[GNC] Closing Books - Pros & Cons

Stephen M. Butler Stephen.M.Butler51 at gmail.com
Mon Jan 3 18:07:44 EST 2022


On 1/3/22 14:23, Adrien Monteleone wrote:
> The list archive is littered with such questions and answers.
>
> I'm not sure if anyone put any definitive Pro-Con write up together.
>
> The short answer is, you don't ever *need* to close because you don't 
> *need* to reset your CoA.
>
> GnuCash dutifully reports both 'from the beginning' and 'this 
> year/period' just fine without doing so. (there are selectable columns 
> on the CoA tab to do just that)
>
> All reports default to 'this year' unless you've saved customized 
> reports otherwise. (the exception being the Balance Sheet, which is 
> always in any software 'since the beginning')
>
> This saves you the need to make closing and then reversing entries 
> each year. (and if you use the Business Features, you'll have to 
> manually do your accrual transactions)
>
> By not closing, you can run reports that cross annual boundaries with 
> no issues should you ever find the utility in doing so.
>
> If you do close, your P&L will be zero afterwards for that prior year. 
> (because the closing entries zero out all expenses and revenue to 
> equity as of the last day of the year.)

Not in my experience.  The P&L knows about the closing entries and will 
ignore them (unless you tell it not to).

>
> So you'd have to run that report, save a copy, then close, then 
> ideally save a backup of your file, then continue on. By not closing, 
> you just continue on. You can run that report at any time with the 
> same accuracy.
>
> If you ever need to re-run that P&L (say after making edits or 
> adjustments) you'd have to do so from within that backup copy, or else 
> delete/reverse the closing entries, and go from there.

I've been known to delete the closing entries (just 2 transactions), 
make a change, and re-close.  It is a pain but if your wife is an 
accountant you mirror paper as much as possible!

>
> In short, whatever the reason for having to 'close' in the past due to 
> the limitations of number of pages in a physical book, or for 
> organizational purposes relating to that, computers don't require the 
> same. You can just keep going, and going, and going.
>
> Personally, I don't close. I have no compelling reason to add work for 
> myself or complicate my accounting life.
>
> Regards,
> Adrien

I do close.  Personal preference (so my spouse informs me).  YMMV

--Steve

-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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