[GNC] Accounting Modules

[Stephen M. Butler]

On 12/1/18 6:20 PM, Christopher Lam wrote:
> Dear Stephen
>
> Most describe various transaction *types* -


They are also different modules in a business financial package.


> (1) GL ones are regular everyday money movements
> (2) AP/AR transactions are business amounts owed/payable and are 
> already implemented
> (3) FA transactions are multiyear entities whereby a single 
> asset/liability is amortized over time, and are currently handled very 
> much manually. This could be refined as a separate transaction type.
> (4) PAYROLL transactions are, IMHO, simple multisplit transactions 
> whereby the allocations must follow predefined (and customizable) formulas
> (5) POS transactions are simply an input mechanism into the GL, right? 
> Unless you're talking about POS transactions also handle decreasing 
> inventory items and calculating their pricing... this seems out of 
> scope for gnucash which aims to be for personal/sole trader bookkeeping.
>
> I wouldn't know how to handle INVENTORY/PURCHASING ones.
>
> You've forgotten commodities/stock:
> (6) STOCK transactions are simple regular money movements with 
> variably priced commodities, and, IMO, currently gnucash handles them 
> similarly to currencies and it works fairly well... except the 
> FIFO/LIFO asset pricing is rather hard to do.
>
> I'd add another candidate to the list.
>
> (7) BUDGET transactions are virtual transactions - they do NOT move 
> money around in the book, yet, the budget balances may be counted 
> separately and are used to compare GL transactions with the budget ones.
>
> Would you care to add your high-level overview to the wiki?
>
> On Tue, 27 Nov 2018 at 05:37, Stephen M. Butler <kg7je at arrl.net 
> <mailto:kg7je at arrl.net>> wrote:
>
>     I was both excited and dismayed to learn that GnuCash has "Fixed
>     Assets".  Excited because that meant an expansion of capability and
>     dismayed because reading between the lines implied only the
>     setting up
>     of an accounting structure.
>
>     Adding a set of Fixed Asset accounts to the General Ledger system
>     does
>     not make the General Ledger into a Fixed Assets module any more than
>     adding a set of Payroll accounts make the G/L into a payroll system.
>
>     Accounting Modules (at a high level):
>
>     1.  General Ledger (G/L).  The module that allows a user to
>     maintain a
>     set of accounting books electronically using generally accepted
>     accounting practices.  This module is also the recipient of JVs
>     (Journal
>     Vouchers) from other financial systems.  Primary purpose is to
>     produce a
>     Balance Sheet (under various names) and an Income Statement (also
>     having
>     aliases).  It maintains information at a summary level
>
>     2.  Accounts Payable (A/P).  This module tracks to whom, how much,
>     and
>     when payments are due.  It should sent a multi-line JV to the
>     G/L.  This
>     module must track names and addresses and other information that a
>     G/L
>     does not need (and shouldn't have to worry about).
>
>     3.  Accounts Receivable (A/R).  This module tracks from whom, how
>     much,
>     and when payments should be received.  It also should sent a
>     multi-line
>     JV to the G/L.  It also tracks names, addresses, and other
>     information
>     that a G/L should ignore.
>
>     4.  Fixed Assets (F/A).  This module tracks the assets of the company
>     that have a relative long life. (Not inventory that has a short shelf
>     life).  It also knows about depreciation schedules and the past,
>     present, and potential future value of each asset including the
>     depreciation amount, etc.  It also sends a multi-line JV to G/L.  And
>     again, G/L should ignore a lot of the details involved in Fixed
>     Assets.
>
>     5.  Payroll (P/R).  This tracks employees, how much they are paid,
>     what
>     deductions to take out of their pay, how often they are paid along
>     with
>     the accrual of certain benefits (sick leave, vacation bank, etc).  It
>     also prepares certain tax related reports for various governing
>     bodies.
>     This is one of, if not the, most complicated financial module.  It
>     also
>     sends a multi-line JV to G/L.  Generally it prints its own set of
>     checks
>     but I've heard of cases where it sends that information over to A/P
>     (overloads A/P in my opinion).
>
>     Then there follow other financial modules that may be beneficial
>     to some
>     entities:
>
>     6.  Inventory.  This tracks certain transitory assets and has
>     reorder-points, vendors (from whom to order), clients (who can buy
>     and
>     purchase levels).  It also talks to G/L and other systems (A/P, A/R).
>
>     7.  Purchasing.  May be part of inventory or some systems make
>     inventory
>     part of purchasing.  Ideally they talk to each other and this handles
>     the issuing of the PO (purchase order) to ensure inventory levels are
>     maintained.  It may interface with F/A when the company needs to
>     purchase additional (or replacement) items for long-term
>     retention.  It
>     also needs to handle items that are directly expensed and not
>     recorded
>     in inventory nor F/A.
>
>     8.  Point-of-Sale (POS).  I've not done one of these -- it might
>     be more
>     complicated then payroll (which I have designed and built)!
