Now I am no financial guru when it comes to matters pertaining to financial solutions (or am I?), but I’m quite content with GNUCash. GNUCash, for me, is a simple management solution for finances that extends past the capacity of using Excel as your budget tracker (not that you should do that).
The reason I enjoy using GNUCash (apart from it being freely available) is how flexible but powerful it is. In under 5 minutes I was capable of reconciling my accounts and tracking the $18.2 discrepancy between my bank statement and my account balance in GNUCash. The reporting functionality is immaculate (more on that later) and the availability to utilize multiple accounts, with multiple journals is amazing.
Disclaimer: I love this software.
GNUCash uses double-entry accounting and transactions. In basic terms, credit an expense account, and debit a saving account. This basic concept allows for in-depth analysis of the current cash-flow of an account. For example, this is how I personally setup an opening balance against an account:As you can see, under the account “Westpac Expense Account” I am depositing $100.00, which has a double entry to Asset: <Expense Acount>. Now this is where double-entry accounting becomes exciting. In the accounting world, “credits must always equal debits”, meaning that whenever an expense is incurred, there must be an entry under the Expense Account as a credit (we’re adding to the value of this expense account) and a debit to the cashing account responsible for the expense. The following example is how you would credit your Gas Expense, and in-turn reduce the total balance of your bank account:
In a transaction report, we would see the Auto: Gas credited to bring a balance of $100.00 and the Asset: <Account> debited $100.00. On a short side-note, when I studied accounting and finance (quite some time ago) the easiest method for double-entry accounting was PALER:
P – Properitary Equity (Owner Equity)
A – Assets
L – Liabilities
E – Equity
R – Revenue
Which, depending on the transactional nature of the account, would mean the following:
However I have deviated from the topic, slightly – I am not here to teach accounting, I’m here to tell you why I love this program. Apart from simple entries, you are able to reconcile accounts easily; that is, to identify discrepancies and “why credits aren’t equaling debits”. For the example above mentioned, it is able to query the transactions and provide an informative window:
You cannot tell me that’s not a huge function of keeping track of finances! So again, this financial application not only allows you to easily keep on top of income and expenses, but allows you to get a clear view of your expenses, income and discrepancies (similar to MYOB), all for free.
The last amazing feature I can say about the application is that the reporting mechanisms are very easy to create (should you want to make your own queries) along with several existing reports. For example, the cash flow report will record all “Main Accounts” pertaining to income and expenses, as for this example:
So give it a go, and I am quite confident you’ll thank me later!