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2. Create Accounts

2.1 Be prepared

If you are importing existing accounts to Tinybooker you need its latest final statement to be able to save all the balances in it. They will be used for opening your next financial year. And they will be used for the final Statement of your first financial year in Tinybooker.

Secondly you need the Scheme (Chart of accounts). If you have not visited in action Accounts/New../Establish New Accounts as told in the previous chapter , you should do it now and select the best scheme templates for your purposes. You need to select two templates: an income statement template and a balance sheet template.

When you have selected templates as the starting point for your scheme, you should plan what changes you need to do to the selected templates. We highly recommend that you write a detailed draft of the resulting scheme you want. Let us have a look at scheme inside.

2.2 Scheme Inside

Scheme (Chart of accounts, COA) is a collection of available accounts. It forms the classification of financial transactions in an accounting. Moreover Tinybooker scheme defines how an account balance is calculated from other accounts and the layout of standard income and balance sheets. The order of accounts in the scheme defines the order of accounts in the report.

Tinybooker account has the following attributes:

When you create a new scheme from templates this is all you need to consider. But when you update the scheme of an existing accounting you shall be aware that there are transactions classified into accounts and accounts thus have additional attributes debit and credit. You must not lose this information when updating the scheme. This problem raises in three cases:

Difference between updating a new scheme and an existing scheme is described detailed in the chapter “New Accounts Step by Step” step 5 and step 8. This part of Tinybooker is experimental and not heavily tested.

2.3 Calculation Algorithm

The calculation starts from so called accounting equation: Assets = Liabilities + Owner’s Equity. Starting from system accounts 08 and 09 Tinybooker goes recursively through all formulas and adds them to the calculation pile. The pile is then executed in reverse order and the result is member account's debits and credits summed according all the formulas.

Formulas should fulfill the following statement: Every account is referenced in the formulas once and only once. Let us see an example:

    Thistown Open Source Club 
    Scheme 01.01-12.31.08 
    10000           regular actions (11000+12000+13000+20000) 
    11000           meetings (11100+11200) 
    ... 

    29000           surplus/deficit before projects (10000) 

    30000           projects (31000) 
    ... 
    07              surplus/deficit (29000+30000) 
  

Example 1: The once-statement

The balance of account 29000 is same as the balance of account 10000. So you might think that the formula of account 07 could be written “10000+30000” as well. But if you do this the account 29000 is not referenced in any formula and if leaves out of the calculation pile.

Respect the once-statement. Account without any reference is an error and you are warned if an account is referenced more than once.

The internal balance of an account is credit minus debit. In reports this corresponds to the intuitive positive revenue and negative expense. For readability assets are represented as the complement of the internal balance because intuitively money in the cash is positive.

2.4 New Accounts Step by Step

Step 1: Establish a new accounting item

New Accounting Item
Image 3: New Accounting Item

1. Write a short identifier for your accounting. Word “demo” is reserved for Tinybooker Accounting Example.

2. Write the Accounting Unit Name. It will be used in report headers.

3. Default for data folder is .../your-home-folder/.tinybooker/identifier If you are not satisfied for this, click the Browse-button to select or create an empty folder for accounting data.

4. Click Next when you are ready.

Step 2: Set the accounts preferences

Accounts Preferences
Image 4: Accounts Preferences

1. Contact info is accountants memo of his client.

2. Select one of the available localizations for the language of the reports.

3. Check that language details are correct.

4. Click Next when you are ready.

Step 3: Define the financial year

Define the financial year
Image 5: Define the financial year

1. Define the financial year you are going to open selecting the start and end date from drop down calendar.

2. If your financial year starts with zero balances, the page is done, go to next. Else check: “I will enter balances of the previous financial year” and another pair of date entries will open.

3. Select the start and end of the previous financial year, if you checked: “I will enter balances of the previous financial year” and click the Next-button.

Step 4: Select scheme templates

Select scheme templates
Image 6: Select scheme templates

1. Select the income statement and balance sheet of the templates in your selected reports language.

2. Click Next when you are ready.

Step 5: Edit the new scheme

Add Account Action
Image 7: Add Account Action

1. The scheme you are editing is left on the window. Click an account to select the account you want to edit or remove or select the place where you want to add a new account.

2. Click the buttons on the top right corner of the window to edit, add or remove the account. The selected action will open on the bottom right part of the window.

3. Actions will be described detailed below. When you are ready click the OK, Add or Remove button on the bottom right corner of the action area on the window.

Edit action opens entries with current values of account attributes.

1. You cannot change account number here. The way to do this is to remove the account and add a new one. Edit account name, mnemonic and other attributes.

2. You are accepted to set account group type without any child accounts and no formula, but you are remembered to add them later.

3. For a group type account define the formula. Select account on the left and click “Add to formula” or “Remove from formula”.

