[GNC] Setting up chart of accounts

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[GNC] Setting up chart of accounts

Teresa
I have 25 years experience in Accounting, however never set up a chart
of accounts.

I just started working for my daughter, who has done everything in excel.

I have put all the gl accounts in GnuCash, but they all went in as
parent accounts, I new term to me.

My question is, shouldn't these be child accounts? Also, do I set up a
single of each Equity, Liability and Asset accounts as parent accounts
with the beginning balances, and transfer to the child accounts from there?

Thank you,

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Re: [GNC] Setting up chart of accounts

Bucky Carr

The way I did it was to set up a CoA with 5 parent accounts: Asset,
Equity, Liability, Income and Expenses. I set those as top level
accounts so no transactions can be entered directly into them. Then I
set up all my child accounts under the proper parent accounts. Then I
set up the opening balances in each child account. Depending on the
level of detail I wanted some of the child accounts have child
accounts of their own.

HTH


On 3/7/2019 10:56 AM, Teresa wrote:

> I have 25 years experience in Accounting, however never set up a
> chart of accounts.
>
> I just started working for my daughter, who has done everything in
> excel.
>
> I have put all the gl accounts in GnuCash, but they all went in as
> parent accounts, I new term to me.
>
> My question is, shouldn't these be child accounts? Also, do I set up
> a single of each Equity, Liability and Asset accounts as parent
> accounts with the beginning balances, and transfer to the child
> accounts from there?

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Re: [GNC] Setting up chart of accounts

Derek Atkins-3
In reply to this post by Teresa
Hi,

On Thu, March 7, 2019 12:56 pm, Teresa wrote:
> I have 25 years experience in Accounting, however never set up a chart
> of accounts.
>
> I just started working for my daughter, who has done everything in excel.
>
> I have put all the gl accounts in GnuCash, but they all went in as
> parent accounts, I new term to me.

Have you tried using the default hierarchies that come with GnuCash?
That should get up set up quickly, and then you can add or remove accounts
as needed to customize to your situation.

> My question is, shouldn't these be child accounts? Also, do I set up a
> single of each Equity, Liability and Asset accounts as parent accounts
> with the beginning balances, and transfer to the child accounts from
> there?

Well, consider a simple account hierarchy, Expenses:Groceries.  In this
example, Expenses is a top-level account, and also a parent account.  most
likely it is also a placeholder account (meaning it cannot hold
transactions itself).  The Groceries account is a child of Expenses.

As you probably know, you generally don't set opening balances on Income
and Expense accounts.

In GnuCash, SOP is to transfer from Equity:Opening Balances -> <New
Account> to set up the <New Account> opening balance.  So no, you don't
generally go from Eq:O-B -> Assets -> Assets:Current Assets -> ... etc,
but directly from Eq:O-B to the target.

Hope this helps,

> Thank you,

> Please remember to CC this list on all your replies.
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-derek

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Re: [GNC] Setting up chart of accounts

Mike or Penny Novack-4
In reply to this post by Teresa
On 3/7/2019 12:56 PM, Teresa wrote:

> I have 25 years experience in Accounting, however never set up a chart
> of accounts.
> I just started working for my daughter, who has done everything in excel.
> I have put all the gl accounts in GnuCash, but they all went in as
> parent accounts, I new term to me.
> My question is, shouldn't these be child accounts? Also, do I set up a
> single of each Equity, Liability and Asset accounts as parent accounts
> with the beginning balances, and transfer to the child accounts from
> there?
>
> Thank you,
>

Since you say you are experienced in accounting (but new to gnucash I
think what you are asking is "if I have an account A and I want it to be
a child of account B, how do I do this (in gnucash)?"

Yes?

If so, what you want to do is "edit" account A which will give you a
chance to specify account B is its parent.

Try it where it is easy. For example, under the main parent Assets you
probably want children "current assets" and "fixed assets". Then under
"current assets" you probably want "checking account", "undeposited
cash", etc.

Michael D Novack



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Re: [GNC] Setting up chart of accounts

Stephen M. Butler
In reply to this post by Teresa
On 3/7/19 9:56 AM, Teresa wrote:

> I have 25 years experience in Accounting, however never set up a chart
> of accounts.
>
> I just started working for my daughter, who has done everything in excel.
>
> I have put all the gl accounts in GnuCash, but they all went in as
> parent accounts, I new term to me.
>
> My question is, shouldn't these be child accounts? Also, do I set up a
> single of each Equity, Liability and Asset accounts as parent accounts
> with the beginning balances, and transfer to the child accounts from
> there?
>
> Thank you,
>
Yes they should.  And, yes those three plus Income and Expense.  So you
would have 5 top level accounts.

You may then edit the other accounts and place them under the proper
parent.  No need to re-create and no need to transfer the transactions. 
Once you re-parent the accounts everything will be setup correctly (if
you pick the correct parents).

Good luck.

--Steve

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Re: [GNC] Setting up chart of accounts

Bucky Carr
In reply to this post by Bucky Carr

I did it directly in the child account with the corresponding,
double-entry accounting entry into Equity child account.

For example I have my Asset:Banking:Checking1 hierarchy and my
Equity:Opening_Balances hierarchy. In the Checking1 child account I
entered the opening balance with a corresponding entry in my
Opening_Balances child account. That Equity:Opening_Balances child
account ends up with lots of entries from all the open balance entries
pulled in from various accounts during the setup process.

