Bookkeeping the FOSS way

Setting Up Sub-Accounts

From looking at your current screen on GnuCash, you can see that it is not worth much to you as is. So in order to start getting the most out of the application, you now need to start populating it with sub-accounts. This can be done the same way as for main accounts except that you click the drop-down menu under the Parent Account Type section. GnuCash will then show which section this comes under (e.g., Assets). When you choose the parent account, depending on your choice, the Account Type options also change. At this stage, there is no need to worry about having an exhaustive list of sub-accounts. You can add more at any time by repeating the above steps.

Once all these have been entered, it is now time to add your opening balance. Again, go to Accounts | New Account. Input Opening Balance as your account name. This should then go under Equity in Parent Account. This will now be saved as a sub-account on the main page.

Inputting Opening Figures

Once all your accounts have been set up, you need to enter your opening figures. When we were doing our accounts, we began by inputting an opening balance under Savings. To do this, double-click on Savings. A dedicated tab will now open beside your main account page. Enter the amount of savings you have under the Deposit section (e.g., $2,000). Under the drop-down menu in Transfer, select Equity:Opening Balance. On the Accounts tab, you will see there is now $2,000 in both the Savings and Equity:Opening Balance sub-accounts.

GnuCash is fairly intuitive in that it calculates the totals in each parent and sub-account depending on the opening balances you enter. For more information on the basics of inputting transactions and reading outputs, read through the GnuCash Tutorial and Concept Guide [2].

Basic Transactions

Once you have all your accounts and sub-accounts set up and your opening balances are filled in, you can begin entering transaction data.

As with most financial software, you'll need a basic grasp of the double-entry system so you can interpret all the data in the Accounts section. When you work with GnuCash, you will always be concerned with at least two accounts. For every change in value on one account, there must be a balancing change in another account. This is known as the principle of balance.

GnuCash divides your data into three organizational levels: files, accounts, and transactions. These are categorized based on their complexity. One file can contain multiple accounts and each account can hold multiple transactions.

Begin by inputting your expenses. Go to an expense (e.g., Phone) and double-click. In the selected tab enter the amount and where it is coming from (e.g., Assets:Checking). When you go back to your main page, you will see that your Checking account has now been debited by the amount entered in the bill. This amount also shows up under Expenses.

You can also enter these transactions by going directly to Checking. From here, enter your description and in the Transfer section and choose the category of expenses. Make sure to enter the amount under Withdrawal, not Deposit.

You can choose to pay by credit card: This will then be displayed under the Liabilities section where you have entered the type of card you use.

At some stage during this process, you may want to pay a bill or input an amount from an account that is not already created while you are in the middle of a transaction. To do this, enter you chosen field (e.g., Checking). Fill in the description. Under Transfer, fill in an entirely new name rather than clicking on the drop-down menu (Figure 4). Next, press Enter. A pop-up box will appear stating that this account does not exist and asking whether you would like to create it. Click Yes. You can now add this account in the New Account box that appears.

Figure 4: You can enter figures by clicking on the exact transaction you want calculated. These will then show up on your main screen.

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