GnuCash Business Features

GnuCash is a free open-source finance application, anyone can use to manage their personal and small business finances. It’s designed to be easy to use, yet powerful and flexible.

The business features in GnuCash are quite extensive; particularly for a free product and include double-entry accounting functionality, a checkbook-style register for tracking both income and expenses, reconcile bank accounts, and it can handle transactions in a variety of currencies. The really great thing about GnuCash is it is based on professional accounting principles to ensure balanced books and accurate reports.

It is an excellent option for startups and small businesses with limited budgets. The product offers some very specific advanced accounting features that are designed to be used by businesses.

The accounting needs of a business are quite different from that of a person. Businesses have customers that owe money, vendors which are owed money, employee payroll, more complex tax laws, etc. GnuCash offers business-oriented features to facilitate these needs such as:

  • Accounts Payable (A/P)
  • Accounts Receivable (A/R)
  • Customer and Vendor Tracking
  • Budgeting
  • Reporting
  • Payroll

Automatic statement reconciliation is also available in GnuCash, with banking transactions automatically downloaded and matched with system transactions.

There is also a bill payment reminder in GnuCash which will notify you when bills are due to be paid, and most importantly, will also notify you when a customer’s payment is late.

GnuCash comes with over 30 prebuilt reports, including:

  • Account Summary
  • Income
  • Expenses
  • Transaction Report
  • Balance Sheet
  • Profit & Loss
  • Portfolio Valuation, and many others.

Reports support graphical views of the data, including pie charts, bar charts, and scatter plots. The reports can be exported to HTML files, and are easily customized.

International Support

There are many built-in features to facilitate interaction with the international world we live in today.

Automatic File Backups and Crash Recovery

GnuCash makes a backup copy of your data each time your data file is saved. Program preferences let you set how many in a series of backup files are saved. Keeping multiple backups never hurts, and definitely helps if you need to restore a file going back weeks. GnuCash saves log files to document changes made to data so it is possible to recover work in the event of a power outage or system crash.

A Mobile APP is available for Gnucash, GnuCash for Android allows you to keep track of all of your financial transactions, and later import those transactions into GnuCash.

Beginners Guide to Using Gnucash

Before you begin working on GnuCash, It is recommended you have a basic understanding of Accounting Concepts, and that you understand this section before proceeding.

GnuCash is easy enough to use that you do not need to have a complete understanding of accounting principles to find it useful. However, you will find that some basic accounting knowledge will prove to be invaluable as GnuCash was designed using these principles as a template.

The 5 Basic Accounts

Basic accounting rules group all finance-related things into 5 fundamental types of “accounts”. That is, everything that accounting deals with can be placed into one of these 5 accounts:

Assets -Things you own

Liabilities -Things you owe

Equity- Overall net worth

Income – Increases the value of your accounts

Expenses – Decreases the value of your accounts

It is clear that it is possible to categorize your financial world into these 5 groups.

For example, the cash in your bank account is an asset, the business loan you owe the bank is a liability, money earned in the course of your business is income, and the cost of office supplies for your business is an expense.

The Accounting Equation

The relationship between 5 basic accounts and how one type of account affect the others:

Assets – Liabilities = Equity

You can increase your equity through income, and decrease equity through expenses. For Example: when you receive sales income you become “richer” and when you pay for office expenses you become “poorer”. This is expressed mathematically in what is known as the

Accounting Equation:

Assets – Liabilities = Equity + (Income – Expenses)

This equation must always be balanced, a condition that can only be satisfied if you enter values to multiple accounts.

For example: if you receive money in the form of income you must see an equal increase in your assets.

As another example, you could have an increase in assets if you have a parallel increase in liabilities. Such as in the case of a business loan that increases your assets.

The Double Entry System of Accounting

GnuCash uses what’s called a double-entry accounting system. This is a formal system that’s a worldwide standard for accounting.

What a double-entry system means is that every single transaction or every record in GnuCash has at least two records that are going on behind the scenes. There are two transactions, a debit, and credit, and they have to add up to the same amount.

Most of the time, you don’t see this happening. For example, when I create an invoice, you’re sending it out to a customer, and an account of yours will get debited. That account is the accounts receivable account. It’s the account that’s waiting for this money.

When your customer pays you, that payment gets credited from your accounts receivable, and it’s being debited into your company’s checking account, which is where the money is arriving.

