Subaccounts [WAS Re: Future allocated money vs Budgets]

Adrien Monteleone adrien.monteleone at gmail.com
Sun Jan 28 13:13:58 EST 2018


David,

Generally yes, the basic math operations in the register are sufficient for most daily needs.

I also agree that an accounting package tracks real transactions.

I don’t agree that an accounting package can’t include features of financial management together with the accounting features so that you don’t have to enter data twice in two separate (or more) pieces of software and so that you can see your entire financial picture in one place. (or have to finagle exports and imports between the two) I see the purpose of accounting is to make financial decisions. Budgeting, savings goals, investment plans and such are all financial decisions that all have real transactions at their base. To me, these are integrally linked and requiring a separation in software packages would be an artificial limitation that just duplicates work and increases the chance of data entry error. (And I don’t mean that anyone presently requires GnuCash to be accounting of past transactions only - the other functionality just isn’t there yet)

Following your line, the business features should be removed because ‘invoicing’, ‘receivables’  and ‘payables’ isn’t ‘accounting’ and that people should use a separate Invoicing-AR/AP management system and export the accounting entries from that package into GnuCash.

With regards to formulas in transactions, I think we can get most of the way there with Template Transactions. I would suspect the code used for Scheduled Transactions would be sufficient with minor tweaks. Instead of these transactions firing on a date stamp, they fire when you tell them to. You might have to fill in one or two of the split amounts, but the rest of the splits would auto calculate based on those entries.

This might also be accomplished with a tweak to the Transfer window code. (As that’s the main need for this purpose anyway) Options could be added to split the transfer amongst multiple accounts with each one being a formula using the first split as a variable. (say a credit to checking with debit splits at 10%, 5%, and 8.3% of that credit to each of three particular sub-accounts of checking)

I also don’t think that most of what’s been discussed here is really budgeting. Budgeting is a spending plan. This isn’t a plan, it’s a way to keep to that plan. In order to do that, one needs to have a savings plan or a way to enforce the spending plan so funds are available for their budgeted purposes. One very effective and proven method of doing so is by segregating funds either physically or virtually. I can only imagine the trouble one would have to go through to maintain a spreadsheet just for the purpose of segregating funds and having to do double data entry of real transactions to keep both systems current.


