Farmer Question

[jeffrey black]

On 1/9/2018 5:14 PM, James Meade wrote:
> I've used Quicken for years and am considering switching to gnucash 
> mainly because Quicken is going to a subscription pay model and I 
> don't want to be held hostage by it or by an operating system (I 
> always have in the back of my mind to swithc from Windows to Linux).  
> I know little of accounting.  In reading the manuals, I have a number 
> of questions about setting up the gnucash system.
>

First export your data from Quicken, then import it into a new GnuCash 
file.  Their are several links you can google on how to do this.  Once 
that is done then you can see your real account structure.  I 
discovered, when I changed from Quicken, that I had wrong categories 
going back 20+ years.  Plus I am tired of buying new versions of Quicken 
every 3 years, and a new version of Windoze just because Micro$oft says so.

I would recommend that you do both Quicken and GnuCash simultaneously 
for at least a month just to learn the difference. Then make your 
decision between a pay as you go Windoze setup, or GnuCash.  GnuCash is 
platform independent, so if you make the switch to Unix, so is your 
data.  That's my plan too!

> 1. I have several checking accounts and use them all for both personal 
> and business use.  It seems unfeasible to set up two sets of books.  
> Can/how do I separate personal from business in one set of books?
>

All you need is one file, which is advisable since you intermix business 
and personal usage with multiple checking accounts.  That is the way 
mine is set up.

The separation of business and personal income/expense is easy.  All you 
need is a top level account for each type of transaction ie. personal, 
my farm, aviation, etc.  Then under each of those there would be 
sub-accounts for each type of transaction.  If you pay say for a haircut 
with a check from Bank A.  Then when you post it, select Bank A.  Then 
start filling in the blanks, you debit Bank A $6, you then credit 
Expenses Personal:Haircut $6.  Same for business, each business will 
have it's own list of expense/income accounts.

> 2. I have several credit cards, use them the same way as checking. How 
> do I set up several credit card sub accounts, e.g., notional names AB 
> Visa, CD Mastercard, EF Visa, etc., and separate purchases for 
> business and personal?

You will will have a credit type account for each one.  Select the 
Account tab, then Actions, then Add Account.  I would move them all to 
individual top level account, ie. Personal Credit Card, then change AB 
Visa, CD Mastercard, etc to children of Personal Credit Card.  Same for 
business credit cards, Business Credit Cards:EF Visa.  Posting would be 
same as in Question 1.  Note:  the ":" is a separator between account names.

>
> 3.  I do all my data entry manually and am not going to change.
>

Not a problem, enter all of them you want to by hand.  Electronic entry 
is not mandatory.


> 4. I have several income streams, including farming, flight 
> instruction, writing, custom farming (e.g., mowing or plowing for 
> someone else), military retirement, social security benefits. Some are 
> business and some are personal.  Any thing to consider when I set them 
> up?
>

Nope.  Just set each of them up as income accounts.  Again I would group 
them by type.  ie. Custom farming income:Plowing  Custom farming 
income:hay baling ......  I would create any grandchildren accounts as 
needed for tax line item entry.  If I remember correctly social security 
benefits have to be broken out for taxes.

> As I see it, my main uncertainties are about mixing personal and 
> business and about having a number of different accounts of the same 
> type that are used for both personal and business (i.e., checking and 
> credit cards).
>

Do not worry about it, you did not when you made the purchase or 
income.  You simply post the transaction to the right paying account 
then split the total amount among the other accounts as needed. It's 
similar to Quicken, except you do not open a split window or enter a 
tag.  You split right there in the transaction, the total on the left 
column has to match the right hand column.  Your personal expense 
account may have Expense:Auto:gasoline.  Your farm account may have My 
Farm Expense:gasoline.  They are different expenses as they should be, 
even if you bought them at the same time.  Farm fuel is deductible, your 
joyride gasoline is not.

> It occurs to me that if  I have to ask these questions the prospect of 
> using double-entry bookkeeping may be more than I should attempt.  If 
> you think that is the case feel free to say so.  I'm trying to figure 
> out if I want to go this way.  I tried QuickBooks about 8-10 years ago 
> and gave it up after a couple of months.  I have the time and energy 
> to put in, just not sure if I'm smart enough.
>

Go for it!!!  How can you learn if you do not try?

Double entry is not as hard as you think it is.  It is just takes a 
little bit of time.  Your biggest hurdle will be overcoming the 
checkbook entry mentality.  You are now using a real double accounting 
system that requires you to associate every dollar in everyone of your 
pants pockets to every dollar that goes in or out. You can get to the 
fancy stuff later, like depreciation which is not currently a feature of 
GnuCash, right now you have to figure it by hand.

And don't feel bad, I threw my companies QuickBooks program in the 
dumpster about 30 minutes after I installed it.

JEffrey Black M.B.A.

> Thanks,
>
> Jim
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