Gnucash 2.4 Small Business Accounting: Beginner's Guide

324 Pages·2011·4.23 MB·English

by  Ashok Ramachandran

Gnucash 2.4 Small Business
Accounting
Beginner's Guide

Manage your accounts with this desktop financial
management application
Ashok Ramachandran
BIRMINGHAM - MUMBAI
Gnucash 2.4 Small Business Accounting
Beginner's Guide
Copyright © 2011 Packt Publishing
All rights reserved. No part of this book may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, without the prior written permission of the
publisher, except in the case of brief quotations embedded in critical articles or reviews.
Every effort has been made in the preparation of this book to ensure the accuracy of the
information presented. However, the information contained in this book is sold without
warranty, either express or implied. Neither the author, nor Packt Publishing, and its dealers
and distributors will be held liable for any damages caused or alleged to be caused directly or
indirectly by this book.
Packt Publishing has endeavored to provide trademark information about all of the
companies and products mentioned in this book by the appropriate use of capitals. However,
Packt Publishing cannot guarantee the accuracy of this information.
First published: February 2011
Production Reference: 1040211
Published by Packt Publishing Ltd.
32 Lincoln Road
Olton
Birmingham, B27 6PA, UK.
ISBN 978-1-849513-86-9
www.packtpub.com
Cover Image by Faiz Fattohi ([email protected])
Credits
Author Editorial Team Leader
Ashok Ramachandran Mithun Sehgal
Reviewers Project Team Leader
Fabrice Estiévenart Priya Mukherji
Christian Stimming
Project Coordinator
Acquisition Editor Jovita Pinto
Usha Iyer
Proofreader
Development Editor Kevin McGowan
Susmita Panda
Graphics
Technical Editor Nilesh R Mohite
Gauri Iyer
Production Coordinator
Indexers Adline Swetha Jesuthas
Tejal Daruwale
Cover Work
Hemangini Bari
Adline Swetha Jesuthas
About the Author
Ashok Ramachandran is a graduate in Mechanical Engineering and has a Masters in
Business Management from the Indian Institute of Technology (IIT) Madras. He started
with an engineering career, including the running of two small businesses, and then made
a mid-career switch to Information Technology (IT). Currently, he is a senior IT executive
in the Washington DC area. His penchant for explaining technology to non-technical
users and interest in writing culminated in this book. For other open source software
suitable for small medium businesses, you can refer to his website http://smb-soft.com.
I would like to thank the open source GnuCash team - the developers, the
documenters, the people who keep the gnucash.org website and related
infrastructure up and running and, especially, the people who answer
user questions tirelessly on the mailing list. I would also like to thank my
technical reviewers, Christian Stimming and Fabrice Estiévenart, for helping
to catch my mistakes and providing valuable suggestions for improving my
text. I would also like to thank the Packt team, especially my Acquisition
Editor Usha Iyer for providing early feedback and channelling my ideas on
the right track as well as my Project Coordinator Jovita Pinto, Development
Editor Susmita Panda, and the Technical Editor Gauri Iyer for all their
painstaking work in getting this book to print.
About the Reviewers
Fabrice Estiévenart is addicted to web and open-source technologies with a specific focus
on web frameworks (Symfony, Pylons, Ruby on Rails), search engines (Lucene, Sphinx, Nutch,
Solr), and database modelisation/abstraction (Doctrine, SQLAlchemy, Active Record). His
favorite programming languages are PHP, Python, and Ruby.
He has initiated or contributed to several open-source projects such as SimPic (a lightweight
PHP photo gallery), DocAlchemy (a 'Doctrine to SQLAlchemy' converter), DocRails (a
'Doctrine to Active Record' converter), CatCash (a rule-based transaction classifier in
GnuCash) and Retroweb (a visual web-wrapping application).
Besides these initiatives, he is the developer and webmaster of several different web sites
ranging from musical news portals (http://www.guitareacoustique.com) to personal
blogs (http://www.destinationlibre.org, http://www.fabrisss.com).
Christian Stimming lives in Hamburg, Germany, working with SICK AG on research and
C++ software development of real-time signal processing for industrial and automotive
sensor applications. He learnt the benefits of Open Source software during his studies in
Electrical Engineering at Hamburg University in the 1990s, started to contribute to the
GnuCash project in 2000, and has been working with the GnuCash developer team since that
time. Recently, he started a consulting business for users of GnuCash, successfully offering
customization and training for small and home-office business customers in Germany. While
reviewing this remarkably helpful book, his third child was born and Christian is happy to
report all is well with his family and the new-born daughter in Hamburg.
www.PacktPub.com
Support files, eBooks, discount offers and more
You might want to visit www.PacktPub.com for support files and downloads related to
your book.
Did you know that Packt offers eBook versions of every book published, with PDF and ePub
