[GNC] Convert credit cards as expenses to credit cards as liabilities?

ornd25 at tutanota.com ornd25 at tutanota.com
Sat Sep 14 12:16:54 EDT 2019



> If you?re going to keep using the simplified method, there?s no point to changing the account type.
>
> #1 you?d lose expense tracking entirely for anything spent via the card.
> #2 credit card liability would forever be ?negative? (meaning they owe you)
>
> The simplified method works as you have been doing it.
>
> The more real-world method is as follows:
>
> -----
> When making a purchase on credit:
>
> Dr. Expenses:(whatever)
> Cr. Liabilities:Credit Card
>
> When making a payment on the card:
>
> Dr. Liabilities:Credit Card
> Cr. Checking
>
> Now you can track what you spent the money on, as well as how much you owe on the card.
>
> ------
>
> With the current method, all you are doing is recording the card payment from checking and no specific expense tracking at all. (even though it is listed as an expense account, you keep increasing it forever as a generic) But an Income Statement will make sense, as will your Balance Sheet
>
> With the switch you are considering, you?d just be doing the second of the above two transactions instead of:
>
> Dr. Expenses:Credit Card
> Cr. Checking
>
> Which would remove expenses entirely and make your liabilities look like assets since they are negative. (because you keep paying more down, without the charge part of the transaction) So both your Income Statement and Balance Sheet would be wrong.
>
> It wouldn?t be hard to switch the historical data, especially since it is just 240 transactions. (which you?ve already noted you don?t mind altering)
>
> That would *maybe* involve changing the account type. You shouldn?t need to alter those 240 transactions, because those splits assigned to the card are still going to be debits. (they were payments, now on a liability which is correct)
>
> If you can?t just change the type, then create the new liability account and then delete the old expense account. When GnuCash asks, choose the liability version to assign the transactions to. In a very worst case, you?d have to do that manually 240 times, but I think it is going to be more automatic than that.
>
> What you would need to do for the card account balance to make sense (and not understate your liabilities) is to also enter 240 expense transactions between the card and ?something?. (you might also do this as annual transactions, or even a single transaction as the sum of everything up to this point)
>
> If you don?t know or don?t care what those historical transactions were for, you could either leave the expenses:card in place and assign them there, or create a ?miscellaneous? account or something similar and then proceed in the future with recording actual expenses paid with the card.
>
> You might also be able to download some of that actual history from your card company if you think you want it. (I doubt all 10 years though)
>
> Regards,
> Adrien
>
>
Thank you, Adrien. We can close this.

I'll try your import idea using my Expenses:Credit Card export as a baseline. First I'll modify it using search and replace for what the Liabilities:Credit Card account should look like with regard to Expenses:Credit Card, then, second, I'll modify the Expenses:Credit Card account to remove the checking account reference - probably I'll just remove all the transactions and allow them to rebuild when I import the Liabilties:Credit Card transaction. Finally, I'll modify the original Expenses:Credit Card transactions to reflect them paid from within the Liabilities:Credit Card account. I'll try all this with the Transaction ID removed. 

If this doesn't work, then I'll fall back to just doing it properly from now on.

I did check my bank's download capability and it's limited to 120 days, though they do have 10 years worth of monthly statements.

Again, thanks.


More information about the gnucash-user mailing list