4. On layout the indent is set automatically on the base of the hierarchy. Set the skip if you want empty lines before this account in reports.

5. Click OK-button on the bottom right when you are ready.

Add action opens empty entries for a new account attributes.

1. Select the location of the new account. Options are:

Remember that maximum indent level is 3. You cannot add any more children accounts if the parent is on indent level 3. This restriction is because we do not want the standard reports page width grow inconvenient large. Consider this when planning your scheme and notice that indent is only for readability and calculation formulas are all independent of the indent level.

2. Write account number, optional mnemonic and account name. Account number and mnemonic if any must be unique in the scheme.

3. Select the top type of account: base account or account group, subtype selection will update accordingly. Select proper subtype. Here you are accepted to add a group type account without any child accounts and no formula, but you are remembered to add them later.

4. If you are adding a group type account add to its formula all intended accounts that already exist in the scheme. Select account on the left and click “Add to formula” or “Remove from formula”. Add missing accounts after you have added them to the scheme.

5. On layout the indent is set automatically on the base of the hierarchy. Set the skip if you want empty lines before this account in reports.

6. Click Add-button on the bottom right when you are ready.

Remove action is simple because scheme do not have any debits and credits connected. You can remove only a bottom level account with no children. To remove a group account remove first all its children. Click Remove account on the bottom right of the window and the account is physically removed from the scheme. If the removed account is referenced in its parent account's formula you are prompted to accept removing this reference. If removed account is referenced in some other accounts formula you shall remember to update that formula manually.

This in the place to make your scheme as complete as possible. Updating it later is more difficult. When the scheme is done click the Next-button. If you in the step 1 selected zero balances you will pass steps 6 - 8 and go straight to the final step 9.

Step 6: Enter final balances of the previous financial year

Enter balances
Image 8: Enter balances

If you in the step 1 selected zero balances you will pass this step and go straight to the final step 9.

1. All the base accounts in your scheme are selected to this table. For each write the balance to the right most column and select the correct debit/credit.

2. Click Next balance to get the next row until all accounts are handled and Next balance label changed Finished. Then go to the next step from button Next.

Step 7: Check the final statement you entered

Check balances
Image 9: Check balances

If you in the step 1 selected zero balances you will pass this step and go straight to the final step 9.

1. You see the income statement and balance sheet based on the balances you just entered. Check that the result is correct.

2. If there are errors go back to the previous pages. Repair your inputs and come back to this step until the result is exactly what it shall be.

3. Click Next when you are ready.

Step 8: Edit the existing scheme

Removal dialog
Image 10: Removal dialog

If you in the step 1 selected zero balances you will pass this step and go straight to the final step 9.

The new financial year is now opened with assets, liabilities and equity you entered for the previous period. You are now editing an existing scheme and we shall take care of possibly lost balances. In the step 5 you should make your scheme so complete that in most cases you need to do here nothing, but go to the next page. Let us see what is different when editing an existing scheme. For detailed description of editing an existing scheme see chapter Preferences Page 5: Edit the Scheme.

Edit action: You can do anything you could in the step 5 edit action but if you set a base type account to group type the balance of this account is lost. A removal dialog is popped up and you are asked to define where to move the balance to. The firs line tels which account's balance will be moved. And on the next lines you tel where it will be moved to. Transfered amount is told as percentage because it may be applied to any period before the current financial year and absolute balances may vary. Select the target account from drop down menu. Or you may also enter a new account number and account name. New accounts will be added to the tilikartta as a child of the account that you are editing. You should edit the added accounts later if defaults are not good enough. To add more target accounts click the button Add Item.

Add action: Also here you can do anything you could in the step 5 add action but if you are adding a child account to a base type account the parent accounts type will change to group type and its balance is lost. The removal dialog is popped up and handled just like in the edit action above.

Remove action: Also removing an account means losing its balance. Removal dialog fits nice into the pages action area and separate dialog is not needed. You cannot insert new accounts to the scheme here. Add all target accounts to the scheme before removing an account. Select target account from drop down menu and write its percentage to the right most column. To add more target accounts click the button Add Item.

Step 9: Set the financial year properties

Financial year properties
Image 11: Financial year properties

This is the final step of creating new accounts. If you are only probing how it works click Cancel and accept to undo your dummy accounts.

1. To divide work between many peoples or to expand the range of voucher numbers (1-9999) you may define more voucher series. Id is one character and No is the current next free voucher number (default 1).

2. Default accounts are for action Entries/Save new entries account selector. Select account on the left and click Set selected.

3. Before you save a new voucher it is handy to see what is the balance of some accounts after you select to complete the save. Especially useful this is with cash and bank accounts. Select account on the left and click Add account or Remove account.

Click Finished when you are ready. Your new accounting is now created.


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