[GNC] How to record 'balancing' trnsactions?

[David Carlson]

I would make a couple of suggestions about the physical challenge of
keeping more than one set of GnuCash books on a given computer.  Books can
be separated as you prefer,  possibly either by accounting groups or by
date intervals.

1. GnuCash is designed with some configuration features linked to a given
set of books, and some linked to the user.  Reports, for the most part, are
linked to the user, but can be configured (and titled) as relating to a
certain group of accounts.  Features linked to the user are necessarily the
same for every set of books kept for that user on that computer.  To
completely isolate one set of accounts from another, it helps tremendously
if they are kept on separate computers or under different usernames if on
the same physical computer or on the same network resource.

2.  For more information about what configuration information is kept
where, see <https://wiki.gnucash.org/wiki/Backup> .  That will also be a
good starting place to learn about making backups.

3.  I know that I, for one, have more than once opened a different set of
books, probably to look up a transaction from the past to see how it was
entered, then forgotten that I was in the wrong set of books and started
entering new transactions that should have gone elsewhere.  This could be
even more confusing if some accounts have the same name in different sets
of books.

4.  Today, computers are cheap, you can have one in a green case and one in
a red case.  Then, you can even buy several USB memory keys or external
drives in different colors to use for making rotating backups.

On Wed, Jul 12, 2023 at 5:13 PM David Cousens <davidcousens49 at gmail.com>
wrote:

> Chris,
>
> The normal transaction when you receive funds into an account set of books
> will
> be an increase in an Income revenue account (credit) and a debit to a bank
> (asset) account. When you withdraw the funds to transfer them to the other
> set
> of books you have to reverse both these transaction (suitable annotated)
> and
> then make corresponding entries to receive the funds in the set of books
> which
> holds the account you are transferring it to.
>
> To make it clear I would create an  Income/Revenue sub account against
> which to
> record the funds received which are to be transferred to the other account
> in
> the other set of books.  When you receive the funds you credit this
> account and
> debit the bank account. When you transfer the funds to the other account
> debit
> the income account and credit the asset account. In the other set of books
> debit
> the bank account and credit the appropriate Income/revenue account in that
> second set of books.
>
> This also gives some record that you have transferred all the appropriate
> funds
> to the other set of accounts as the balance of that Interest sub account
> should
> be zero. Another alternative would be to credit the main Income account
> when
> receiving the funds and have a sub account which is a contra account (sub
> account with only reversed entries) which you debit when you transfer the
> funds
> to the second set of books with corresponding credit to the bank account.
>
> You could also have a corresponding sub-account of the bank account which
> you
> would debit on receiving the funds for the other set of books and credit on
> transfer of the funds to the other set of books. GnuCash can reconcile an
> account and its sub-accounts (an option in the reconciliation dialogue).
>
> Main thing will be clear annotation of the corresponding transactions so
> their
> purpose is clear.
>
> The only other consideration will be any regulations for non-profits which
> may
> affect how you can record such transactions. Only an accountant in your
> jurisdiction can advise you. Anything here is of course generic and not
> adjusted
> for any regulations you may need to follow.
>
> David Cousens
>
>
> On Wed, 2023-07-12 at 22:13 +0100, Chris Green wrote:
> > On Wed, Jul 12, 2023 at 04:56:23PM -0400, Michael or Penny Novack wrote:
> > > On 7/12/2023 8:12 AM, Chris Green wrote:
> > > > This is as much an accounting question as a GnuCash one but how one
> > > > does this depends on the sofware's capabilities so it makes sense
> > > > to ask here.
> > > >
> > > > Our church has two main accounts (as in places where money is kept),
> a
> > > > current account at a bank, and a 'building fund' kept in a building
> > > > society savings account.
> > > >
> > > > I run two separate instances of GnuCash, one for the current account
> > > > and one for the building fund.  Both of these are run on a 'cash
> > > > accounting' basis so the balances in GnuCash exactly match the
> > > > statements from the bank and building society.
> > >
> > > Let's assume that there is a good reason to have separate books << I
> can
> > > think of a number* -- keep in mind that I was treasurer of several
> > > organizations >> In other words, there might be no good reason for
> this
> > > church but might for another.
> > >
> > > a) Yes, there can be errors going between the books. So you want to
> > > minimize the number of between the books transactions. See if there
> > > could be a transfer only of "net" every so often
> > >
> > > b) You will need to use some thought for the accounts you will want to
> > > contain parts of transactions that pertain to the other entity.
> > >
> > >
> > > Michael D Novack
> > >
> > >
> > >
> > > * For example, a quasi independent org/fund is legally under a parent
> > > 501(3)3. The treasurer of the org/fund has to report certain things to
> > > the treasurer of the 501(c)3 and there may actually also be money
> > > transferred between them (they may be collecting money on each other's
> > > behalf and making payments on each other's behalf. But do you not see
> > > that no matter how many such transactions in a month need only one
> money
> > > transfer between them and one report per month (assuming getting
> things
> > > right between these entities once a month)
> > >
> > Thank you, you have described the issue exactly! :-)
> >
> > It's your b) that prompted me to ask the question, do you (or anyone)
> > have any good insights into how to handle this?  Whether or not this
> > is done with only one GnuCash instance or with two the difficulty is
> > still there as I see it.
> >
>
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-- 
David Carlson