>
>     So, why was I excited?  Its always nice to see an application
>     expand and
>     tackle additional arenas.
>
>     Why dismay then?  It takes a lot of resources to maintain each one of
>     the above modules.  It is better to pick one module and make it
>     the best
>     one available ("hit a home run", "gold standard", etc) than to be
>     mediocre in several ("never get on base" -- even on fouls).
>
>
>     So, what are my credentials?  I've seen that one of the Davids on
>     this
>     forum was a physicist in a prior career and retired as an accountant.
>     Here is my story:
>
>     I was born (I do wonder about some folks if they have even begun to
>     live) midway through the last century (makes me feel even older
>     admitting that).  Graduated with a BS in Chemistry (though I have
>     more
>     credits in math) and minors in Physics and Religion.  I took every
>     computer class the college offered -- including Numerical
>     Analysis.  It
>     wasn't much but enough to impress the recruiter from a hospital. 
>     So, I
>     began my post graduation career as a programmer in the now ancient
>     language of COBOL on a 6-bit computer (Honeywell 115-Mod1) with
>     32K of
>     core (real core) based on 556 bpi 7 track tape.  Oh, it did have a
>     10 MB
>     disk drive.  That was the summer of 1975.
>
>     Graduated to an HP-3000 in 1978 (still COBOL) with gobs of disk,
>     9-track
>     tape, and a two-level network database system called Image. My phone
>     has more RAM than all those disk drives held! But now I was an
>     analyst
>     and data modeler.  Spent time at Weyerhaeuser ('81-'84) with their
>     database group brushing up on database theory (CJ Date book).
>     Moved on
>     to consulting work ('85-'90) (built property tax receipting system,
>     utility billing, permits, etc).  Then spent time with newsprint
>     distribution for The Seattle Times ('91-'96).  They sent me off to
>     become an Oracle DBA ('93) but didn't have a full-time position as
>     such.  So I moved on (July '96) and did DBA (database administration)
>     for Washington State's largest PPO (Preferred Provider Organization).
>     Learned a lot about processing/pricing/adjudicating medical claims
>     and
>     ended up designing the data model for their new systems.
>
>     Became an I.T. Manager (2007) for that company and managed two
>     development teams plus the DBA (and was the only Korn Shell writer in
>     the company).  Picked up my PMP (Project Management Professional)
>     certification in 2011 and promptly retired in February 2017.
>
>     So, I have over 40 years working with computers.  Mostly with those
>     ancient languages (BASIC, Fortran, COBOL, some Pascal) and some
>     assembly
>     language/machine language exposure (PDP 11/20, ASM, PAL, PSL) and
>     database transaction languages (Transact, PL/SQL,, Oracle's flavor of
>     SQL).  But woefully lacking in web and modern day (C, C++, C#,
>     Scheme --
>     I did read the book last week).
>
>     Took time this past year to relax, work on the new property, enjoy
>     the
>     grandkids and how I had time to go to work all those years.
>
>     Well, the greenhouse is built, summer is over, the rains have set
>     in and
>     I did promise to figure this language called Scheme out enough to get
>     the basic reports formatted to my wife's demanding specifications.
>
>     Her qualifications?  MEd secondary education for Business Education.
>     Took some additional Accounting courses and spend the last 21 years
>     doing accounting for an architect.  Mostly assisted living facilities
>     but also churches around the world.
>
>     So, when I get stuck on which side of the T account the
>     credits/debits
>     go (and when the default value is negative/positive -- and yes, I
>     know
>     that both debits and credits can hold both negative and positive
>     values
>     for the same account so looking at the sign doesn't tell you to which
>     side it belongs -- it is a really strong hint though) I have an
>     in-house
>     reference that accepts voice input (not Alexei nor Echo!) and
>     generally
>     responds rather quickly.  Failing that, I contact my daughter who has
>     her AA in accounting (she specializes in payroll).
>
>     Now, it's time for me to roll up my sleeves and get my hands dirty in
>     this thing called Scheme.  It looks to me that there are just a
>     couple
>     developers holding down the fort here.  And that is way too little to
>     try to make GNC anything more than a good G/L system. Hopefully by
>     spring I'll have my thousand hours in and be able to contribute.
>
>     Yes, I've noticed that the brain muscle has atrophied along with the
>     knees and other items since retirement.  I think I can still whip
>     out a
>     data model (ER diagram) but the detailed syntax to create that in an
>     Oracle database -- well, for the last 10 years I had a DBA to whom I
>     could assign that task!
>
>     Oh yes, C is on the bucket list,  I'll have to Scheme my way to it.
>
>     -- 
>     Stephen M Butler, PMP, PSM
>     Stephen.M.Butler51 at gmail.com <mailto:Stephen.M.Butler51 at gmail.com>
>     kg7je at arrl.net <mailto:kg7je at arrl.net>
>     253-350-0166
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-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8