Plain Text Accounting with ledger and its ecosystem

Plain Text Accounting is the practice of maintaining a ledger in a format that values human readability, accountant auditability, and version control. The ledger-like ecosystem enables recording of purchases and transfers and investments, versioning of ledger-files to provide an audit trail, and performing analysis to produce registers, balance sheets, profit and loss statements, track billable time and paid time off, and lots of other reports. In this presentation, you’ll learn some basic accounting principals, ledger tool usage, and why you might choose plain text accounting over Quicken, QuickBooks, Mint.com, or You Need a Budget.

Colin Dean has been using plain text accounting tools for more than four years. He runs the fledgling /r/plaintextaccounting reddit and has contributed to the ledger-like ecosystem.

Transcript

1. #plaintextaccounting plaintext accounting Double-entry accounting using the ledger ecosystem @colindean 1
2. About Me Colin Dean Software Engineer & Community Builder 2
3. #plaintextaccounting Experience with ledger 2012 - 2014 Timetracking & Cryptocurrencies 3
4. #plaintextaccounting Experience with ledger 2016 Paid Time Off 4 https://github.com/colindean/pto-tracker
5. #plaintextaccounting Experience with ledger 2017 Personal and non-profit accounting 5
6. #plaintextaccounting Agenda • Why accounting? • Double-entry accounting • Why Ledger? • Ledger format and its tools • Tricks 6
7. #plaintextaccounting Why accounting? 7
8. #plaintextaccounting To know what you have 8
9. #plaintextaccounting What you can access immediately + What others owe you - What you owe others What you have 9
10. #plaintextaccounting Benefits of tracking • Know what you • have across all accounts • had at some point in the past • owe and are owed • can spend 10
11. #plaintextaccounting Legally required for most businesses 11
13. #plaintextaccounting Double-entry accounting • Terminology • Account • Debit • Credit • Transaction 13
14. #plaintextaccounting A label describing an amount of something Account (even if that amount is 0) 14
15. #plaintextaccounting Five common categories of accounts 15 (for personal finance)
16. #plaintextaccounting 16 Assets Income Liabilities Expenses Wallet Bank accounts Investments Loans credited Loans owed Mortgage Credit cards Student loans Paychecks Gifts received Interest Dividends Groceries Taxes Gifts given Donations
17. #plaintextaccounting Equity 17 For everything else, there’s Opening Balances Cashback Untrackable errors
18. #plaintextaccounting The addition of value to an account Credit 18
19. #plaintextaccounting The deduction of value from an account Debit 19
20. #plaintextaccounting A collection of credits and debits with a timestamp to describe when the transaction is effective Transaction 20
21. #plaintextaccounting One transaction Credit Debit Deduct from accounts Add to accounts 21
22. #plaintextaccounting Double-entry accounting Transaction Credit Debit 22
23. #plaintextaccounting Double-entry accounting Transaction Credit Debit Credit Debit 23
24. #plaintextaccounting Balance transactions Credit Debit 0 24
25. #plaintextaccounting Balance transactions Credit Debit 0 -100 + 100 = 0 25
26. #plaintextaccounting Balance transactions Credit Debit 0 -100 523 -252 15 -186 -538 + 538 = 0 Johnny Susie Naga Bank Wallet 26
27. #plaintextaccounting Transactions must always be balanced 27
28. #plaintextaccounting Programs 28
29. #plaintextaccounting 29
30. #plaintextaccounting 30
31. #plaintextaccounting 31 “YNAB”
32. #plaintextaccounting 32 GNUCASH NU ASH
33. #plaintextaccounting ledger 33
34. 34 https://en.wikipedia.org/wiki/Comparison_of_accounting_software
35. 35 https://en.wikipedia.org/wiki/Comparison_of_accounting_software
36. #plaintextaccounting Why ledger? 36
37. #plaintextaccounting Manual entry • Intimate knowledge of every transaction • Envelopes are cash only • Bank exports are card and check only 37
