21 KiB
Contents
- 1. Introduction
- 2. Quick start
- 3. Introduction to double-entry bookkeeping
- 4. Conceptual overview of DrCr
- 5. Entering source data
- 6. General reports
1. Introduction
DrCr (‘debit-credit’) is a self-contained open-source double-entry bookkeeping framework.
Conceptually, DrCr exists in a middle ground between lightweight ledger-keeping tools (e.g. ledger, hledger, beancount) and heavyweight accounting packages (e.g. Xero, MYOB). Compared to the ledger-likes:
- DrCr is GUI driven, but data is stored in easily computer-readable format (SQL database)
- DrCr embraces accounting conventions (debits/credits, account types) – DrCr is not suitable for managing arbitrary non-financial double-entry-like data
- Applying accounting conventions to generate standard financial reports is core functionality in DrCr
- DrCr also preserves the conventional accounting relationship between source documents and ledger transactions – while the ledger is the core structure consolidating accounting information, ledger transactions can be generated programatically from source data of different forms
Compared to heavyweight accounting packages:
- DrCr's core function is to manage the double-entry ledger – management of other information is non-core, keeping functionality lightweight
- For example, there is no invoicing functionality in DrCr – it is the user's responsibility to post appropriate transactions to the receivables ledger accounts
- DrCr provides tools with sharp edges – it is assumed the user is familiar with double-entry bookkeeping
- DrCr is tailored towards small-scale individual use for personal finance (but use for business accounting is entirely possible)
2. Quick start
If a binary build has been provided, simply double click the DrCr application. Otherwise, follow the build instructions in the README.
The welcome screen is displayed – ‘Welcome to DrCr. No file is currently open.’ The first step is to create a new DrCr file. Click New file. Click OK to accept the default settings. A file chooser dialog is displayed – choose where to save the new DrCr file.
The main menu is now displayed. Click Trial balance. The trial balance report is generated, showing there are no accounts, and the total debits and credits are accordingly both zero. To navigate back to the main menu:
- Click DrCr in the top left at the menu bar, or
- Right-click anywhere and select Back from the context menu, or
- If the window is sufficiently wide, click the back icon to the left of DrCr at the menu bar
We will now enter a new transaction. From the main menu, click Journal → New transaction. The transaction editor is displayed. Enter:
| Date | Description | Dr | Cr | |
|---|---|---|---|---|
| Today's date | Opening balance | |||
| Dr | Cash at Hand | $100 | ||
| Cr | Opening Balances | $100 | ||
Click Save. The journal page has updated to show the new transaction.
From the main menu, click Trial balance. The trial balance now correctly shows a $100 debit balance in the Cash at Hand account, and a $100 credit balance in the Opening Balances account.
If we click Balance sheet from the main menu, the report will show zero balances for assets, liabilities and equity. This is because we have not configured Cash at Hand as an asset or Opening Balances as equity. We will do so now.
From the main menu, click Chart of accounts. The dropdown box at the top of the page is pre-populated with Asset. Select the checkbox next to Cash at Hand, and click Add type. The table updates to show that Cash at Hand is now configured as an asset account. Select the checkbox next to Opening Balances. Change the dropdown box from Asset to Equity, and click Add type. The table now shows:
| Account | Associated types | |
|---|---|---|
| ☐ | Cash at Hand | • Asset |
| ☐ | Opening Balances | • Equity |
Return to the Balance sheet report. The report is now correct:
| $ | |
|---|---|
| Assets | |
| Cash at Hand | 100.00 |
| Total assets | 100.00 |
| Liabilities | |
| Total liabilities | 0.00 |
| Equity | |
| Opening Balances | 100.00 |
| Total equity | 100.00 |
Now add another transaction from the journal page:
| Date | Description | Dr | Cr | |
|---|---|---|---|---|
| Today's date | Cash sales for the day | |||
| Dr | Cash at Hand | $10 | ||
| Cr | Sales | $10 | ||
If we now click Balance sheet from the main menu, a warning is displayed ‘Total assets do not equal total liabilities and equity.’ As the warning goes on to note, this is because the Sales account has not been configured.
