Double Entry Accounting for Personal Finance?


D

dh003i

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.
 
A

Allan Martin

dh003i said:
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.
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
2004), and it seems really geared towards setting up things for small
businesses.
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
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.
Just wait until you try to play an MP3 in Quickbooks.

As for Quicken, it doesn't do double-entry accounting, thus isn't
particularly satisfying to me.
You need a Budweiser.


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.
Nothing like coming to a QuickBooks newgroup for help using 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.
Stick with GnuCash. The program sounds really slick to me.
 
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A

Adrian Boliston

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.
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!)
 
A

Allan Martin

(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!)

It uses double enties but hides this fact from the end user.
 
H

HeyBub

Adrian said:
(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!)
"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?
 
G

Golden California Girls

Allan said:
It uses double enties but hides this fact from the end user.
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 ...
 
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L

Lisa C

Comments inline:

dh003i said:
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.
Gonna guess that is why Intuit markets QuickBooks as " the fastest and
easiest way to manage your small business finances."
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.
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.
As for Quicken, it doesn't do double-entry accounting, thus isn't
particularly satisfying to me.
???
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?
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.
What?!?
Did you even LOOK at the program? Whatever gave you the idea that Quicken
cannot do splits?
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.
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.
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.
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.
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.
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).
 

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