(I'm not an expert but this has worked for me)


On 3/7/2019 11:18 AM, Teresa wrote:

>
> One more question, just to be clear, did you set up opening balances
> in the child accounts, or transfer from the proper parent account?
>
> On 3/7/2019 1:03 PM, Bucky Carr wrote:
>>
>> The way I did it was to set up a CoA with 5 parent accounts: Asset,
>> Equity, Liability, Income and Expenses. I set those as top level
>> accounts so no transactions can be entered directly into them. Then
>> I set up all my child accounts under the proper parent accounts.
>> Then I set up the opening balances in each child account. Depending
>> on the level of detail I wanted some of the child accounts have
>> child accounts of their own.

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Re: [GNC] Setting up chart of accounts

Adrien Monteleone-2
It’s been many years, but if I’m not mistaken, that is what GnuCash does when you enter an opening balance when creating an asset or liability account for the first time. (rather than entering it later)

If you are planning to have other Equity entries, it is probably a good idea to split the opening balance transactions off into a child account as you indicate here.

Regards,
Adrien

> On Mar 7, 2019, at 5:36 PM, Bucky Carr <[hidden email]> wrote:
>
>
> I did it directly in the child account with the corresponding, double-entry accounting entry into Equity child account.
>
> For example I have my Asset:Banking:Checking1 hierarchy and my Equity:Opening_Balances hierarchy. In the Checking1 child account I entered the opening balance with a corresponding entry in my Opening_Balances child account. That Equity:Opening_Balances child account ends up with lots of entries from all the open balance entries pulled in from various accounts during the setup process.
>
> (I'm not an expert but this has worked for me)
>

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Liz
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Re: [GNC] Setting up chart of accounts

Liz
In reply to this post by Mike or Penny Novack-4
On Thu, 07 Mar 2019 14:40:28 -0500
Michael or Penny Novack <[hidden email]> wrote:

> Since you say you are experienced in accounting (but new to gnucash I
> think what you are asking is "if I have an account A and I want it to
> be a child of account B, how do I do this (in gnucash)?"
>
> Yes?
>
> If so, what you want to do is "edit" account A which will give you a
> chance to specify account B is its parent.
>
> Try it where it is easy. For example, under the main parent Assets
> you probably want children "current assets" and "fixed assets". Then
> under "current assets" you probably want "checking account",
> "undeposited cash", etc.

What isn't clear is that you can change things - you can move accounts
and give them new parents, and so on.
If you don't get it quite right at first, you can edit it and fix it.

Liz
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Re: [GNC] Setting up chart of accounts

Justin Haynes
Teresa, At the risk of going off topic, hang in there.  :-)   I am not an
accountant and only learned bookkeeping by having the title of "Treasurer"
fall upon me for a non-profit I am involved in.  We needed to use
Quickbooks Online.  Around the same time, I started doing my own finances
in GNUCash.

My experience has been that it is really difficult to start books, and once
you have it nailed down it is much much easier.

On top of that, my opinion is that it is harder to get started with
GNUCash, and much much easier to keep using GNUCash.  Harder because not
many programs work like GNUCash does anymore, but so much easer to keep
using because it is so consistent from version to version.  You can learn
these skills now and you won't have to worry about some company changing
everything ever 3 years and dragging you in a new direction.  GNUCAsh is as
consistent as accounting should be, and it uses *real accounting concepts*,
so it is really universal.

Lastly, the user community is wonderful.  The knowledge is out there, and
the typical user (seems to me) has been using it for years.

Let us know how it goes. Liz experience is in line with mine.  When you
start the account you have an opportunity to transfer from opening
balance.  IT's been a while for me as well.

My opinion is that it is better to have more accounts and more structure
than too little.  You can always delete a subaccounts like
"Expenses:Victuals:Coffee:Retail"  "Expenses:Victuals:Food" and be prompted
to move *all* the transactions into "Expenses:Victuals".  Then you can
rename "Expenses:Victuals" to "Expenses:Food".  But it is much harder to
decide later that you want to split "Expenses:Food" into
"Expenses:Food:Restaurant" and "Expenses:Food:Grocery", becuase you'll have
to redo the transactions to file them into the separate new accounts.

Is your billing taken care of or are you setting up A/P and A/R?  There are
quite a few business owners on the list as well who have experience with
that.  I use A/P for my own personal finances because I love being able to
find all my invoices in one place, and so I can quickly find out if a line
item in checking means I actually paide the whole bill or over paid, etc...

Good luck!,

Justin

On Fri, Mar 8, 2019 at 3:17 AM Liz <[hidden email]> wrote:

> On Thu, 07 Mar 2019 14:40:28 -0500
> Michael or Penny Novack <[hidden email]> wrote:
>
> > Since you say you are experienced in accounting (but new to gnucash I
> > think what you are asking is "if I have an account A and I want it to
> > be a child of account B, how do I do this (in gnucash)?"
> >
> > Yes?
> >
> > If so, what you want to do is "edit" account A which will give you a
> > chance to specify account B is its parent.
> >
> > Try it where it is easy. For example, under the main parent Assets
> > you probably want children "current assets" and "fixed assets". Then
> > under "current assets" you probably want "checking account",
> > "undeposited cash", etc.
>
> What isn't clear is that you can change things - you can move accounts
> and give them new parents, and so on.
> If you don't get it quite right at first, you can edit it and fix it.
>
> Liz
> _______________________________________________
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