[ale] GnuCash [OT]

[mike at trausch.us]

On 08/01/2012 09:18 AM, JD wrote:
> When I was forced to deal with accounting, I found that it didn't
> make sense - the rules seemed arbitrary to me and simply needed to be
> memorized since a general rule wouldn't work 100%. There wasn't any
> logic.  I still feel that way.

There are quite a few rules.  But when you stray from them, the reason
for them often becomes clear.  For the most part, accounting rules and
generally-accepted accounting practices exist so that the books of
companies are comparable between multiple different entities.  It is one
of many systems of rules that help people to make informed decisions
about a company's financial status.

> My companies pay an accountant and I keep the unofficial company
> records inside Quicken (running under WINE).  I can track a check
> book register without issues and assign categories too. ;) The doubt
> entry stuff seemed like 2x more work than is necessary for a small
> business.

DAC (double-entry accounting) makes a lot of sense, though it can be
(when done manually) very mundane.  The rule is that for every debit
there must be a matching credit, right?  This makes it so that the
entire system balances.  But then sometimes people wonder "If the whole
thing balances, and if for every debit there must be an equal credit,
how do you record new transactions?".  Easy enough; for example, when
you run payroll, you accrue a liability (actually, more than one
liability), which you record both in expense and in accounts payable.
It is an expense, because you had to pay in order to have your employee,
and it is a liability (in A/P) because you haven't paid it yet, but you
definitely owe it.

Then when you actually pay it, you credit your asset account from which
you paid it, and debit the liability (A/P) to indicate that it has been
paid.  The whole system allows you to "follow" the money so that you can
see where it went, and hopefully why.

The process of recording the transactions doesn't have to be as manual
as even GC makes it, though.  It can be mostly hidden under an interface
that "knows" the procedures for taking business events and turning them
into accounting transactions.  That's what I eventually plan to have for
this business' accounting system.  Whether or not I can (read: will have
time to) make it generalizable for others is TBD.

> I'm certain this shows my ignorance. That's fine. We can't know and
> understand everything.

Of course not.  Nobody's perfect!  :-D

> I've tried to get our accountants to encrypt emails to us. They don't
> "get it" either.  We always send them encrypted data. I'm fairly
> certain our data is not secure on their computer systems, but that is
> probably an issue at all but the largest accounting companies.

Yes... I know the feeling quite well.  I am trying to see if I can't get
my payroll people to learn how to securely conduct business.  They
currently send me everything in plaintext email, which makes me cringe
every single time that I get a payroll run finished.  I can't get them
to understand that email is not an inherently secure format for doing
things.

Personally, I would prefer to have a notification transmitted by email,
so that I can go to their (TLS enabled) Web site and pick up my payroll
documents and reports.  That would be far better.  I think that they,
and their other customers, see it as unnecessary and extra hassle.

	--- Mike

-- 
A man who reasons deliberately, manages it better after studying Logic
than he could before, if he is sincere about it and has common sense.
                                   --- Carveth Read, “Logic”

-------------- next part --------------
A non-text attachment was scrubbed...
Name: signature.asc
Type: application/pgp-signature
Size: 729 bytes
Desc: OpenPGP digital signature
Url : http://mail.ale.org/pipermail/ale/attachments/20120801/b61201a4/attachment-0001.bin