Basics Of Accounting

This is what I was referring to when I said you were not aware of the features of the program. Starting balance equity and Suspense accounts are both automatic, and they represent mistakes. Starting balance equity is how Manager balances the accounting equation until you properly set things up. Suspense is where the program stores incorrect, incomplete, or unbalanced entries until you fix them.

When your entries are correct, both accounts disappear.

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Can you post screenshot? I’m not able to reproduce this.

They disappear if you choose Exclude zero balances.

Let’s discuss later. It is 2:30 a. m. in Germany. Have a nice Day.

When the BS report format is A=L+E and zero balances are not suppressed, the Less: Liabilities group label is displayed. When zero balances are suppressed, the group is labeled Liabilities.

The Less: Liabilities is also converted to just Liabilities for the A-L=E option.

In other words, it isn’t A=L+E versus A-L=E. What controls is whether zero balances are suppressed.

I can reproduce it now. Fixed in the latest version (20.6.85). I have also removed Less prefix from Summary screen to keep it consistent since it’s not shown on reports.

I mean for those who are used to Assets = Liabilities + Equity formula it doesn’t really make sense to see it there anyway.

@JosefBrunner raises another point for consideration. On the Balance Sheet report, when zero balances are not suppressed, Starting balance equity and Suspense accounts are displayed, although they are zero. It seems perhaps these should be treated differently from other zero-balance accounts because—by being zero—they merely indicate everything is entered correctly. You might want to display other zero-balance accounts (such as a clearing account), yet have no reason for these to be on your balance sheet report. This is related to Make zero-balance Suspense account visible if transactions are present, in the ideas category.

You could eliminate ‘Less’ from the P&L Statement on the Summary page and the P&L Statement report too. :wink:

Less: prefix on P&L is required because top-level categories are not fixed. They can be named anything so Less: prefix is required to make it easier to follow the report. The case can be made that it should be an option to make it visible or not.

On Balance Sheet, top-level groups are fixed… it’s always Assets, Liabilities and Equity. For every business in the world.

It’s fine with me. However, like Liabilities are subtracted from Assets to obtain Equity, Expenses are always subtracted from Income to obtain Profit/Loss. :wink: But, again, it’s not important to me.

That’s not universal. Some parts of the world view Liabilities in this context: Assets = Liabilities + Equity

I agree that you should be able to deduct from group name on P&L whether it’s income or expense category. Less: prefix is probably always redundant.

@Mark, do not overlook the fact that the Less: prefix on the profit and loss statement is more than a group heading. When you check the Expenses box, Less: disappears, but the numbers in that group become negative.

I agree expense groups in a business should be readily identifiable but that depends on the user

  • Using Manager as it is designed to be used
  • Using group names readily identifiable as income or expense by another user or the same user at a later time.

Unfortunately I do not believe either of these assumptions will always be correct. And when they are not, Managers ease of use will be blamed.

Manager’s target market is not as an analytical tool for accountants. Small businesses operators/ owners are much more likely to buy it. As such basic accounting convention may not be well understood before using Manager.

I would prefer if less was left as the prefix to expense groups.

I just want to use my own chart of accounts (Kontenplan) without “Starting balance equity” (Startkapital) and “Suspense” (Übergangskonto). I do not need these accounts. Please give me the opportunity to delete them.

It is not necessary to display the expenses with a negative sign or in brackets. In double accounting are all values positive.

The accounting standards require a factual order in a general ledger (Hauptbuch) and a chronological order in a journal (Grundbuch, Journal).

It is possible to create a kind of a general ledger (Hauptbuch, Sachbuch) as a custom report for each account which includes a description (Buchungstext) and the values for debit (Soll) and credit (Haben). But the accounting standards also require the declaration of the counter account(s). This is not possible. Further wastes your display a lot of space.

It is possible to create a kind of a journal (Grundbuch, Journal) as a custom report. But your display wastes a lot of space too.

Then set things up properly. They will not appear on the Summary page and can be suppressed on the balance sheet and profit and loss statement. But you cannot delete them from the program because they are integral to the way it maintains balance in the accounting equation and preserves erroneous transactions, rather than discarding them, so they can be fixed.

No, it is not. That is a display convention chosen by the designer, and there is nothing wrong with it. You can also eliminate it, as has been discussed above. The fact you may have different display preferences does not make those used by the developer wrong.

This is the second time you have made this statement. It is misleading. Double-entry accounting has nothing to do with positive or negative numbers. It refers to balancing debits and credits in posts to (at least) two different accounts. How this is implemented in software usually involves choosing either debits or credits as positive and the other as negative. (It doesn’t matter which.)

Which accounting standards? Manager is used all around the world by businesses operating under many different standards. The program gives you many options for displaying data, including different ways of sorting and searching. In all my years as a moderator of this forum, you are the first to claim Manager cannot satisfy a requirement like this.

Yes it is.

Let’s not discuss graphic design.

With the new Reporting tool you can create easily an Account Daybook (what you call Journal) with all the additional fields you may need.

About the General Ledger Transactions Report (which we cannot still costumize due to the lack of starting and closing balance in the new Reporting Tool)… how can you list the counter account? I ask you because there can be 1.000 counter accounts vs the analyzed one. The Auditor asks both Daybook and GLT because only with the combination of the two you can get the answer.

About the negative value… it’s not necessary but it is usually done in order to have P&L summarised in just one column. From my experience (alternative investment funds) it is compulsory by law to have it in one column with signs.

In general, I think that you should think that Manager is an international software that has to face needs from all over the world and different types of businesses. So it is better not to stand as the depository of the verb of the accounting but try to dialogue and collaborate in a more polite way.

You are correct. They should be treated differently. Fixed in the latest version (20.6.89) so these accounts do not show even if report is set to not exclude zero balance lines.

I agree
Managers summary screen is arranged in this manner. It is because of this the running totals on the Profit and loss statement actually make sense. Conversely if the “Less:” was removed from expenses, then the running totals would be nonsense.

I agree
Again Managers summary screen is laid out it this manner. Using the labeling “Less Liabilities” makes this relationship obvious and maintains symmetry with the Profit and loss statement.

In my opinion removing the prefix “Less” from liabilities degrades the intuitive Manager user interface.

Manager has the ability to set the reporting format for individual reports in “Reports” → “(Financial Statements) Balance Sheet” as you illustrated. It does not have the ability to set this reporting option on the summary page, perhaps it should. However given it currently does not then maintaining consistency with the Profit and loss side of the summary page is more important in my opinion.

Agree
But for those who are using
Assets - (minus or less) Liabilities = Equity
It does make the report content clearer, particularly for those using Manager to maintain their accounts but not working as an accountant or when Liabilities happen to be negative.

Using the old heading

  • “Assets” “Less: Liabilities” = “Net assets”

Is clearer than the new report heading

  • “Assets” “Liabilities” = “Net assets”

Maybe for a NOOB but not for an accountant. I suggest you have a look at the Annual Report of a big co. like, e.g., Shell:

In the particular example you have shown there is only one income group labeled income followed by only one expense group labeled expense. While Manager does support this layout, many other more complex Profit & Loss groupings can also be usefully employed in Manager.

Then we agree.

The only remaining question is are most Manager users accountants, because it would be a pity if Manager evolved into a product you needed to be an accountant to use.

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I doubt that you’ve read this Income Statement correctly. There’s a Total revenue and other income, and Total expenditure. Both are the sum of several items. The difference is Income before taxation.

And Manager is an accounting software application so you need at least some basic accounting knowledge.