files available? You can upgrade to the eBook version at www.PacktPub.com and as a print
book customer, you are entitled to a discount on the eBook copy. Get in touch with us at
[email protected] for more details.
At www.PacktPub.com, you can also read a collection of free technical articles, sign up for a
range of free newsletters and receive exclusive discounts and offers on Packt books and eBooks.
http://PacktLib.PacktPub.com
Do you need instant solutions to your IT questions? PacktLib is Packt's online digital book
library. Here, you can access, read and search across Packt's entire library of books.
Why Subscribe?
‹ Fully searchable across every book published by Packt
‹ Copy and paste, print and bookmark content
‹ On demand and accessible via web browser
Free Access for Packt account holders
If you have an account with Packt at www.PacktPub.com, you can use this to access
PacktLib today and view nine entirely free books. Simply use your login credentials for
immediate access.
Table of Contents
Preface 1
Chapter 1: Getting Started with GnuCash 9
Installing GnuCash on Windows 11
Time for action – installing GnuCash on Windows 11
Other operating systems 13
Other download locations 13
But first, a tip to make your life easier with auto-save 13
Taking the drudgery out of setting up accounts 14
Time for action – creating the default business accounts 14
Account hierarchy 18
Minimal set of accounts 18
Getting your business accounts done just right 21
Time for action – fine tuning business accounts 21
Account types 23
Parent accounts and top level accounts 23
Placeholder account 25
Opening balance 25
How to impress your accountant 26
Strengths and limitations of GnuCash 26
Business as well as personal accounting 27
Single user 27
Sharing a GnuCash accounts file 27
Accounting features not supported by GnuCash 28
Business functions other than accounting 28
Summary 29
Table of Contents
Chapter 2: Transactions – the Lifeblood of a Business 31
A quick and easy way to enter simple transactions 32
Time for action – entering simple transactions quickly and easily 32
Money makes the business world go round 35
Simple transaction 36
Checks and balances are good 36
Entering a simple transaction in the account register 37
Time for action – entering a simple transaction in the account register 38
Navigating the account registers 41
Jump to account 41
Divide and conquer 42
Examples of simple transactions 42
Entering a more complex transaction in the account register 43
Time for action – entering a split transaction in the account register 43
Visualizing split transactions 46
Examples of split transactions 46
Tips for entering split transactions 47
Anybody can change their mind 48
Time for action – editing, cancelling, and deleting transactions 48
Save time by using shortcuts 50
QuickFill 50
Data entry shortcuts 51
Navigation shortcuts 52
Computation shortcuts 52
A feeling of déjà vu 53
Time for action – reusing transactions 53
Changing the register views 54
Deleting a transaction in different views 56
Text information in transactions 56
Transaction description 57
Transaction notes 57
Transaction number 57
Split action 57
Split Memo 57
Summary 58
Chapter 3: Fun and Eye-opening Part - Reports and Charts 59
Viewing standard reports and charts 60
Time for action – viewing standard reports and charts 60
Reports and charts 63
Income Statement (Profit and Loss Statement) 63
Balance Sheet 63
A chart is worth a thousand numbers 63
Other reports 64
[ ii ]
Table of Contents
Creating a custom report and saving it 67
Time for action – creating a custom report and saving it 67
Tips for customizing reports 69
Tips for customizing charts 70
Sample & Custom Reports 71
Working with stylesheets 72
Time for action – working with stylesheets 72
Exporting reports 74
Time for action – exporting reports 75
Summary 77
Chapter 4: How not to Get Lost in the Transactions Jungle 79
How not to get lost while hiking in the wilderness 79
Manual reconciliation 80
Time for action – reconciling with a printed monthly statement 80
Points to note about reconciling 84
Can I edit or delete reconciled transactions? 84
Mark split as unreconciled? 84
Change reconciled split? 85
Delete a transaction with reconciled splits? 86
Electronic reconciliation 87
Time for action – reconciling with a downloaded electronic statement 87
Reconciliation FAQ 91
Income and expense accounts 93
Balancing your cash account 93
Credit card reconciliation 94
Vital point to remember when importing an OFX file 94
Recovering from wrong selection of account 95
Time for action – changing the account to import into 95
Summary 97
Chapter 5: Repetitive Work? Let GnuCash do it 99
Let GnuCash worry about recurring transactions 100
Time for action – creating a recurring transaction from the register 100
A stitch in time saves nine 103
Time for action – triggering scheduled transactions 103
Is it Easter already? 106
Three different scenarios 106
Be cautious like an accountant 107
Tool to create many recurring transactions 108
Time for action – creating scheduled transactions in bulk 108
Schedule a transaction without knowing the amount 113
Scheduled Transactions FAQ 114
[ iii ]