How difficult is it (really) to reorganize a Chart-of-Accounts after the fact?

[Patrick Doyle]

On Thu, Jan 1, 2015 at 10:35 AM, Mike or Penny Novack
<stepbystepfarm at mtdata.com> wrote:
> On 1/1/2015 10:03 AM, Patrick Doyle wrote:
>> I mentioned in a previous post (and got some fabulous feedback --
>> thank you very much Lance & John!) that I'm planning on using a bunch
>> of Equity subaccounts to track the "buckets" (or "envelopes") into
>> which I add and withdraw money as I get or spend it.
>
> OOPS -- this and what follows suggests that you should perhaps reread the
> introductory material describing (modern) double entry bookkeeping.
Hi Michael,
Thank you for the feedback.  It wasn't clear to me that using income
and expense accounts would do what I wanted.  It wasn't clear to me
25(ish) years ago when I first set up my accounting system with
Quicken, and it still isn't clear to me now.  (I mentioned in my
previous post that I'm something of an "Old Dog" and have trouble with
"new tricks" :-))

The system I've used for the past 25 years looks like this:
When I receive money, it goes into buckets.  Reading the internet
lately, I've discovered that I'm not the first person to come up with
this idea, except that others call them "envelopes", which is funny,
because I learned the system from watching my parents put money into
(and take money out of) envelopes when they bought a house in 1981.

Anyway, the system looks like this:

I have a bunch of buckets (or envelopes) with names like Food, Car
Maintenance, Christmas, Mortgage, etc...
When I get paid (via direct deposit), I divvy up my paycheck into those buckets.
When I go grocery shopping and buy food with my debit card, I record
that  transaction as a split from checking to the Food bucket.
When I go out to eat and pay for my dinner with my credit card, I
record that account transaction as a split from my Visa account to the
Food bucket.

Once a month, I get a bank statement, which I reconcile with all of
the transactions I recorded in my checking account register.
Once a month, I get a Visa statement, which I reconcile with all of
the transactions I recorded in my Visa account register.
-- reconciliation doesn't care that the money was spent on food, mortgage, etc..

At any point in the month, I can see immediately how much money is in
each of the buckets.
As I mentioned before, the buckets are magic -- sometimes I take more
money out than they hold, but eventually I make that up.

I don't understand how to apply my system to the ideas of Expense and
Income accounts.
I do know how to apply my system to the idea of splitting up my Equity
account into a bunch of subaccounts, one for Food, one for Mortgage,
etc... and recording paycheck deposits into my checking account as a
split between the total amount deposited and the amount going into
each equity subaccount.

I _do_ understand the concept of creating an account called
Expense:Food, and recording splits between my checking or Visa account
and that expense account whenever I make a food purchase.  I suppose I
could create a parallel income account called Income:Food and split
record my paycheck splits into that, separate from my purchase splits
from the other.
If I were to do that, I would want some way to create a report that
gave me the difference between Expense:XXX and Income:XXX for each XXX
that I create.

It just seems easier for me to use Equity:XXX for each bucket, rather
than parallel Expense:XXX and Income:XXX.

But that's part of what started me down this whole track... right now
it seems easier to create the Equity:XXX subaccounts because that
matches what I'm used to seeing, and I understand it.  But what if, 3
months down the road, I finally understand why it is better to have
separate Expense:XXX and Income:XXX accounts, and decide I should
reorganize myself and my accounts around that idea.

In a similar vein, suppose I call all of my accounts Equity:XXX but
later decide that having those letters "Equity:" in front of all of
the bucket names is distracting and I should just name them XXX.
(They would still be Equity accounts).

How difficult would it be to effect these sorts of changes once I've
got more experience with the software?
How important is it that I get everything "perfect" on my first try?

--wpd