Top level account without any type (or file links)

Tue May 15 17:21:12 EDT 2012

At Tue, 15 May 2012 04:43:08 -0700 (PDT) "Dr. Muhammad Masroor Ali" <mmasroorali at cse.buet.ac.bd> wrote:

> 
> Dear Michael,
> Thanks for your answer.
> 
> Perhaps you are carrying it a bit too far. 
> 
> While I plan to use this for the partnership scenario, actually I will have
> to manage three separate entities, each having a number of partners. The
> three entities have some kind of financial dependency among them and the
> intersection of partners among the three entities is non-null.  
> 
> So, I asked for the solution of top level account without any type not for a
> partnership entity, but for rather three moderately dependent partnership
> entities.

Define 'moderately dependent partnership entities' -- I think this is
where your confusion is coming from.  Either you have one partnership
with three branches or you have three partnerships. Period. This
'moderately dependent' business does not really make any sense from a
bookkeeping point of view.

I expect that you simply have 'three separate entities'.  This implies
*three separate files (or databases)*, each with its own set of
accounts.  The fact that some of the various partners are associated
with more than one partnership makes no difference.  Say you have two
part-time jobs, one as an assistant to a plumber and one as a part time
taxi driver.  The plumber and the taxi company pay you separate
paychecks and each keeps their own books and don't share any
accounting. The same thing is happening here. Even though person A is
in partnership Foo and Bar, the two partnerships are separate entities.
Unless these three entities are paying each others bills or sharing
bank accounts, there isn't any good reason to put their *separate*
accounts in one file (or database). And for all sorts of important
accounting reasons (not to mention *legal* [tax] reasons), these
entities should not be sharing bank (or other) accounts.  *Unless* it
really is one partnership with multiple branches or divisions or
something, in which case it is a *single* business and the
'partnerships' are really just divisions or something, like a
General Contractor, that has a Site Preparation Division and a Plumbing
Division and an Electrical Division, etc. -- that is a company that can dig a
cellar hole, lay your pipes and wire your outlets, with separate 'crews'
that do each of the tasks, possibly with some shared personal (like the
backhoe operator also does plumbing).

In fact, what you really want is:

A separate set of books for each partnership.  These would be 'company
books' and will be utilizing the 'business' features.  In addition (and
*optionally*), you would have a separate set of books for each partner
(as an individual).  These would be 'personal books' and won't be
utilizing the 'business' features, unless the individual(s) are also
'sole-proprietorship' (eg some kind of consultant or professional
person, like a lawyer).  The books for each individual partner would be
optional.  I know this *sounds* more complicated, but this is the
correct way to go.  In effect you would be using your computers
operating system (or database system) as the three 'top level type-less
accounts'. Yes, you can't have transactions between these three sets of
books, but that is in fact the proper way to go from an accounting point
of view. If you were doing all this the 'old fashioned way with paper
and pen, you would literally have three 'books' (ledgers), one for each
partnership. With the computer, each set of 'books' is a separate
computer file (or SQL database), rather than a separate bound book of
ledger paper, but in principle the same thing is going on.

> 
> I have already gone through all the materials on partnership accounting I
> could put my hands on. I do not claim that I have become an expert in a
> couple of days, but I am pretty confident that I have now enough knowledge
> to start with and I can find the solutions when a problem arises. And if you
> notice my other post, I asked for your suggestion on a comprehensive article
> or book. I still hope that I will get one.
> 
> At the same time, as I already mentioned, I am in no way an accountant or
> plan to be one. I have got to do this solely for (large) family needs and
> absolutely not my main job. So, I will want to optimize my investment in
> time, efforts and overall gain. 
> 
> But again, is not gnucash both for professionals and non-professionals?
> 
> Regards.
> 
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Robert Heller             -- 978-544-6933 / heller at deepsoft.com
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