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I am a new Gcash user. I Installed Gcash and imported couple statements from my bank. It is all good except that I now have huge imbalances. And I do not know how to handle this. I looked around the web without much solution.

I am guessing that this happened because my bank statements did not go far enough so whatever is in the statements does not balance out.

What is the proper way to handle this? I can add some minus pluses some where but I do not know the proper way to do this.

  • By 'huge imbalances' do you mean that the accounts do not reconcile with what the bank is saying or that you have a huge amount in an account called 'Imbalance'? For the latter you'd need to change the transactions to say where they go to - for example a transaction might be for Expenses:Groceries. For the former the answer below about Equity:Opening Balance is probably what you need. – verdammelt Nov 19 '14 at 2:46
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The GnuCash manual has a page with examples of opening new accounts.

The tl;dr is: use the Equity:Opening Balance to offset your original amounts. The further explanation from the GnuCash page is:

4.7.2. Opening Balances

As shown earlier with the Assets:Checking account, the starting balances in an account are typically assigned to a special account called Equity:Opening Balance. To start filling in this chart of account, begin by setting the starting balances for the accounts. Assume that there is $1000 in the savings account and $500 charged on the credit card.

Open the Assets:Savings account register. Select View from the menu and check to make sure you are in Basic Ledger style. You will view your transactions in the other modes later, but for now let’s enter a basic transaction using the basic default style.

From the Assets:Savings account register window, enter a basic 2 account transaction to set your starting balance to $1000, transferred from Equity:Opening Balance. Remember, basic transactions transfer money from a source account to a destination account. Record the transaction (press the Enter key, or click on the Enter icon).

From the Assets:Checking account register window, enter a basic 2 account transaction to set your starting balance to $1000, transferred from Equity:Opening Balance.

From the Liabilities:Visa account register window, enter a basic 2 account transaction to set your starting balance to $500, transferred from Equity:Opening Balance. This is done by entering the $500 as a charge in the Visa account (or decrease in the Opening Balance account), since it is money you borrowed. Record the transaction (press the Enter key, or click on the Enter icon).

You should now have 3 accounts with opening balances set. Assets:Checking, Assets:Savings, and Liabilities:Visa.

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  • bhamby thanks but is still do not get it. I am not an accountant however I do not need an accountant either. I just want to manage my checking and saving accounts in GC. I am wondering if someone can give me clear directions on this. – yarun can Aug 27 '14 at 3:49
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This started as a comment but then really go too long so I am posting an answer:

@yarun, I am also using GnuCash just like you as a non-accountant. But I think it really pays off to get to know more about accounting via GnuCash; it is so useful and you learn a lot about this hundreds of years old double entry system that all accountants know. So start learning about 5 main accounts and debits and credits, imho. It is far easier than one can think.

Now the answer: even without balancing amounts exactly program is very useful as you still can track your monthly outgoings very well. Just make/adjust some reports and save their configurations (so you can re-run quickly when new data comes in) after you have classified your transactions properly. If I still did not know what some transactions were (happens a lot at first import) - I just put them under Expenses:Unaccounted Expenses - thus you will be able to see how much money went who knows where. If later you learn what those transactions were - you still can move them to the right account and you will be pleased that your reports show less unaccounted money.

How many transactions to import at first - for me half a year or a year is quite enough; once you start tracking regularly you accumulate more date and this becomes a non-issue. Reflecting that personal finance is more about behaviour than maths and that it is more for the future where your overview of money is useful.

Gnucash wil learn from import to import what transactions go where - so you could import say 1 or 3 month intervals to start with instead of a while year. No matter what - I still glance at every transaction on import and still sometimes petrol expense lands in grocery (because of the same seller). But to spot things like that you use reports and if one month is abnormal you can drill down to transactions and learn/correct things. Note that reports are easy to modify and you can save the report configurations with names you can remember. They are saved on the machine you do the accounting - not within the gnucash file. So if you open the file (or mysql database) on another computer you will miss your custom reports. You can transfer them, but it is a bit fiddly. Hence it makes sense to use gnucash on your laptop as that you probably will have around most often.

Once you start entering transactions into GnuCash on the day or the week you incur the expense, you are getting more control and it is perhaps then you would need the balance to match the bank's balance. Then you can adjust the Equity:Opening Balances to manipulate the starting sums so that current balances match those of your bank. This is easy.

When you have entered transactions proactively (on the day or the week) and then later do an import from bank statement the transactions are matched automatically and then they are said to be reconciled (i.e. your manual entry gets matched by the entry from your statement.)

So for beginning it is something like that. If any questions, feel free to ask. IMHO this is a process rather a one-off thing; I began once - got bored, but started again and now I find it immensely useful.

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  • I think that the "Expenses:Adjustment" account that's part of the default account hierarchy may be made for this purpose. But I'm guessing, really. – Wildcard Jul 29 '18 at 19:41
  • Yes, it looks like that really is its purpose: svn.gnucash.org/pipermail/gnucash-user/2008-April/024849.html – Wildcard Jul 29 '18 at 19:47
  • Yes, you are right. I use it to adjust on monthly basis. I think it is simply an account that can reflect any kind of untracked/hidden expenses and let you balance accounts. – r0berts Jul 30 '18 at 9:50
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I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books.

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