Closing books

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Closing books

denisbkk
Hi, just wondering how you guys are closing books at the end of the year. I
have been using GnuCash for the first year now and will continue doing so.

Apparently there are a couple ways to do it besides the "closing books"
function in GnuCash that I read about here:

http://www.gssezisoft.com/main/index.php/2011/08/22/gnucash-and-end-of-year/

To me, I probably would prefer starting on a blank accounts list but I
assume there must be a good reason when using the close books function in
GnuCash that all the transactions stay in the same file.

Can somebody enlighten me to what is the bes way to do it? Any
disadvantages to creating a new file for 2013?
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Re: Closing books

am65
I have always used the GnuCash "Close book" functionality. I can't imagine having each year in a different file. Then I guess I would have to enter manually the balance of the assets and liabilities accounts manually every new year. It doesn't make sense to me. I'm also using MySQL as storage, it doesn't make sense to have different database for each year.

The approach I use when closing books is to close both the income and expenses accounts to the same account (Equity:Profits:Profit 2012) and this way I never had problems with imbalances I have many times read in this forum.

When I have to add a transaction to a closed year, for example unexpected tax returns, then I just make a new transaction from the "Equity:Profits:Profit 20XX" account to the bank account and this transaction doesn't affect the profit current year.
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Re: Closing books

randix
In reply to this post by denisbkk
I'd be curious to hear what others are doing, also.  Problem with creating a new file for each year, you'd lose the functionality of running multiple year reports and all of the auto-fill info for transactions...
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Re: Closing books

Jay Ridgley
On 01/03/2013 06:16 AM, Steve wrote:

> I'd be curious to hear what others are doing, also.  Problem with creating a
> new file for each year, you'd lose the functionality of running multiple
> year reports and all of the auto-fill info for transactions...
>
>
>
> --
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Steve,

  Rightly or wrongly (I am not an accountant), each year I run a Close Book task
with a date of 01/01/yyyy. After being sure I have entered ALL the transactions
for the year.

I quit gnucash, make a copy of the file, and then start gnucash and run my
year-end reports (Income Statement and Balance Sheet). Then I run Close Book
with a date of 01/01/yyyy (where yyyy is the current year). I use
Equity:Increased Equity YYYY as the account

The transaction creates an entry the zeros the expenses and income. The data
remains and is viewable.

I have not noticed any problems for the past three years I have been using
gnucash. I am NOT an authority, so I do not claim what I am doing is correct.
You make your own decision...

Cheers,
Jay
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Re: Closing books

Alexander Engelhardt
I am opening a completely new file for 2013, just because I have so many
(now empty) accounts of stocks I don't own anymore, and bank accounts
that I've moved away from.
I don't like seeing all that empty, now unused accounts in my overview,
so I prefer starting from scratch.

If I would delete the accounts, a lot of transactions would end up in
"Inbalance" or "Orphan", and I don't like this either.

As far as I understand it, this is the best way out I have.


On 01/03/2013 06:16 AM, Steve wrote:
> I'd be curious to hear what others are doing, also.  Problem with
> creating a
> new file for each year, you'd lose the functionality of running multiple
> year reports and all of the auto-fill info for transactions...


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Re: Closing books

Colin Law-4
On 3 January 2013 15:32, Alexander Engelhardt <[hidden email]> wrote:

> I am opening a completely new file for 2013, just because I have so many
> (now empty) accounts of stocks I don't own anymore, and bank accounts that
> I've moved away from.
> I don't like seeing all that empty, now unused accounts in my overview, so I
> prefer starting from scratch.
>
> If I would delete the accounts, a lot of transactions would end up in
> "Inbalance" or "Orphan", and I don't like this either.
>
> As far as I understand it, this is the best way out I have.

Just mark the accounts as hidden, then they will not normally be visible.

Colin

>
>
>
> On 01/03/2013 06:16 AM, Steve wrote:
>>
>> I'd be curious to hear what others are doing, also.  Problem with
>> creating a
>> new file for each year, you'd lose the functionality of running multiple
>> year reports and all of the auto-fill info for transactions...
>
>
>
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Re: Closing books

Arne Hanssen
In reply to this post by Jay Ridgley
Den 03. jan. 2013 16:19, skrev Jay Ridgley:

> On 01/03/2013 06:16 AM, Steve wrote:
>> I'd be curious to hear what others are doing, also.  Problem with
>> creating a
>> new file for each year, you'd lose the functionality of running multiple
>> year reports and all of the auto-fill info for transactions...
>>
>
>   Rightly or wrongly (I am not an accountant), each year I run a Close
> Book task with a date of 01/01/yyyy. After being sure I have entered ALL
> the transactions for the year.
>
> I quit gnucash, make a copy of the file, and then start gnucash and run
> my year-end reports (Income Statement and Balance Sheet). Then I run
> Close Book with a date of 01/01/yyyy (where yyyy is the current year). I
> use Equity:Increased Equity YYYY as the account
>
> The transaction creates an entry the zeros the expenses and income. The
> data remains and is viewable.
>
> I have not noticed any problems for the past three years I have been
> using gnucash. I am NOT an authority, so I do not claim what I am doing
> is correct. You make your own decision...

I've always run Close Book with date of yyyy-12-31, as the last action
for last year.  This keeps all information available and the
transactions created by Close Book does not interfere with report for
last year as you opt to suppress these transactions (I don't know if
this is still needed, but in previous versions one had to use a text on
these transactions which would never be used on "normal" transactions to
filter them out from reports).