Configure the Sales account as an income account in the chart of accounts.
Now, from the main menu, click Income statement. The income statement report is displayed:
| $ | |
|---|---|
| Income | |
| Sales | 10.00 |
| Total income | 10.00 |
| Expenses | |
| Total expenses | 0.00 |
| Net surplus (deficit) | 10.00 |
From the main menu, click Balance sheet. The current year surplus is automatically displayed under equity:
| $ | |
|---|---|
| Assets | |
| Cash at Hand | 110.00 |
| Total assets | 110.00 |
| Liabilities | |
| Total liabilities | 0.00 |
| Equity | |
| Current Year Earnings | 10.00 |
| Opening Balances | 100.00 |
| Total equity | 110.00 |
We can add additional transactions and configure additional accounts in like manner. Note that, whenever possible, it is preferred to generate transactions via the statements feature, rather than directly create manual journal entries (see Statement lines).
3. Introduction to double-entry bookkeeping
In this section, we briefly introduce the principles of double-entry bookkeeping, which underlies the conventional modern approach to accounting.
We first consider the balance sheet accounts – assets, liabilities and equity. Equity is defined as net assets, i.e. Assets − Liabilities = Equity at all times. For reasons which will become apparent, we will rearrange this so each side of the equation is expressed only in terms of addition, hence Assets = Liabilities + Equity. This is the accounting equation. From the equation, we can note that no account can change balance independently of the others. An increase in assets must be associated with either an increase in equity, or if equity remains constant, an increase in liabilities.
Equity can be further decomposed into total accumulated surpluses, being income minus expenses, plus all other equity accounts. Separating out the income and expense components in the equation, we can write Assets = Liabilities + Equity + Income − Expenses. Rearranging, we obtain Assets + Expenses = Liabilities + Equity + Income. This is the expanded accounting equation.
An increase to an account on the left-hand side of the equation (asset or expense) is a debit. An increase to an account on the right-hand side of the equation (liability, equity or income) is a credit. Similarly, a decrease to an asset or expense is a credit, and a decrease to a liability, equity or income is a debit.
The key principle behind double-entry bookkeeping is that any debit must be matched by a corresponding credit, and vice versa, in order to keep the accounting equation true. For example a debit to assets (increase in assets) must be associated with a credit to expenses, liabilities, equity or income (decrease in expenses, or increase in liabilities, equity or income).
| ⓘ |
Comparison with signed-number bookkeeping Users of ledger-like plaintext accounting software may be familiar with ‘signed-number’ bookkeeping. Signed-number bookkeeping is exactly equivalent to conventional double-entry bookkeeping – a debit is equivalent to a positive-valued posting, and a credit is equivalent to a negative-valued posting. |
4. Conceptual overview of DrCr
Key concepts
The core data structure in DrCr is the ledger, which is a collection of transactions. A transaction is a collection of postings, with an associated date and description. A posting represents a debit or credit to a single account.
An account is simply a name, associated with zero or more chart of account types. The basic account types are asset, liability, income, expense and equity. An account name is represented by a string of one or more Unicode characters. In some accounting software, the : character is used as a delimiter in account names (e.g. Asset:Current:Cash:Cash at Bank). This is permitted in DrCr, but the : character has no special meaning (i.e. DrCr has no concept of a tree of accounts and ‘sub-accounts’).
An amount represents a particular quantity of a commodity. Quantities are represented internally using fixed-point arithmetic – the number of decimal places precision can be configured at the time of database creation. The number of decimal places is the same for all commodities.
A commodity represents an amount of currency or other fungible asset. A commodity name is represented by a string of one or more Unicode characters except space. If the commodity name is a single character, it may precede the quantity in an amount (e.g. $100). Otherwise, it must follow the quantity separated by a space (e.g. 100 AUD).