38. #plaintextaccounting Track everything. • USD? Commodity. • BTC? Commodity. • VSTAX? Commodity. • TSLA? Commodity. • House? Commodity. 38
39. #plaintextaccounting It’s just text. • Manual typing is worst case scenario. • No special editor required. • Give it to your accountant! 39
40. #plaintextaccounting Developer-friendly • Simple format to parse and construct • Versionable with meaningful diffs and audits • Standard developer tools for everything. • Syntax highlighting, continuous integration, etc 40
41. #plaintextaccounting Ledger format • Timestamp • Payee • Accounts with positive numbers for credit • Accounts with negative numbers for debit • Optional: comments 41
42. 42 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
43. 43 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
44. 44 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
45. 45 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
46. 46 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
47. 47 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
48. 48 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
49. 49 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet
50. 50 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
51. 51 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
52. 52 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
53. 53 2017-06-30 Spacely Sprockets ; payday! Income:SpacelySprockets -2000.00 Assets:Cash:Bank:Checking 2000.00
54. 54 2017-07-15 Spacely Sprockets ; payday! Income:SpacelySprockets -2000.00 Assets:Cash:Bank:Checking 2000.00 2017-07-15 Transfer to Savings Assets:Cash:Bank:Checking -100.00 Assets:Cash:Bank:Savings 100.00
55. 55 2017-07-30 Spacely Sprockets ; payday with taxes Income:SpacelySprockets -2735.00 Expenses:Taxes:Federal:EIT 459.00 Expenses:Taxes:Federal:FICA 192.00 Expenses:Taxes:State:EIT 84.00 Assets:Cash:Bank:Checking 2000.00
56. 56 2017-07-30 Spacely Sprockets ; payday with taxes Income:SpacelySprockets -2735.00 Expenses:Taxes:Federal:EIT 459.00 Expenses:Taxes:Federal:FICA 192.00 Expenses:Taxes:State:EIT 84.00 Assets:Cash:Bank:Checking 2000.00
57. #plaintextaccounting Running ledger 57
58. 58 2017-06-26 Opening Balances Assets:Cash:Bank:Checking 500.00 Assets:Cash:Bank:Savings 1500.00 Liabilities:CreditCards:Costco -61.25 Equity:OpeningBalances 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
 2017-07-15 Spacely Sprockets ; payday! Income:SpacelySprockets -2000.00 Assets:Cash:Bank:Checking 2000.00 2017-07-15 Transfer to Savings Assets:Cash:Bank:Checking -100.00 Assets:Cash:Bank:Savings 100.00
59. 59 ledger -f exercise1.ledger balance 4000 Assets:Cash:Bank 2400 Checking 1600 Savings -1938.75 Equity:OpeningBalances 3 Expenses:Restaurants:Coffee -2000 Income:SpacelySprockets -64.25 Liabilities:CreditCards:Costco -------------------- 0
60. 60 ledger -f exercise1.ledger accounts Assets:Cash:Bank:Checking Assets:Cash:Bank:Savings Equity:OpeningBalances Expenses:Restaurants:Coffee Income:SpacelySprockets Liabilities:CreditCards:Costco
61. 61 ledger -f exercise1.ledger payees Commonplace Coffee Opening Balances Spacely Sprockets Transfer to Savings
62. 62 ledger -f exercise1.ledger register 17-Jun-26 Opening Balances Assets:Cash:Bank:Checking 500 500 Assets:Cash:Bank:Savings 1500 2000 Liabilities:CreditCards:Costco -61.25 1938.75 Equity:OpeningBalances -1938.75 0 17-Jun-27 Commonplace Coffee Expenses:Restaurants:Coffee 3 3 Liabilities:CreditCards:Costco -3 0 17-Jul-15 Spacely Sprockets Income:SpacelySprockets -2000 -2000 Assets:Cash:Bank:Checking 2000 0 17-Jul-15 Transfer to Savings Assets:Cash:Bank:Checking -100 -100 Assets:Cash:Bank:Savings 100 0
63. 63 ledger -f examples.ledger balance 9547.97 Assets:Cash 9550.47 Bank 6436.35 Checking 3114.12 Savings -2.5 Wallet -3318.84 Equity:OpeningBalances 744 Expenses 9 Restaurants:Coffee 735 Taxes 700 Federal 500 EIT 200 FICA 35 State:EIT -6735 Income:SpacelySprockets -238.13 Liabilities:CreditCards:Costco -------------------- 0
