suggestions for personal/business accounts new user

[Boyd Kelly]

Hi,

I've been in a Gnucash environment for the last few years, and since Jan 1 have been testing things out with ledger.  I'm not an accountant, but can deal with double entry fairly well.  Previously I've kept two files for personal and business, but wondering if I should put everything in a single file in the ledger world, or use an !nclude statement to bring the business transactions into my personal file to get a full picture. 

Then as a related issue there is the chart of accounts.  I'm setting all my business accounts preceded with Business,  ie Expenses:Business:Auto:Fuel, and the personal stuff is just Expenses:Auto:Fuel.  Is there any best practice here as to what will allow reports that can separate and combine business and personal data?  --  I've been testing some basic commands like ledger bal not business etc.

When having two files in gnucash, if there was a transfer between my business and personal chequing, that would be an Equity:Draw, but if I keep these files together the transfer will just go from Assets:Business:Chequing to Assets:Chequing.  What do accountants think of this?  Also that transfer will have to live in the personal or the business ledger file.  Where should that be?  And then if you separated the files you would throw everything out of whack.  So maybe avoid the !include directive and just keep everything together?  Then I believe I can do an archive at year end.

Regarding investments, in the gnucash world the accounts were typically Assets:Broker:STOCK and Assets:Broker:Cash, but in the ledger documentation most of the examples show the stock purchase of APPL in Assets:Broker (not Assets:Broker:APPL).  Is there going to be any advantage/disadvantage to keeping an actual account for the stock itself?  And same question for the Assets:Broker:Cash account.

While I continue to fiddle around with this...  any suggestions or best practices welcome.

Regards,

Boyd

[Simon Michael]

Hi Boyd,

For the last couple of years, I've had separate personal and work journals. In fact I had (e.g.) personal-2012, work-2012, and work-clientA-2012, work-clientB-2012 etc.

Having each client in its own file was a specific goal, to make it easier to browse all of a client's history at a glance. Dividing by year reduces the data size and helps with speed (for hledger - ledger maybe doesn't care!). Also, it isolates current data from changes in past history, e.g. "harmless" cleanups. If my balances get out of whack I know I only need to debug one year.

I handled "inter-file" transfers just by putting them in one of the files. Other folks put them in both files, as transfers via an imaginary third account (whose balance will remain zero if you are doing it right).  

I had LEDGER_FILE=general-2012.journal, which included all of the above. There's also all.journal, which includes all years.

However, this year I'm back to a single (per-year) journal and loving it. Chasing issues and applying cleanups across multiple files became a pain and not worth it. Fortuitously, ledger-mode recently became able to show a filtered set of entries, which is handy for those client histories (thanks Craig!).

I have a consistent (within each year, at least) set of accounts, independent of the file organization, that cover my personal and business finances. As a sole proprietor in the US, these are fairly closely linked. I learned from my accountant to record my finances from the business' point of view, with my personal expenses under equity:draw:personal. Now, I prefer to write expenses:work:* and expenses:personal:*, which I find more intuitive and easy to enter. If I need to show numbers to my accountant I alias the account names back to her terminology (there's a small example at http://hledger.org/MANUAL.html#account-aliases ). In general I say use any chart of accounts that makes sense to you now, you can always use account name aliases for reports and experimenting, and global search-replace when you see a better organisation.

So it sounds like you're on the right track. I hope this helps a bit. Welcome to *ledger! I also came from Gnucash. I wonder what's the state of Gnucash these days, why you're considering switching, and if you'll still use it for other things.

-Simon

[Boyd Kelly]

 Thanks Russell, Craig, Simon for all these suggestions.  I will definitely try out some of these right away.  

Actually I have been 'aware' of ledger for quite a while.  And I do love the command line.  With the demise of the Google finance API, I was looking back at beancounter which I have also used in the past to look at my investments.  That doesn't seem to work anymore, and my travels took me to ledger.  I just took a second look and decided, this is for me.  One problem with Gnucash/Gnome is that it is tough to access remotely.  I've tried X forwarding. nxserver, vnc, with Gnush on fluxbox instead of Gnome, on Amazon or a home machine and performance is just not acceptable. Windows works much better for remote stuff.  Go figure.....

With ledger/hledger, I can store my data on dropbox, and do my 'accounting' in a terminal via ssh.  Awesome!  I've always been a vi user, but l will also take a look at emacs now.  Looks like this may speed things up further.

I will have a couple of questions going forward, (in fact in a separate post right away) but well on my way now!

Boyd

[Craig Earls]

There is vi support for ledger, but I don't think it is as extensive
as the ledger-mode.

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Craig, Corona De Tucson, AZ
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