We found some late breaking problems with Money Smith that affect the year:
Bugs corrected earlier include: Download the latest updates here!
Money Smith is a double entry accounting system. This means that all transactions come from an account and go to another account. This confuses many first time users since most popular personal finance packages only support single entry checkbook style entry. Some examples are included below to clarify common transactions.
In double entry accounts, all account types are not treated the same. Asset, Liability and Equity accounts show a snapshot of current balances, while income and expense accounts show the flow of money over the current accounting period. Income represents a flow of money to yourself or your business from somewhere else, and expenses represent a flow from yourself or your business to someone else. Asset, Liability and Equity accounts have starting balances, representing the balance of these accounts when you began using Money Smith. Expense and Income accounts do not have starting balances because they represent flows of money. Instead they have budgets so you can establish a baseline for monthly income and expenses. The difference between income and expenses each month is the net gain or loss for yourself or your business.
"What account do I post income from?" - Income is the flow of money from somewhere else to you or your business. The easiest way to handle income is to create appropriate "Income" type accounts that represents sources of income. For example, a weekly paycheck would be posted from a Paycheck (income) account to your Checking (asset) account if you have direct deposit. Other types of income might be posted to other income accounts. For example, you might post income earned from a part time business as coming from a "Sales" (income) account, rather than your Paycheck account.
How do I enter credit card transactions? - Credit card accounts are properly entered as liabilities. When you make a purchase on a credit card you should enter a transaction from the Credit Card (liability) to the appropriate expense account for the purchase. When you pay your credit card bill you post a transaction from your Checking (asset) account to the Credit Card (liability) account. Interest fees should be posted to an interest expense account.
Why can't I enter a monthly budget for the credit card? - A credit card is a liability, and not an expense. It is the items you buy with the credit card that you need to budget for, including the monthly interest expense. All of these items can be accounted for by adjusting the budgets for the expense accounts of the items you are budgeting. Budget for the expense of the items you purchase and interest expenses, and not the monthly card payment.
Top | Money Smith | WinSetup | Ordering | Windows Cyberport | Downloads | Mail to us