64. #plaintextaccounting balance and register alone aren’t that useful 64
65. #plaintextaccounting Expenses minus Income Positive means that expenses are higher than income. Cashflow 65
67. 67 ledger -f examples.ledger balance ^Income ^Expenses 744 Expenses 9 Restaurants:Coffee 735 Taxes 700 Federal 500 EIT 200 FICA 35 State:EIT -6735 Income:SpacelySprockets -------------------- -5991
68. #plaintextaccounting Assets minus Liabilities Net worth 68
70. #plaintextaccounting As of 2014, ~50% of Americans have zero net worth 70 https://www.marketplace.org/2014/04/21/wealth-poverty/about-half-america-has-zero-net-wealth
71. 71 ledger -f examples.ledger balance ^Assets ^Liabilities 9547.97 Assets:Cash 9550.47 Bank 6436.35 Checking 3114.12 Savings -2.5 Wallet -238.13 Liabilities:CreditCards:Costco -------------------- 9309.84
72. #plaintextaccounting Commodities 72
73. 73 2017-07-01 Vanguard Assets:Cash:Bank:Checking -1000 USD Assets:Investments:Vanguard:RothIRA 8.03535 VTI @ 124.45 USD 2017-07-16 Vanguard Assets:Cash:Bank:Checking Assets:Investments:Vanguard:RothIRA 0.90535 VTI @ 125.56 USD
74. 74 2017-07-01 Vanguard Assets:Cash:Bank:Checking -1000 USD Assets:Investments:Vanguard:RothIRA 8.03535 VTI @ 124.45 USD 2017-07-16 Vanguard Assets:Cash:Bank:Checking Assets:Investments:Vanguard:RothIRA 0.90535 VTI @ 125.56 USD
75. 75 P 2017/07/01 16:00:00 VTI 124.45 USD P 2017/07/03 16:00:00 VTI 125.75 USD P 2017/07/05 16:00:00 VTI 128.89 USD P 2017/07/07 16:00:00 VTI 139.66 USD P 2017/07/09 16:00:00 VTI 133.45 USD P 2017/07/11 16:00:00 VTI 128.58 USD
76. 76 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/2 0 Assets -1000 USD Cash:Bank:Checking 1000 USD Investments:Vanguard:RothIRA -------------------- 0
77. 77 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/4 10 USD Assets -1000 USD Cash:Bank:Checking 1010 USD Investments:Vanguard:RothIRA -------------------- 10 USD
78. 78 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/4 10 USD Assets -1000 USD Cash:Bank:Checking 1010 USD Investments:Vanguard:RothIRA -------------------- 10 USD
79. 79 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/6 36 USD Assets -1000 USD Cash:Bank:Checking 1036 USD Investments:Vanguard:RothIRA -------------------- 36 USD
80. 80 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/8 122 USD Assets -1000 USD Cash:Bank:Checking 1122 USD Investments:Vanguard:RothIRA -------------------- 122 USD
81. 81 ledger -f exercise2.ledger --price-db exercise2.pricedb bal -V --end 7/10 72 USD Assets -1000 USD Cash:Bank:Checking 1072 USD Investments:Vanguard:RothIRA -------------------- 72 USD
83. #plaintextaccounting Other transaction features • Virtual transactions - ledger within an account • Stock lot pricing - designate basis or lot date • Command directives - default accounts, etc. • Balance assertions - declare a balance at a date • Asset allocation - see bond/equity allocation 83
84. #plaintextaccounting Other features • Budgeting • Forecasting • Timekeeping 84
85. #plaintextaccounting Budgeting • Periodic transactions • Command line options • --budget • --add-budget • --unbudgeted 85
86. 86 ~ Monthly Expenses:Restaurants:Coffee 30.00 USD Expenses:Restaurants:Lunch 100.00 USD Expenses:Coworking 50.00 USD Expenses:Groceries 600.00 USD Expenses:Phone 100.00 USD Expenses:House:Utilities 150.00 USD Liabilities:Mortgage 600.00 USD Expenses:Movies 50.00 USD Expenses:Auto:Insurance 150.00 USD Expenses:Auto:Gasoline 120.00 USD Expenses:Taxes 3000.00 USD Expenses 200.00 USD ; all other expenses Assets
87. 87 2017-06-01 Mortgage Liabilities:Mortgage 580.00 USD Assets:Cash:Bank:Checking 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 USD Assets:Cash:Wallet 2017-06-26 Whole Foods Expenses:Restaurants:Lunch 15.00 USD Liabilities:CreditCards:Costco
