Plain Text Accounting With the ledger Ecosystem - Ohio Linuxfest 2017

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.

Transcript

1. #plaintextaccounting plaintext accounting Double-entry accounting using the ledger ecosystem @colindean 1
2. #plaintextaccounting My words are my own and not that of any of my employers, past, present, or future, nor representative of any project of any nature mentioned herein. 2
3. #plaintextaccounting Please hold your questions until the end. 3
4. #plaintextaccounting Please sit close. 4 If you can’t read this line, you’re probably too far away.
5. #plaintextaccounting plaintext accounting Double-entry accounting using the ledger ecosystem @colindean 5
6. About Me Colin Dean Software Engineer & Community Builder 6
7. #plaintextaccounting Experience with ledger 2012 - 2014 Timetracking & Cryptocurrencies 7
8. #plaintextaccounting Experience with ledger 2016 Paid Time Off 8 https://github.com/colindean/pto-tracker
9. #plaintextaccounting Experience with ledger 2017 Personal & non-profit accounting 9
10. #plaintextaccounting Agenda • Why accounting? • Double-entry accounting • Why Ledger? • Ledger format and its tools • Tricks 10
11. #plaintextaccounting Why accounting? 11
12. #plaintextaccounting To know what you have 12
13. #plaintextaccounting What you can access immediately + What others owe you - What you owe others What you have 13
14. #plaintextaccounting Benefits of tracking • Know what you • have across all accounts • had at some point in the past • owe and are owed • can spend 14
15. #plaintextaccounting Legally required for most businesses 15
17. #plaintextaccounting Double-entry accounting • Terminology • Account • Debit • Credit • Transaction 17
18. #plaintextaccounting A label describing an amount of something Account (even if that amount is 0) 18
19. #plaintextaccounting Five common categories of accounts 19 (for personal finance)
20. #plaintextaccounting 20 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
21. #plaintextaccounting Equity 21 For everything else, there’s Opening Balances Cashback Untrackable errors
22. #plaintextaccounting The addition of value to an account Credit 22
23. #plaintextaccounting The deduction of value from an account Debit 23
24. #plaintextaccounting A collection of credits and debits with a timestamp to describe when the transaction is effective Transaction 24
25. #plaintextaccounting One transaction Credit Debit Deduct from accounts Add to accounts 25
26. #plaintextaccounting Double-entry accounting Transaction Credit Debit 26
27. #plaintextaccounting Double-entry accounting Transaction Credit Debit Credit Debit 27
28. #plaintextaccounting Balance transactions Credit Debit 0 28
29. #plaintextaccounting Balance transactions Credit Debit 0 -100 + 100 = 0 29
30. #plaintextaccounting Balance transactions Credit Debit 0 -100 523 -252 15 -186 -538 + 538 = 0 Johnny Susie Naga Bank Wallet 30
31. #plaintextaccounting Transactions must always be balanced 31
32. #plaintextaccounting Programs 32
33. #plaintextaccounting 33
34. #plaintextaccounting 34
35. #plaintextaccounting 35 “YNAB”
36. #plaintextaccounting 36 GNUCASH NU ASH
37. #plaintextaccounting ledger 37
38. 38 https://en.wikipedia.org/wiki/Comparison_of_accounting_software
39. 39 https://en.wikipedia.org/wiki/Comparison_of_accounting_software
40. #plaintextaccounting Why ledger? 40
41. #plaintextaccounting Manual entry • Intimate knowledge of every transaction • Envelopes are cash only • Bank exports are card and check only 41
42. #plaintextaccounting Track everything. • USD? Commodity. • BTC? Commodity. • VSTAX? Commodity. • TSLA? Commodity. • House? Commodity. 42
43. #plaintextaccounting It’s just text. • Manual typing is worst case scenario. • No special editor required. • Give it to your accountant! 43
44. #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 44
45. #plaintextaccounting Ledger format • Timestamp • Payee • Accounts with positive numbers for credit • Accounts with negative numbers for debit • Optional: comments 45
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 -3.00
50. 50 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
51. 51 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
52. 52 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet -3.00
53. 53 2017-06-26 Commonplace Coffee Expenses:Restaurants:Coffee 3.00 Assets:Cash:Wallet
54. 54 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
