Double Entry Accounting for Personal Finance?

Discussion in 'Quickbooks' started by dh003i, Nov 21, 2005.

  1. dh003i

    dh003i Guest

    I'm trying to migrate from Linux to Windows. One thing I've noticed is
    the lack of a Windows program that can do double-entry accounting for
    personal finance. I have a trial version of QuickBooks installed (Pro
    2004), and it seems really geared towards setting up things for small
    businesses. I'm having difficulty figuring out how to handle
    investments made in stocks, mutual funds, or retirement accounts in
    QuickBooks. When I set up a checking account with QuickBooks, it seems
    to want to classify everything as either income or an expense, but a
    check written up to go to a Roth IRA trust is neither.

    As for Quicken, it doesn't do double-entry accounting, thus isn't
    particularly satisfying to me. I've heard some people say that it
    really "can" be double-entry accounting, so-long as you assign
    everything to a category. This seems rather simplistic, as one also
    needs to do split transactions for many things. For example, consider
    my paycheck. In GnuCash, what I'd do is the following

    Cr: Salary
    Dr: Taxes (split out into federal, state, local, SS)
    Dr: 403(b) plan
    Dr: Checking account

    That's a split transaction, where the money comes from one account (the
    credited account) and goes to multiple accounts (Taxes, 403(b),
    checking). It doesn't seem possible to do this in Quicken.

    As for QuickBooks, I'm having difficulty figuring out how to split a
    transaction like that in it. What I need to do is get into the Salary
    account, and record the transaction from there, splitting the
    transaction such that the Salary account is credited, while federal
    tax, state tax, local tax, 403(b), and checking accounts are debited,
    such that the sum of those debits equals the amount the salary account
    was credited. However, QuickBooks seems very restrictive, and wants me
    to do everything from the checking account (to whence the statement
    data of a payment amount was downloaded); but that's incomplete
    information.

    Can anyone help me out here? This was all relatively simple in GnuCash,
    as it allowed me control over the accounts I was creating. Not so in
    QuickBooks.
     
    dh003i, Nov 21, 2005
    #1
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  2. dh003i

    Allan Martin Guest

    There are probably even less end users that would want a personal finance
    product that uses double-entry accounting. This may account for the lack of
    programs available.

    I have a trial version of QuickBooks installed (Pro
    Good observation. The fact that it is the leading small business accounting
    program with an 86% market share has a lot to do with that.

    I'm having difficulty figuring out how to handle
    Just wait until you try to play an MP3 in Quickbooks.

    You need a Budweiser.


    I've heard some people say that it
    Nothing like coming to a QuickBooks newgroup for help using Quicken.


    Stick with GnuCash. The program sounds really slick to me.
     
    Allan Martin, Nov 21, 2005
    #2
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  3. Surely you can edit any transaction in QB to split out the various elements
    of your paycheck.

    Just add nominal accounts as needed!

    (I have not used "quicken", but I cannot see how a NON double entry
    accounting package can work, as I cannot think of any transaction that does
    not have both a credit AND debit entry, so I would be interested to know how
    quicken deals with transactions!)
     
    Adrian Boliston, Nov 21, 2005
    #3
  4. dh003i

    Allan Martin Guest


    It uses double enties but hides this fact from the end user.
     
    Allan Martin, Nov 21, 2005
    #4
  5. dh003i

    HeyBub Guest

    "Greetings! I am with the Church of the Immaculate Parsnip and we are giving
    $5.00 to every merchant on the street. Here's your five dollars and may all
    your parsnips be little ones." (???)

    Credits and debits are artificial constructs that live in the (non-real)
    universe of double-entry bookkeeping and are the original "imaginary
    numbers." Accounting programs, such as QB or Quicken, often bear more
    resemblence to video games than reality.

    But, hey, if we don't save the universe, who will?
     
    HeyBub, Nov 22, 2005
    #5
  6. Oh yes, I can damn well testify to that. Somewhere on an old backup I have a
    Quicken file with a single entry in it. You don't want this file!!! It was
    hell finding the single entry transaction in the file. You couldn't look for
    it because it's other half didn't exist! Fixing it was fun because you can't
    create an single entry and you can't delete it either!!!

    Quicken just uses terminology to hide the fact it is double entry. Category
    = account (without accessible register)

    now sending the OP off to the Quicken group where he belongs ...
     
    Golden California Girls, Nov 22, 2005
    #6
  7. dh003i

    Lisa C Guest

    Comments inline:

    Gonna guess that is why Intuit markets QuickBooks as " the fastest and
    easiest way to manage your small business finances."
    No. When you set up a checking account with QuickBooks, it should have an
    account type of "bank account".
    When you write a check to go to your Roth IRA trust, THEN is the time you
    are required to enter the account(s) the money is being allocated to. The
    accounts CAN be income or expense account, but other account types are
    available.
    ???
    First you complain about QB requiring you to enter an account for the Roth,
    and then you say Quicken doesn't appeal to you because it is not as strict?
    What?!?
    Did you even LOOK at the program? Whatever gave you the idea that Quicken
    cannot do splits?
    Not only is it possible.. there is a wizard in the program to help you set
    it up. The program will offer to set up your paycheck EVERY time you enter a
    check that includes the category of salary.
    Well, thank goodness for restrictions! You want to create a transaction in
    an account called "Salary" and DEBIT the checking account for you
    paycheck?!? You downloaded information indicating a DEPOSIT into the
    checking account. What you need to do is edit the deposit to show what
    accounts were affected.
    Umm.. that is because QB is a double-entry accounting system for small
    businesses. There are more controls in double-entry accounting systems for
    small businesses than there are in personal finance programs.

    I've used QuickBooks for 3 years and Quicken for several more. I don't
    understand your complaint re Quicken and "double entry" accounting. Why do
    you care? Just be sure to fill in "categorie(s)" for each transaction.
    Simple. Only difference between QB and Quicken in that respect is that QB
    will not let you enter a transaction without an account. Quicken will allow
    entries without categories, but will give you a warning message each time
    you do (unless you turn the warning off).
     
    Lisa C, Nov 22, 2005
    #7
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