In regard to end of year, I found the following on the web a few years back.
The last section, “The Solution,” is how I do it and it works like a charm
(but I have a very small business with very few transactions). Easy-peasy
— Jesse Ayers
GnuCash and End of Year
Posted on 22 August 11
<http://www.gssezisoft.com/main/2011/08/gnucash-and-end-of-year/> by Greg
<http://www.gssezisoft.com/main/author/greg/>
Lots of people want to start a new GnuCash file for a new year. Well, here’s
how it is done.
Introduction
GnuCash is a free accounting package based on double-entry bookkeeping.
It supports multiple accounting files (so you can have multiple businesses) but
you can also have a separate file for each financial year of the business.
If you do use a new file for each year, each year you need to create a new file
with the same account structure (Chart of Accounts) and with a new set of
opening balances. The way to do this is not as obvious as it should be.
The Hard Way
Use “File”, “Save As” from your current year’s file to create a new file with a
new name. Open the new file. Delete all the transactions.
This isn’t as easy as it could be because you can’t select multiple
transactions: Open the first account. Select the first transaction. Click the
“Delete” button. You are now on the next transaction. Click the Delete button
again. Repeat this for every transaction in the account. Open the next account.
Delete all transactions just like you did with the first account. Repeat this
for every account.
If you have lots of transactions and lots of accounts this can take some time.
At least a couple of hours in my case.
The Seemingly Easy Way
GnuCash has a menu option “Tools”, “Close Book”.
This is well-intentioned but doesn’t remove any transactions. It adds two more.
I shouldn’t have been surprised. It does say this in the manual or guide.
What it actually does is add one transaction to all of your Income accounts
transferring the money to another account (such as Equity:Opening Balances) and
one transaction transferring all of your expenses to another account (often the
same one: Equity:Opening Balances). Each transaction is split across all of the
Income or Expense accounts and the total is balanced by a matching amount in
the nominated transfer account (Equity:Opening Balances).
It is a neat solution from an accountant’s point of view. No information is
lost. The Income and Expense accounts are all zero-ed ready for the new year
and the opening balances have been tweaked to reflect the new starting position.
However, for those of us that don’t think like an accountant, it is a pain in
the neck. We’d reconciled all of last year’s transactions. We’ve been through
that pain, and we never want to have to re-reconcile those transactions ever
again. We don’t want them there to edit by mistake (and mess up the starting
balances). We want a clean slate. We wanted an empty file and a new start for a
new year. It would also have been nice to have had new opening balances for
each of the asset and liability accounts. Their balances are correct but not
because of a fresh opening balance transaction. They are correct because every
transaction in every asset and liability account is still there.
If you do “Tools”, “Close Book” and want to reverse it, that’s pretty easy. Go
to the “Equity:Opening Balances” account (or whichever you specified) and
delete the two transactions. That will undo all of the splits entered into all
of the Income and Expense accounts.
Anyway, this menu tool does a very good job for accountants and does it very
well and eligently; but it isn’t what most of us are looking for.
The Solution
Anyone who has been using GnuCash for a while has probably already said, “What
on earth are you doing?”
It is actually incredibly easy. Provided you know how. It is one of those “You
have to be there to be able to get there” things.
It is probably even documented somewhere and I just didn’t notice it.
Maybe it is self evident and so obvious that no-one would even think of
explaining it.
You create a new file by “File”, “Export”, “Accounts”.
Choose the directory where you want the new file and give it a name that
matches your convention for business and year.
Now, pretend you haven’t created an export of some information from your
existing account file. Pretend it is a new account file just like your current
one. Use “File”, “Open” and select the export file. It opens. You can add
transactions to it. It has your existing accounts. There are no transaction in
it (until you add one). All of the Income and Expense balances are zero. So are
the Asset, Liability and Equity accounts; but it is a much better starting
point.
Add the opening balances of your Asset and Liability accounts and you are up
and running.
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