Profit-centre accounting?

[Mike or Penny Novack]

On 2/5/2015 4:35 AM, Jan Steinman wrote:
> I want to set up top-level accounts that can have a mixture of expense and income accounts underneath. This is often called "profit-centre accounting." Apparently, GnuCash won't let me. (I thought I could if I made the top level a "cash" account.)
>
> The business has a number of separate business units that have both expenses and income. I really don't want to keep them in separate files, as transactions flow between them.
>
> QuickBooks couldn't do this, either, and I resorted to using "classes" in order to sorta run trial balances and P&Ls for the various profit centres, but it was a painful kludge, subject to error.
>
> Any thoughts on how best to set this up in GC?
>
Yes as far as income and expense accounts are concerned.

All you have to do is go back to the earlier concept that both income 
and expense accounts are both temporary accounts of fundamental type 
equity. The only difference between them is that income accounts are the 
ones that normally have a credit balance and expense accounts the ones 
that normally have a debit balance.

In other words, pick EITHER (let's say you pick "income"). You probably 
will want to turn off the "user friendly" column titles going back to 
the old fashioned "debit" and "credit".

So for project one, under "Income" you have a placeholder account 
"project one revenues" and under that two placeholder accounts "project 
one income" and "project one expenses" (account of type INCOME). Under 
each of these you put the accounts for the different project one income 
and expenses respectively. Remember, even though defined as type income 
the latter WILL be expenses because your transactions there will be 
debits (equivalent to a negative income amount).

Is that enough help? << BTW. this would have worked under QuickBooks too >>

Michael D Novack