The reporting commodity is the default commodity, in terms of which all other commodities will be valued. Every commodity which is not the reporting commodity must be associated with a cost base, which values the commodity in terms of the reporting commodity. A cost base may be either specified as a unit price (specifying the cost of one unit of the commodity, in terms of the reporting commodity), or a total price (specifying the total cost of the entire quantity of the commodity, in terms of the reporting commodity). The cost base follows the quantity and commodity name separated by a space. A unit price is specified using single curly braces (e.g. 100 USD {1.50}, each USD costs $1.50 in the reporting commodity). A total price is specified using double curly braces (e.g. 100 USD {{150}}, 100 USD costs $150 in the reporting commodity).
| ⓘ | All commodities, other than the reporting commodity, must specify a cost base. |
Workflow overview
The process of using DrCr can be conceptualised in 4 stages:
- Source data – The user inputs source data into DrCr
- Transactions – DrCr generates ledger transactions from the source data
- Balances – DrCr computes account balances from the ledger transactions
- Reports – DrCr produces balance sheet, income statement and other reports from account balances
Note that, conceptually, reports are generated based on account balances. In other words, it is conceived that reports will not be more granular than the account level. Therefore, there is limited functionality for filtering transactions at a level more granular than accounts.
| ⓘ | The account is the most granular unit of reporting in DrCr. |
The following sections explain in detail how source data can be entered, and how reports can be generated.
5. Entering source data
Functionality for entering source data is grouped within the ‘Data sources’ panel of the main menu.
Journal
The journal feature allows for arbitrary transactions to be created (manual journals) and posted to the ledger.
The journal page displays all transactions created in the journal module. By default, all posting amounts are displayed in terms of the reporting commodity. To display posting amounts in terms of the original commodities, click Show commodity detail. To edit an existing journal transaction, click the pencil icon next to the transaction description.
To create a new journal transaction, click New transaction on the journal page. This opens the transaction editor. To add additional postings, click the plus icon next to the account name on any posting.
Note that, whenever possible, it is preferred to generate transactions via the statements feature, rather than directly create manual journal entries (see Statement lines).
Statement lines
The statements feature allows for account statements to be imported (e.g. bank statements), from which transactions can be created.
The statement lines page displays all previously imported statement lines.
To import a new statement, click Import statement on the statement lines page. This opens the statement importer. Supported formats are OFX (1.x/2.x) and CSV. A CSV file must contain the headers Date (YYYY-MM-DD), Description, Amount. When the statement lines are imported and eventually reconciled, they will be posted as transactions to the Source account specified on the statement importer. Increases to account balances will be converted to debits, and decreases will be converted to credits (note that this terminology is consistent with the accounting convention, but opposite to that conventionally shown on bank statements).
When a statement line is initially imported, it will be shown on the statement lines page as Unclassified. Click Unclassified to open the statement line reconciliation dropdown box, to select the corresponding account to charge the transaction to (e.g. an income or expense account). Reconciling a statement line will create a transaction in the journal (see Journal), and link the journal transaction with the statement line.
If a statement line has already been reconciled, the statement lines page will display the name of the corresponding account. Clicking the pencil icon next to the name of the corresponding account will open the transaction editor for the corresponding journal transaction.
It is not currently possible to reconcile a single statement line to more than one corresponding account using multiple postings. It is suggested to first reconcile the statement line to one account, then open the transaction editor and edit the postings as required.
If there is a transfer between two accounts and both statements have been imported, there will be one imported statement line per account. To reconcile both statement lines as a single transfer between the two accounts, select the checkboxes to the left of the statement lines, and click Reconcile selected as transfer.
Balance assertions
The balance assertions allows the expected balance of an account at a particular time to be specified, and DrCr will confirm whether (or not) the account has the expected balance at that time.
The balance assertions page displays all existing balance assertions. The status of the balance assertion is displayed with a tick if the account has the expected balance, or a cross if it does not. To edit an existing balance assertion, click the pencil icon at the right-hand side of the table. To add a new balance assertion, click New assertion.
