how to view total for expenses subaccount

[hendrik at topoi.pooq.com]

On Wed, Oct 29, 2008 at 02:20:28AM +0000, Girard Aquino wrote:
> 
> Mike or Penny Novack wrote:
> > Girard Aquino wrote:
> >
> >> Hi. I need help trying to produce a report for our monthly expenses 
> >> for one of the Expenses subaccounts. I don't have any problems with 
> >> transactions I pay for using my debit/checking account because this 
> >> is easily tracked by Reports>Income&Expense>Cash Flow. My problem is 
> >> with transactions i pay for using my credit card. When iIdownload my 
> >> CC transaction history they all go to liabilities>CC, and I transfer 
> >> the CC transactions to their respective Expenses subaccount such as 
> >> Groceries, Dining, Auto>Gas, etc....
> > Correct --- you "book" the expense as the liability is assumed (date 
> > of the credit card transaction)
> >
> >> Then when I pay for the CC bill for the month, I use my 
> >> checking/debit which lowers my liabilities. But then, I lose track of 
> >> how much of the liability in CC went to what Expenses subaccount.
> >>
> > Why? Can't see how you lose anything here. You are paying off part (or 
> > all) of the liability (credit card debt). At this time there is no 
> > connect to how/why the liability came into existence.
> I see your point there. But I would like to keep track of how much we 
> are spending on each of the Expenses subaccounts (i.e. Groceries) for 
> the current month.

The month in which it is an expense is the month in which you go to the 
grocery store and buy the broccoli.  It is an expense then, regardless 
of whether you pag for it with a credit card, a debit card, a cheque, 
or cash.  So that's the month in which you record it onto the Expense 
account.  That's the moment at shich you incur the debt or reduce your 
assets.  If you are trying to balance your income with your expenses so 
as to remain solvent, that's the moment when you have to decide whether 
you can afford the broccoli; that's the month that the purchase counts 
against your budget.

The advantage of credit cards, from a merchant's point of view is that 
the customer doesn't feel the pain of being short of cash; using the 
card feels a little like free money.  But it still costs you, and if you 
are limiting monthly expenses to a particular amount, it's the decisions 
you make in that month that should be the ones that count.  Otherwise 
you are racking up debts outside of budget control.

If you wait to consider it an expense when you pay the credit card, you 
lose the ability to let the budget limit your expenses.  You're already 
stuck paying it -- based on a decision you made when you weren't really 
considering an expense.

This is the reason I switched to gnucash long ago -- because it could 
record expenses when I actually incurred them, not when I finaly got 
around to paying off my bills.  I had been using an old version of 
Quicken before that, and it always bothered me that expenses were always 
within income -- because anything over budget didn't show up as an 
expense until I actually paid it -- no matter how high the pile of bills 
on my bill pile.  Recording expenses when I actually paid them was 
giving me a false picture of my financial health.

> So while I am able to transfer and therefore 
> categorize the CC transactions into the different Expenses subaccounts, 
> I am not able to track how much of the money from my checking which goes 
> into paying the Liabilities>CC actually goes into what Expenses 
> subaccount. This is because a CC bill of 600, simply shows as a single 
> CC payment from checking into Liabilities>CC. But how much of that 600 
> went into Groceries, Gas, etc... I cannot view (or cannot figure out 
> how, until now) using the reports (Thank you Robert!!!)

It already went into groceries when you bought the broccoli.  That's the 
time it's relevant to the budget.

> >
> >> Or one could say that I lose track of how much of the CC payment went 
> >> to what Expenses subaccount. I was trying to view how much we were 
> >> spending on groceries for the month, but realized the report I 
> >> produced with Reports>Income&Expense>Cash Flow

The cash flew when you got the broccoli.  It's already gone by the time 
you pay the credit card.

> >> was inaccurate because 
> >> of this. Any tips on how to go about this? Thank you.

-- hendrik