Manage your Finances with GnuCash

I have been GnuCash to help manage my finances for a while now. If used correctly, it is useful tool for tracking your finances and planning for those big ticket purchases. You do not require a lot of knowledge of accounting to use this software – just enough discipline to keep the data up to date! It is also an open source software. This tutorial provide a quick introduction to some of its basic functions.

Setup the Accounts

All assets, expenses, etc. are organised into a hierarchy of accounts. When you create a new file for the first time, you can use a wizard to set up some default accounts and custom them later. To begin, create your first accounts by selecting FileNewNew File. A New Account Heirarchy Setup druid (or a wizard) will guide you through to setting up the first set of accounts. Feel free to go through the druid to setup the first accounts. Once the wizard finishes, you’ll be brought to the accounts page.

Accounts Page

Here, you should review which accounts have been setup, as the hierarchy of accounts also represents the breakdown of your asserts, income, expenses, etc. You should check that the accounts are broken down to a level that you are happy with. For example, if you have multiple savings account you may wish to have separate subaccounts for each one instead of having just one account to represent all of them.

Tracking your Accounts

When you create a new account, the dialog will have an Opening Balance tab for you to enter the opening amount.

Opening Balance Tab

If you did not enter an opening balance, you can still enter this manually. First, open up the account that you want to enter the initial balance for. An empty accounts page will looks something like this:

Transactions For an Account

The transfer column is the account that the amount is taken from. All transactions must result in a transfer to or from another account. If you leave the column blank, GnuCash will assign a default account. For opening balances, GnuCash would have suggested using a separate equity account. After entering your opening balance, you can open the account that you transferred from. You should be able to find a corresponding entry back to your account. Each time you enter a transaction into an account, there will always be a corresponding entry in the account that you transfer from or to. When you return to the main account page, the amounts in each account will be updated to account for the transactions. The totals under each account reveal how much is in an account or how much has been spent, etc.

Recurring Transactions

GnuCash allows can automatically enter recurring transactions. There are a couple of ways to setup the transactions. The scheduled transactions editor accessed through ActionsScheduled TransactionsScheduled Transaction Editor. You should be able to go through each of the options and fill in the fields without much trouble. Once you have created your scheduled transaction, it should be added to the list of transactions on the Scheduled Transactions page. You can also create scheduled transactions from an accounts page by right clicking when you are entering a new transaction.

Generating Reports

The data collected by GnuCash can be displayed in many different ways. Firstly, there is the main accounts page that provides a snapshot of how much is in each account or how much you have spent in each category. Expense Piechart and Expense Barchart reports available under Income and Expenses are especially useful if you are trying to find ways at reducing spending. If you are also wondering how much you are worth over a period of time, you should check out the Net Work Barchart under Assests & Liabilities. However, it is important to note that the reliability of the information provided by these reports depends on how well you manage to keep the data up to date.

This covers the some of the features that you would most likely use in managing your personal finances. However, there are many more features not yet covered. If you run a business, it also has features for employee salaries, invoices and bills. If you hold shares, it also has features for entering purchased stocks and retrieving the latest prices. There are simply too many features to cover in this tutorial! If you are interested in using the other functions, the Tutorial and Concepts Guide under Help will provide most of the information that you require.

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