55. 55 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
56. 56 2017-06-27 Commonplace Coffee ; cold brew Expenses:Restaurants:Coffee 3.00 Liabilities:CreditCards:Costco
57. 57 2017-06-30 Spacely Sprockets ; payday! Income:SpacelySprockets -2000.00 Assets:Cash:Bank:Checking 2000.00
58. 58 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 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
60. 60 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
61. #plaintextaccounting Running ledger 61
62. 62 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
63. 63 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
64. 64 ledger -f exercise1.ledger accounts Assets:Cash:Bank:Checking Assets:Cash:Bank:Savings Equity:OpeningBalances Expenses:Restaurants:Coffee Income:SpacelySprockets Liabilities:CreditCards:Costco
65. 65 ledger -f exercise1.ledger payees Commonplace Coffee Opening Balances Spacely Sprockets Transfer to Savings
66. 66 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
67. 67 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
68. #plaintextaccounting balance and register alone aren’t that useful 68
69. #plaintextaccounting Expenses minus Income Positive means that expenses are higher than income. Cashflow 69
71. 71 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
72. #plaintextaccounting Assets minus Liabilities Net worth 72
74. #plaintextaccounting As of 2014, ~50% of Americans have zero net worth 74 https://www.marketplace.org/2014/04/21/wealth-poverty/about-half-america-has-zero-net-wealth
75. 75 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
76. #plaintextaccounting Commodities 76
77. 77 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
78. 78 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
79. 79 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
80. 80 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
81. 81 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
82. 82 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
83. 83 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
84. 84 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
85. 85 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
87. #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 87
88. #plaintextaccounting Other features • Budgeting • Forecasting • Timekeeping 88
89. #plaintextaccounting Budgeting • Periodic transactions • Command line options • --budget • --add-budget • --unbudgeted 89
90. 90 ~ 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
91. 91 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
92. 92 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
93. #plaintextaccounting Forecasting • Constantly apply periodic transactions to see future value of accounts 93
94. 94 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
95. #plaintextaccounting Time Keeping 95
96. 96 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
97. 97 ledger -f timekeeping.ledger bal 6.71h CodeAndSupply 15.0m Email [Uptime Sponsorship] 6.46h Talks [Plain Text Accounting] -------------------- 6.71h
98. 98 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
99. 99 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
100. #plaintextaccounting Other features • Query language - mostly regex but some others • Python integration - web-based entry and scripting 100
101. #plaintextaccounting ledger-cli.org 101 ledger-cli.org/docs.html
102. #plaintextaccounting Ecosystem 102
103. #plaintextaccounting #plaintextaccounting 103
104. #plaintextaccounting plaintextaccounting.org 104
109. 109 Treemap of my 2017 Expenses in Fava, the web UI for Beancount
111. #plaintextaccounting Takeaways • Accounting informs us of how much we have. • Bookkeeping is the practice of tracking transactions. • Double-entry accounting requires balanced transactions. 111
112. #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. 112
113. #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. 113
114. #plaintextaccounting Is ledger the best? 114
116. #plaintextaccounting Use the best tool for you 116
117. #plaintextaccounting Go forth and save! 117
118. #plaintextaccounting Attributions • Rich Uncle Pennybags © Hasbro. Artist unknown. • Logos are property of respective and obvious owners. 118
119. @colindean 119
120. #plaintextaccounting plaintextaccounting.org 120 /r/plaintextaccounting @LedgerTips irc://chat.freenode.net/ledger http://j.mp/plaintextaccounting- ohiolinuxfest-2017