[GNC] Why I create a new datafile each year for GnuCash

[James Thorpe]

In another discussion "How to set a customer opening balance for the 
Customer Report" which has been satisfactorily resolved, Derek Atkins 
asked why I am creating a new data file. I did pose the original 
question as if moving from a different system so as to avoid the 
discussion of why I'm creating a new data file but since Derek asked, I 
do in fact create a new data file in GnuCash for each financial year for 
the following reasons-

a) Fear of corrupting previous year's transactions

Once my financials are done for the year and reported on, I do not wish 
to inadvertently enter or modify a historical transaction that will 
result in the same reports producing different results. It is easy in 
GnuCash to enter a transaction with a date for a previous financial year 
or, mistakenly change the date of an existing transaction without 
noticing it.

I enjoy the fact that I have the power to do this but fear making a 
change by mistake

A way to combat this could be to just make a copy of the file at the end 
of each FY as an "archive" file that I use for reporting and/ or 
checking the current file in case there are historical corruptions. In 
combination, I could perhaps also enter a "closing balance" entry on all 
accounts at year end that records the closing balance in the description 
that could then be checked from time to time to ensure all is in order.

b) Size of file / speed of access

I know there have been discussions regarding this but I am concerned 
that with 10+ years of data things will slow down, especially if the 
entire file is read into memory. I like being able to access gnucash 
from low powered machines.

c) Complexities with reports that don't look at date ranges (eg. Trial 
Balance)

Certain reports just look at the final balance in the account - eg. the 
Trial Balance report. This means that if I draw a TB the expenses, 
income etc will report the total for the entire period for which I've 
been using GnuCash. What my accountant wants in my Trail Balance report 
is my total expenses for the year, not forever. I gather that the "Close 
books" function may be able to resolve these issues but have not looked 
into this further.

d) Refinement of my accounting process

Being a complete noob to accounting, I've been slowly improving 
(hopefully) the way I do things from year to year as I learn. As a 
result I may create new accounts and delete others from year to year and 
starting a fresh file each year allows me to have the chart of accounts 
better reflect my latest process. In addition, the entries will be more 
consistent in each file - representing the way I currently process 
transactions.

Having said all of this - there are certainly downsides to creating a 
new file each year as the previous question highlighted. Firstly, the 
business features don't translate well year to year and then, of course, 
it's a labour intensive manual process to set up a new file and get all 
the opening account balances right, re-create the customers, re-set up 
the business information and counters etc.

Hope that sheds some light on my choice and is helpful to others

James