Never create transactions form Income to Bank nor Bank to Expenses!

[Raphaël Maville]

Sorry, I forgot that most people use gnucash only for personal
accounting! In this case, perhaps the method I exposed is not needed!

I use gnucash for both my personal and my professional accounting: In my
country, I am in the category of "independent workers": I am my own
employer.
For Income, I do not receive paychecks at all: I receive money in cash,
checks, credit cards and "paying thirds". I must write them in my books
when received (it is the usage), that mean before the bank clear or
reconcile; the dates are not the same.
The best method I had found with gnucash is to use asset accounts,
placed between income and bank account.

For Expenses, I have to schedule all the transactions that an employer
should schedule: social security, social contribution, pension, taxes,
and the professional expenses; I must write them when owe (it is also
the usage), that mean when known, and often before they are paid.
Here too, the best solution I have found is equivalent that for income:
I use liability accounts to write them by advance.

Like this, I can know all the time at what point are my accounts:
income, expenses, asset, liability and balance!

I did not find another software like gnucash to do this: all the other
ones, including not free, are not able to do that: they worry only about
bank accounts; They include only three types of accounts (income,
expense and asset "bank") in one word, they are copies of the
"statements" sheet I receive from banks: They are useless and I do not
use them: a spreadsheet or a paper book register ("ledger") are better!


With the good hierarchy of accounts, and the good selection of accounts
in reports, It is possible to follow both personal and professional
accounts; I encountered only one problem: the accounting hierarchy of my
professional accounts follow the accounting hierarchy of the usage of
the "accounting association", which differ from the fiscal hierarchy: I
did not know how to report it; but I did not explore the checkbox
"taxable" of the gnucash accounts...

Thanks.


Le lundi 22 décembre 2008 à 13:53 -0500, John & Mary Linge a écrit :
> This makes no sense at all to me. I use GnuCash for my personal
> accounting. All of my income goes directly into the bank, except for
> deductions, which are all expenses. When I buy something, it comes
> directly from the bank if I use a check or debit card. Any unpaid
> debts I have incurred are liabilities. Any unpaid debts owed to me are
> assets. Why complicate accounting for personal use? I couldn't care
> less if all the dates match.
> 
> On Sun, Dec 21, 2008 at 6:39 PM, Raphaël Maville <rafmav at wanadoo.fr>
> wrote:
>         Never create transactions form Income to Bank nor Bank to
>         Expenses:
>         always use transactions from Income to A/Receivable and
>         A/Payable to
>         Expenses instead!
>         
>         Well, this is not really a question, but a personal
>         observation of how
>         to use gnucash to follow accounts:
>         
>         This e-mail follows the ones I posted in December, and the
>         answers:
>         1. Where in GnuCash have we to write the unpaid (depts) ?
>         2. Managing dates for each transaction : date of record in the
>         register,
>         date of reconciliation, date of bank record in register, date
>         of bank
>         value
>         
>         
>         What about if I use gnucash like this:
>         
>         BAD AND NEVER: Income  ---> Bank ---> Expenses
>         FORBIDDEN: Income  ---> Bank
>         FORBIDDEN: Bank ---> Expenses
>         
>         GOOD: Income ---> Asset (A/Receivable) ---> Bank --->
>         Liability
>         WHEN KNOWN: Income ---> Asset (A/Receivable)
>         ONLY WHEN BANK VALUE: Asset (A/Receivable) ---> Bank
>         ONLY WHEN BANK VALUE: Bank ---> Liability
>         WHEN KNOWN: (A/Payable) ---> Expenses
>         
>         And never create BAD transactions at all!
>         
>         The only default:
>         - This increase the number of accounts and the number of
>         transactions:
>         but with the schedule transactions, it is easy;
>         
>         
>         Some problems are solved with that:
>         - Another field of date in the transaction structure is not
>         need: the
>         date of record in register is the date of the transaction from
>         Income to
>         A/Receivable; I do not change it after created;
>         - the date of bank value is the date of the transaction from
>         A/Receivable to Bank;
>         - the date of Bank record in their own register is not needed
>         (it is the
>         bank problem);
>         - date of reconciliation is the date of reconciliation, no
>         more, no
>         less.
>         - unpaid do not appear in the bank accounts (exception: the
>         bank could
>         ask some amount of money for a rejected "rubber" check: in
>         this case,
>         there is no income for the check, but only a "liability", and
>         then an
>         "expense")
>         
>         If bank statements come from internet, we do not have to touch
>         at all
>         the bank account, except to tell gnucash the "target" accounts
>         for
>         double entry and to reconcile.
>         
>         
>         Finally, gnucash is call "double entry" because the all
>         transaction
>         implies at least two accounts; I could add that with gnucash I
>         can
>         follow my accounts on "double entry": income-expense, and
>         asset-liability !
>         
>         Opinion ?
>         
>         
>         
>         
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