88. 88 ledger -f exercise3.ledger --monthly register --add-budget -p "june 2017” 17-Jun-01 - 17-Jun-30 Assets 4567.00 USD 4567.00 USD Expenses -200.00 USD 4367.00 USD Expenses:Auto:Gasoline -120.00 USD 4247.00 USD Expenses:Auto:Insurance -150.00 USD 4097.00 USD Expenses:Coworking -50.00 USD 4047.00 USD Expenses:Groceries -600.00 USD 3447.00 USD Expenses:House:Utilities -150.00 USD 3297.00 USD Expenses:Movies -50.00 USD 3247.00 USD Expenses:Phone -100.00 USD 3147.00 USD Expenses:Restaurants:Coffee -27.00 USD 3120.00 USD Expenses:Restaurants:Lunch -85.00 USD 3035.00 USD Expenses:Taxes -3000.00 USD 35.00 USD Liabilit:CreditCards:Costco -15.00 USD 20.00 USD Liabilities:Mortgage -20.00 USD 0
89. #plaintextaccounting Forecasting • Constantly apply periodic transactions to see future value of accounts 89
90. 90 ledger -f exercise3.ledger --forecast "T>{\$-500.00}" register ^assets ^liabilities 17-Jun-01 Mortgage Liabilities:Mortgage 580.00 USD 580.00 USD Assets:Cash:Bank:Checking -580.00 USD 0 17-Jun-26 Commonplace Coffee Assets:Cash:Wallet -3.00 USD -3.00 USD 17-Jun-26 Whole Foods Liabilit:CreditCards:Costco -15.00 USD -18.00 USD 17-Jul-30 Spacely Sprockets Assets:Cash:Bank:Checking 2000.00 USD 1982.00 USD 18-Jan-01 Forecast transaction Assets -2300.00 USD -318.00 USD 17-Aug-01 Forecast transaction Liabilities:Mortgage 600.00 USD 282.00 USD 17-Aug-01 Forecast transaction Assets -5150.00 USD -4868.00 USD 17-Sep-01 Forecast transaction Liabilities:Mortgage 600.00 USD -4268.00 USD 17-Sep-01 Forecast transaction Assets -5150.00 USD -9418.00 USD
91. #plaintextaccounting Time Keeping 91
92. 92 i 2017/06/23 09:15:00 CodeAndSupply:Talks [Plain Text Accounting] o 2017/06/23 10:00:00 i 2017/07/09 20:15:00 CodeAndSupply:Talks [Plain Text Accounting] o 2017/07/10 00:06:48 i 2017/07/11 22:00:00 CodeAndSupply:Email [Uptime Sponsorship] o 2017/07/11 22:15:00 i 2017/07/11 22:15:00 CodeAndSupply:Talks [Plain Text Accounting] o 2017/07/12 00:06:00
93. 93 ledger -f timekeeping.ledger bal 6.71h CodeAndSupply 15.0m Email [Uptime Sponsorship] 6.46h Talks [Plain Text Accounting] -------------------- 6.71h
94. 94 ledger -f timekeeping.ledger bal —end 5/13 10.00h Away 1.00h DoctorAppt 9.00h Vacation 18.00h Billable 17.25h Development [Front end] 45.0m Meeting 7.00h Nonbillable:Training -------------------- 35.00h
95. 95 ledger -f timekeeping.ledger reg --end 5/13 17-May-09 (Billable:Meeting) 45.0m 45.0m 17-May-09 (B:Development [Front end]) 8.25h 9.00h 17-May-10 (B:Development [Front end]) 9.00h 18.00h 17-May-11 (Away:Vacation) 9.00h 27.00h 17-May-12 (Nonbillable:Training) 7.00h 34.00h 17-May-12 (Away:DoctorAppt) 1.00h 35.00h
96. #plaintextaccounting Other features • Query language - mostly regex but some others • Python integration - web-based entry and scripting 96
97. #plaintextaccounting ledger-cli.org 97 ledger-cli.org/docs.html
98. #plaintextaccounting Ecosystem 98
99. #plaintextaccounting #plaintextaccounting 99
100. #plaintextaccounting plaintextaccounting.org 100
105. 105 Treemap of my 2017 Expenses in Fava, the web UI for Beancount
107. #plaintextaccounting Takeaways • Accounting informs us of how much we have. • Bookkeeping is the practice of tracking transactions. • Double-entry accounting requires balanced transactions. 107
108. #plaintextaccounting Takeaways • There are many tools. • ledger is the most well-known plain text accounting tool. • There is a whole ecosystem and community around it. 108
109. #plaintextaccounting Takeaways • Text lends itself to easier management. • Manual entry may seem tedious but it enables intimate knowledge of one’s finances. • Use the tools you know to manage your finances. 109
110. #plaintextaccounting Is ledger the best? 110
112. #plaintextaccounting Use the best tool for you 112
113. #plaintextaccounting Go forth and save! 113
114. #plaintextaccounting Attributions • Rich Uncle Pennybags © Hasbro. Artist unknown. • Logos are property of respective and obvious owners. 114
115. @colindean 115
116. #plaintextaccounting plaintextaccounting.org 116 /r/plaintextaccounting @LedgerTips irc://chat.freenode.net/ledger http://j.mp/plaintextaccounting-codeandsupply-2017