Chart of accounts
The chart of accounts page allows for accounts to be configured as particular types of accounts (asset, liability, equity, income, expense). To add a type to an account, select the checkbox to the left of the account name, choose the account type from the dropdown box, and click Add type. To remove a type from an account, select the checkbox to the left of the account name, choose the account type from the dropdown box, and click Remove type.
6. General reports
Functionality for generating common accounting reports is grouped within the ‘General reports’ panel of the main menu.
General ledger
The general ledger report displays all transactions posted to the journal. Unlike the journal page (see Journal) which shows only journals created through the journal feature or statement lines feature, the general ledger report also displays transactions generated programmatically via API. Navigating the general ledger report is otherwise similar to the journal page (see Journal).
Trial balance
The trial balance report displays the net balances of all accounts at the requested date. The date defaults to the end of financial year date specified at database creation.
Unlike the balance sheet and income statement reports, all accounts are displayed in the trial balance report, including accounts for which no account type has been configured in the chart of accounts (see Chart of accounts).
Balance sheet
The balance sheet report displays the balances of the asset, liability and equity accounts (see Chart of accounts) at the requested date. The date defaults to the end of financial year date specified at database creation. Current and previous year surpluses from the income statement will automatically be displayed under equity as Current Year Earnings and Retained Earnings.
A comparative balance sheet report can be generated using the ‘Compare’ option at the top right of the page.
If the compare unit is set to ‘years’, the report will be generated for the specified day and month in each financial year. If the specified day and month is not the end of the financial year, the resulting report will compare year-to-date figures in each financial year.
If the compare unit is set to ‘months’, the report will be generated for the specified day in each calendar month. If the specified day exceeds the number of days in a previous month, the date for that month will be set to the last day of the calendar month. For example, if the date is set to 29 May and ‘Compare 3 months’ is requested, the report will be generated for 29 May, 28 Feb and 29 Jan. However, as an exception, if the specified date is the last day of a calendar month, the dates for all comparative reports will also be set to the last day of the calendar month. For example, if the date is set to 30 Jun and ‘Compare 3 months’ is requested, the report will be generated for 30 Jun, 31 May and 30 Apr.
For comparative balance sheet reports, Current Year Earnings and Retained Earnings will show financial year-to-date figures in each requested period.
Income statement
The income statement report displays the balances of income and equity accounts (see Chart of accounts) for the period between two requested dates. The dates default to the financial year specified at database creation.
A comparative income statement report can be generated using the ‘Compare’ option at the top right of the page.
If the compare unit is set to ‘years’, the start and end dates of the report will each be shifted backwards by 1 calendar year for each comparison period. If the selected period is longer than 1 calendar year, the resulting report will include overlapping transactions in consecutive periods. If the selected period is shorter than 1 calendar year, the resulting report will have disjoint periods. The selected period should usually be set to 1 calendar year.
If the compare unit is set to ‘months’, the start and end dates of the report will each be shifted backwards by 1 calendar month for each comparison period. If the selected period is longer than 1 calendar month, the resulting report will include overlapping transactions in consecutive periods. If the selected period is shorter than 1 calendar month, the resulting report will have disjoint periods. The selected period should usually be set to 1 calendar month. If the specified start or end date exceeds the number of days in a previous month, the relevant date for that month will be set to the last day of the calendar month. For example, if the dates are set to 1–29 May and ‘Compare 3 months’ is requested, the report will be generated for 1–29 May, 1–28 Feb and 1–29 Jan. However, as an exception, if the specified end date is the last day of a calendar month, the end dates for all comparative reports will also be set to the last day of the calendar month. For example, if the dates are set to 1–30 Jun and ‘Compare 3 months’ is requested, the report will be generated for 1–30 Jun, 1–31 May and 1–30 Apr.
If the selected period is 1 calendar year and the compare unit is changed from ‘years’ to ‘months’, the selected period will automatically be changed to 1 calendar month ending on the original end date. Similarly, if the selected period is 1 calendar month and the compare unit is changed from ‘months’ to ‘years’, the selected period will automatically be changed to 1 calendar year ending on the original end date. The start date can be manually adjusted after changing the compare unit, if this is not the desired behaviour.