pen and ink on paper.
 
   I think also you might want to question what this "other" system does 
or doesn't do. For example, does it check that balance is maintained not 
only for the books as a whole (when entering a transaction) but that the 
books for each "tag" also remain in balance -- which they must if these 
are technically separate entities.

Michael