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Re: Closing books

Yawar Amin
In reply to this post by denisbkk
This has been discussed quite a few times before. In GnuCash, it's _completely unnecessary_ to close books. GnuCash's reports handle multiple periods smoothly without you needing to needing to mark period transitions in any way.

On 2013-01-02, at 21:27, "denis | dcore" <[hidden email]> wrote:

> Hi, just wondering how you guys are closing books at the end of the year. I
> have been using GnuCash for the first year now and will continue doing so.
>
> Apparently there are a couple ways to do it besides the "closing books"
> function in GnuCash that I read about here:
>
> http://www.gssezisoft.com/main/index.php/2011/08/22/gnucash-and-end-of-year/
>
> To me, I probably would prefer starting on a blank accounts list but I
> assume there must be a good reason when using the close books function in
> GnuCash that all the transactions stay in the same file.
>
> Can somebody enlighten me to what is the bes way to do it? Any
> disadvantages to creating a new file for 2013?
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

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Re: Closing books

Arne Hanssen
Den 05. jan. 2013 22:22, skrev Yawar Amin:
> This has been discussed quite a few times before. In GnuCash, it's _completely unnecessary_ to close books. GnuCash's reports handle multiple periods smoothly without you needing to needing to mark period transitions in any way.
>

Is that a fact?  I have never tested that as I always have closed books.
  From a bookkeeping point of view (sorry for my bad english), closing
books should be the (only) correct procedure as this transfers all
income and costs to an equity account and zeroes all income and cost
account balances, ready for a new year (or whatever period).

As far as I can see (and remember right now), the loss og gain for a
given period is reported as not posted and equity balance is not updated
until i close books.  But if you mean that closing books is unnecessary
when using GC for simple usage where formal correctness is not an issue,
you may be right, or I am missing something?

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Re: Closing books

Yawar Amin
Hi,

On January 6, 2013 12:51:33, Arne Hanssen wrote:

> [...]
> Is that a fact? I have never tested that as I always have closed
> books. From a bookkeeping point of view (sorry for my bad english),
> closing books should be the (only) correct procedure as this transfers
> all income and costs to an equity account and zeroes all income and
> cost account balances, ready for a new year (or whatever period).
>
> As far as I can see (and remember right now), the loss og gain for a
> given period is reported as not posted and equity balance is not
> updated until i close books. But if you mean that closing books is
> unnecessary when using GC for simple usage where formal correctness is
> not an issue, you may be right, or I am missing something?
Closing books is unnecessary for _any_ GnuCash usage. GnuCash takes care
of the `formal correctness' internally when you run reports. So you
should see correct equity, loss, gain etc. when you run reports, without
having to close books. See:

http://article.gmane.org/gmane.comp.gnome.apps.gnucash.user/37385/match=close+books

http://article.gmane.org/gmane.comp.gnome.apps.gnucash.user/44801

Regards,

Yawar



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Re: Closing books

Dean Gibson

On 2013-01-06 18:02, Yawar Amin wrote:
> Hi, [...]
>
> Closing books is unnecessary for _any_ GnuCash usage. GnuCash takes care
> of the `formal correctness' internally when you run reports.

Closing books is necessary if you want the account totals in income &
expense ledgers to reflect YTD balances (as I do).

I've never run a GnuCash report.  No need.

To answer a related question in another thread:  If you close the books
on a year and post the closing transactions to a separate account (I
think that's the only way to do it anyway, but not sure), then if you
want to change any thing in any closed year, just delete the closing
transactions for income & expense (two transactions) in that year, make
whatever changes you want in that year, and then re-close the books for
that year.
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Re: Closing books - budget reports

andersvi
In reply to this post by Yawar Amin
Its great to have everything in one large register, 'close the book' at
year-end and having freshly 0-ed income & expenses for the upcoming
year.

However after doing that and running a budget-report the closing
transactions get included in the budget-report, making totals in the
report worthless.

I see in the close-book tool, theres an option to match the closing
transaction.  Maybe something similar is possible to build into the
budget-report, to ignore the closing-transaction in the report?

Of if anyone knows a budget-report lying around which accomodates this,
please send info.

Thanks,

-anders

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Re: Closing books

Derek Atkins
In reply to this post by Arne Hanssen
Arne Hanssen <[hidden email]> writes:

> Den 05. jan. 2013 22:22, skrev Yawar Amin:
>> This has been discussed quite a few times before. In GnuCash, it's _completely unnecessary_ to close books. GnuCash's reports handle multiple periods smoothly without you needing to needing to mark period transitions in any way.
>>
>
> Is that a fact?  I have never tested that as I always have closed

Yes, it is a fact.  I've never closed my books.

> books. From a bookkeeping point of view (sorry for my bad english),
> closing books should be the (only) correct procedure as this transfers
> all income and costs to an equity account and zeroes all income and
> cost account balances, ready for a new year (or whatever period).
>
> As far as I can see (and remember right now), the loss og gain for a
> given period is reported as not posted and equity balance is not
> updated until i close books.  But if you mean that closing books is
> unnecessary when using GC for simple usage where formal correctness is
> not an issue, you may be right, or I am missing something?

The Balance Sheet and P&L (Income Statement) reports will give you those
values just fine.

-derek
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