Regards,
Adrien

> On Jan 27, 2018, at 11:11 PM, D <sunfish62 at yahoo.com> wrote:
> 
> I'm glad you're going to look at documenting your suggestions in the Tutorial. I imagine they would fit as a special section in the budgets chapter.
> 
> As for the idea of having formulas active in the register, I think that there are a number of issues that need consideration and addressing.
> 
> First, when entering transactions, you already can enter numeric formulas (35/57), and Gnucash will calculate these. If I am entering transactions for real accounting events, then that is all I really need, it seems to me. Calculations with variables would only arise for future, tentative transactions. But entering future, tentative transactions goes counter to the idea that an accounting package tracks real transactions--using real money--rather than potential transactions. This has been where such discussions have foundered in the past on these lists. The scheduled transactions module attempts to finesse this by allowing formulas which are processed separately, and which create real transactions at specified points in time.
> 
> I imagine also that activating variable-based calculations into the register itself would require some serious reprogramming, and I do not know how likely that is to happen. I have read here that the register code is challenging to work with, and that an attempt to update the register has stalled.
> 
> Personally, I have come to believe that budgeting is fundamentally different from accounting, and keep them separate. I use a spreadsheet to track the few areas I choose to budget, and have a report in Gnucash that gives me usage numbers for those areas, which I transfer over manually. Gnucash's budget tools always hurt too much for my brain.
> 
> David
> 
> On January 28, 2018, at 8:27 AM, Matt Graham <matt_graham2001 at hotmail.com> wrote:
> 
> Nice! It seems like we are getting somewhere. I am convinced that the process we think of budgeting where we are saving up for something is really a case of segmenting money within a sub-account. And it looks like Gnucash is already happy with this kind of situation - with the include sub-accounts in the recociliation window.
> 
> I'm going to try this out over the next week or so and then try to contriubute to the Tutorial and concepts guide on it. It can get pretty complicated (for beginners) when you segment the money in your savings acount, and then want to spend out of cash/checking etc. Is a pretty common thing that people want out of Gnucash.
> 
> After trying it, I'll also be in a position to suggest any feature changes that would make it easier. Hinted already by others is the feature of "formula" based data entry - doing data entry a bit like a spreadsheet, where simple equations can be used often based on the values present in other accounts/transactions... I'll leave that for now and explore it in my next big discussion with you all!
> 
> Thanks again - greatly appreciate your time,
> Matt
> 
> 
> -------- Original message --------
> From: Adrien Monteleone <adrien.monteleone at gmail.com>
> Date: 27/1/18 18:15 (GMT+10:00)
> To: GNU Cash User <gnucash-user at gnucash.org>
> Subject: Re: Subaccounts [WAS Re: Future allocated money vs Budgets]
> 
> That’s an interesting use of future dated transactions. Thanks!
> 
> 
> Regards,
> Adrien
> 
>> On Jan 26, 2018, at 5:21 PM, Tommy Trussell <tommy.trussell at gmail.com> wrote:
>> 
>> I was following the budget discussion, and I decided to split my comment
>> into a different thread. I'm not responding to any particular comment, and
>> this isn't quite germane to budgeting.
>> 
>> But I want to clear up a few misunderstandings I'm seeing folks express
>> about reconciling with sub-accounts. Subaccounts work very well, but they
>> do take a little maintenance.
>> 
>> WHEN TO USE SUBACCOUNTS
>> 
>> You can use subaccounts for several purposes, including budgeting, holding
>> onto money that isn't "yours" (a bond you're holding from a contractor for
>> successful completion of a project, for instance), identifying earmarked
>> funds, OR (as in the example below) simply stopping yourself from spending
>> down the account more than you'd like.
>> 
>> (If folks have additional suggested uses for subaccounts, bring em on!)
>> 
>> EXAMPLE: MINIMUM BALANCE VIEW
>> 
>> Here's a real-world (well it's real in MY world) example -- avoiding
>> "minimum balance" fees. The bank name has been changed to protect the
>> bookkeeper. ;-)
>> 
>> I have a checking account at BigBank.
>> 
>> Assets:Current Assets:BigBank Checking
>> 
>> The terms on that bank account say it doesn't cost me anything UNLESS the
>> balance drops below $2500, at which point I have to pay $8.50/month. (There
>> are some other miscellaneous fees, all higher when the balance goes low.)
>> 
>> SO to help avoid the $8.50/month expense, I created a sub account:
>> 
>> Assets:Current Assets:BigBank Checking:Minimum Balance
>> 
>> Then I created a transaction dated 2/15/2015, transferring $2500 from the
>> account to its subaccount:
>> 
>> (This is a representation of the BigBank Checking two-line auto-split
>> register. Items in the right column are "cr" and items in the left column
>> are "dr".)
>> 
>> 2/15/2015 min Minimum Balance   2500.00cr
>>   Assets:Current Assets:BigBank Checking:Minimum Balance   $2500.00dr
>>   Assets:Current Assets:BigBank Checking   $2500.00cr
>> 
>> When I reconciled my account the first time after creating this
>> transaction, I made sure to tick the "Include Subaccounts" checkbox on the
>> Reconcile Information dialog. I (as always) verified the ENDING balance
>> information exactly as it was shown on the bank's statement.
>> 
>> Also that first time I reconciled, I noticed TWO items to clear that
>> weren't actually on the bank statement -- $2500 in the funds in side and
>> $2500 in the funds out side of the reconcile window. I marked them BOTH as
>> "cleared."
>> 
>> From now on, I notice a few things have changed from before --
>> 
>> o - My default balance when I reconcile AND the running balance in the
>> BigBank Checking register will always show $2500 lower than I actually
>> have.
>> 
>> o - When I reconcile I always have to remember to override the default and
>> enter the ENDING balance as it is shown on BigBank's statement.
>> 
>> o - When I reconcile the "Include Subaccounts" checkbox is ticked and it
>> needs to stay ticked. (It seems to "remember" the setting from session to
>> session, as you would hope.)
>> 
>> o - I also notice when I'm reconciling that when I "jump" to a transaction
>> by double-clicking on an item in the funds in / funds out lists, the
>> transaction opens into a different kind of "general ledger" style register
>> that includes ALL transactions in the account and subaccounts. It exactly
>> resembles the kind of register that appears when you search for
>> transactions. It has a "plus" (+) mark in its tab and looks different from
>> the "ordinary" register.
>> 
>> 
>> Obviously at any time I can "overspend" and the primary account balance
>> will go negative, with either dire or negligible real-world repercussions.
>> But if I ignore the red (negative) balance numbers and keep the balances in
>> the red, I've eliminated the reason for having the subaccount in the first
>> place.
>> 
>> I can raise or lower the minumum balance at any time by creating another
>> transaction between the account and subaccount.
>> 
>> 
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