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

[Derek Atkins]

Hi James,

Just for the record, I've got transactional data going back to 2005 and
2007 for my business and personal accounts.

-derek

James Thorpe <James at fusionsystems.co.za> writes:

> 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
>
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-- 
       Derek Atkins                 617-623-3745
       derek at ihtfp.com             www.ihtfp.com
       Computer and Internet Security Consultant