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jmguyot

How to create a linked entry

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When you want to split a receipt, you can used a Linked entry. This way, your bank account is associated with the supplier for the total amount, and the reconciliation with your bank statement becomes greatly simplified since the account and the amount will match those on your bank statement.

Let’s suppose that you spent $100 at HEB and paid by check, and want to split your spending in 3 buckets, 60$ in groceries, $25 in DVDs and 15$ in various clothing:

  • First, make sure all the accounts you need exists. If one is missing (typically the supplier in case of a new one), go the the Structure tab and created it before entering the transaction.
  • Create a linked entry where the ressource account is your bank account Bank:Chase Checking and the tier account is your supplier account Supplier:HEB. Enter the amount in total.
  • Then, create one line per split entry, with the employ account being the destination account for the spending (for instance Purchases:Food).
  • BudgetInMind will compute the remaining amount to ensure you do not forget some pennies in the split.
  • Before pressing ‘Insert’, we recommend that you change the foreground text color to quickly pinpoint the entry in your book.

Once done, press “Insert” to add the book entry. You can then switch to the Budget and Account tabs to understand the effect of the split.

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jmguyot

How to set the initial balance of my bank account

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It is important to understand that bank accounts are part of your financial assets. It is an asset that you own. As in double-entry accounting, at least 2 accounts are modified per transaction, you must ask youself what is the dual account of your bank account in this instance.

It’s very simple. It is your Capital account. In fact, your bank accounts belong to you, and the account that represents you as a person is the Capital account.

Therefore, to set the initial balance of a bank account, you just need to enter a simple book entry where the employ is your bank account and the resource is your capital account. In other words, the wealth you saved over time is placed here in liquidity on your bank account.

Let’s suppose that you have a Checking account at Chase with an initial balance of $4,000. You then need to:

  •  Set the general parameters (date, etc..)
  • Set the amount to $4,000
  • Select Bank:Chase Checking as your employ account
  • Select Capital Funds:Capital as your resource account
  • You can also add a comment if you wish such as “Initial Balance”

If you want to set the initial balance of a credit card bank account, just do the same, but with a negative number that represents how much you owe your bank. Or leave a positive amount and switch the employ and resource accounts. It’s has you wish, both options are valid.

Now, if you go to the Budget tab and select the Balance Sheet view, you will clearly understand the operation. Likewise, you can check the initial balance of these 2 accounts in the Account tab.

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jmguyot

5 reasons why you should enter your transactions

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BudgetInMind aims at helping you understand your income and expense trends, get a good grasp at your assets and at what you owe. While the idea of mastering its own spending is a source of motivation, many of us struggle with the fact that, to reach this objective, one needs to enter transactions manually.

It is very important to remember that every commercial company controls its finances precisely, and manages the entry of its accounting data.

Why? Simply because bank errors are common, and you must verify what the bank tells you, not the reverse. You are in charge of your finance, not the bank.

Besides, bank statements, electronic or paper, only show the past, what has occurred. Any check not yet cashed, any future transfer you know about, etc. are not visible to the bank. Yet, this money is not yours anymore. You could also know of future large investments you plan to make (house renovation, purchase, vacations, …) for which you need to plan savings now. Again, the bank has no idea of your financial arbitration.

So in fact, to manage your finance properly, you first need to enter yourself your transactions into a financial application. You will then see exactly what you spend when you enter the data. Now, this does not mean that the process has to be tedious and time consuming.

BudgetInMind‘s user interface has been specially crafted to make the transaction entry a simple, effective and fast process.

The 5 good reasons are:

  1. Verify what the bank tells you, not the reverse.
  2. Know your financial situation before your bank.
  3. Manage proactively your accounts and anticipate to prevent overdrafts.
  4. Manage your forecast, set realistic & achievable goals.
  5. It by entering your accounts yourself that you really grasp what you spend and how.