Every single transaction needs this double system to tell it where to go and where it’s coming from. In fact, different types of accounts will handle debts and credits differently. In some accounts, a credit means the account is decreasing in value, and in others, it means the account is increasing.

GnuCash makes it easy for newbies to enter debits and credit transactions by using the term deposits and withdrawals instead of debits and credits. If you prefer to use the term debits and credits it is possible to turn on that feature.

1. How to Install GnuCash

Gnucash can be installed on windows or mac computers, desktops, or laptops. GnuCash is available for older operating systems. To download the latest stable release of GnuCash visit gnucash.org.

On the GnuCash Welcome page, you can select the latest version of the software based on your computer operating system. GnuCash is available for newer operating systems such as Windows 8 and 10 and Apples High Sierra, as well as older operating systems such as Windows 7, Vista, XP, and earlier Mac operating systems. Select your operating system by clicking on one of the options.

2.-installation

Once the download is complete, you will find the GnuCash executable file under your windows download folder. Double-click on the GnuCash setup icon to launch the program.

Windows security might pop up with a message the publisher could not be verified, are you sure you want to run this software? Or do you want to allow the following program from an unknown publisher to make changes to this computer? Click Run or Yes to continue.

On the first screen, you see the language selection dialog box with English already selected by default. Click ok to continue. If you need a different language click on the drop-down arrow and select it. Then click OK to continue.

The next screen is the information screen which is more like “The License Agreement” it is a good idea to read it. When you are finished reading it, click on Next to proceed to the next screen.

On the Select Components screen, you are given the option of selecting which options you want to be installed on your computer. In most cases the default selections are fine. On the bottom, it specifies how much free space in megabytes (MB) is required on your hard disk to install the program. If you are satisfied that your computer can handle the installation click next.

On the Select Additional Tasks screen, you are given the option of having the program create a desktop icon and a start menu link for you. It is better to leave the options checked to allow the software to create the icon and link, it will save you time searching for the program to start it since the program will install a shortcut on your desktop and in your start menu. Click next to continue.

The last screen is a recap of all the selections made by you so far. Click Install to start the installation. This may take several minutes, follow the instructions to complete the setup.

If everything went as planned you should be able to see the GnuCash icon on the Desktop!

2. How to Setup A Business Account In GnuCash

Now that the program has been installed it is time to set up the chart accounts. The chart of accounts, or what Gnucash refers to as the account tree is what you will use to keep track of your business income and expenses.

To begin, open the Gnucash program by clicking the Gnucash shortcut icon on your desktop. The program created the icon when you installed the program, as long as you left that option checked. If you don’t see the shortcut on your desktop look for the program in your windows start menu.

 

3. How to Setup A Business Account In GnuCash-Part 2

Once you Apply the business settings the Save As Dialog Screen should appear. In this next step of the business accounts setup, you will name your accounting file and create a folder to hold the files.

This step is crucial because GnuCash generates a lot of files and if this step is not done properly, your files will end up outside of the folder intended to hold the business files and all mixed in with your files in your document folder. When done right your files will be saved and organized into the folder specifically created to hold your Gnucash files.

4. Tour Of The GnuCash Interface

Each time you open GnuCash, you will find that the Tip of the Day screen pops up, ready and available to offer helpful tips about using the program: These helpful tips provide useful information for beginning users. To view more of the tips, click on next to continue viewing the tips. When you have finished Click Close to close out the Tip of the Day.

If you don’t like the idea of seeing the tips popup every time you open the program, click on the checkmark next to show tips at startup to remove the checkmark which will deselect this feature. Then select close. To close out.

DISCLAIMER

This content is for information purposes only and information provided should not be considered legal, accounting or tax advice or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does it have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Lees Business Supplies cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.

LEE BUSINESS SUPPLIES AND SERVICES IS NOT A FINANCIAL PLANNER, BROKER OR TAX ADVISOR. NEITHER CONTENT AVAILABLE FOR DOWNLOAD ARE INTENDED TO PROVIDE LEGAL, TAX OR FINANCIAL ADVICE. The content and materials are intended only to assist you in your general organization and decision-making for your business or practice. Nor LEE BUSINESS SUPPLIES AND SERVICES or thebusybeepost.com shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.

If unsure about tax law requirements, get professional advice.