[GNC] How should I enter values on a budget in gnucash ?

[Christopher Lam]

On Sat, 2 Nov 2019 at 11:33, Jim Passmore <jim at passmore4.com> wrote:

> TL;DR--Summary lines are good, but poorly named.  keep them.
>
> Regarding the summary lines, as already said Income and Expense totals are
> self-explanatory.  I'll try to explain a use-case for the other lines.
>
> First of all, let's ignore the "transfers" part for a bit.  When I do a
> budget, I'm concerned about inflows and outflows, and I do it all with
> respect to my operating account (a personal checking account).  In spite of
> the double-entry approach to accounting, I don't fill in expected entries
> to the operating account--just the budgeted income and expenses.  Then you
> can look at the totals to determine if your expected income will cover your
> expenses and make decisions to adjust the budget (or at least maybe you're
> willing for the account balance to decrease by the expense overage for that
> budget period).  Having a "Total" of Income-Expenses does the math for you,
> and helps you determine how much more you can plan to spend, or how much
> more income you need, etc.
>
> So now let's consider the "Transfers" line.  If I want to budget some cash
> to go into a savings account, I would enter the transfer amount into the
> Asset account, and the end result to my operating account balance is
> exactly the same as an expense--the balance goes down.  Same thing applies
> to paying down a liability--it's not an Expense in the strict accounting
> sense, but it's an outflow from the operating account.  After you collect
> these, treating them the same as expenses in the "Total" line (i.e.,
> subtracting them, currently) is appropriate.
>
> I have no idea on a use-case for budgeting changes to equity.
>
> As for the names "Total" and "Transfers":
> As it operates currently, "Total" is a poor name; "Difference" would be
> more accurate.  However, if you change the sign-reversal treatment you may
> have positive income, negative expenses, and "Total" would be an accurate
> choice.
>
> Transfers--isn't everything in double-entry accounting a transfer?  :-)
>
> Just totaling the Income/Expense/etc. would force the budgeter to do the
> math for each period.  Having some sort of net at the bottom is very good.
> Maybe call it "Net Budgeted Cash Flow"?  After all, I'm describing a
> planned cash flow.
>
> Hope this made sense.
>

Actually no.

I'm keen to hear feedback with real-world data from real users.

C