Using standard accounting terms and column order
I've used Moneydance happily for many years, and one of the things I love about it is its double-entry bookkeeping method.
However, it is a minor annoyance that some of the conventions used in Moneydance are the opposite of those in "standard" double-entry bookkeeping. For instance, in accounting, debits are always in the left column, and credits are always in the right column. But in Moneydance, the convention is the opposite: for instance, for Bank accounts and Assets in Moneydance, "Deposits" or "Increases" (which are Debits in standard accounting) are in the right column, while "Payments" and "Decreases" (which are Credits in standard accounting) are in the left column. Similarly, for Liabilities, Credit Cards, Income, and Expense accounts ("Categories" in Moneydance), the conventions are the opposite of standard accounting practices, in terms of column order. It seems an odd choice for software that is built, at its core, on principles of double-entry bookkeeping.
I realize that changing this convention might confuse users who are used to the current conventions in Moneydance, but I wonder if there could be a setting (e.g., in Preferences) to use standard accounting conventions for the column order, even using the terms Debit and Credit in place of the "Deposits", "Increases", etc. It's a feature I for one would really appreciate.
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1 Posted by dtd on 06 Jan, 2024 01:22 AM
The issue is that "standard" double entry accounting is always based on the banks' POV, not the customer's POV.
MD is a personal accounting system, from the customer's POV - so what to a bank is indeed as you say, from the customer's POV it is the opposite.
2 Posted by dwg on 06 Jan, 2024 01:36 AM
Moneydance applies the standard that bookkeeping is applied from the point of view of the person who owns the accounts.
I do not give a toss on what the bank thinks, it is my money.
3 Posted by clancyr on 06 Jan, 2024 01:01 PM
Different people may have different preferences, and it's true that many people find the terms "Debit" and "Credit" confusing and would not want to use them. But the principles of bookkeeping (e.g., the fact that a Debit increases an Asset account) apply whether you're a bank, a small business, or an individual with assets. For instance, these things are described on the Wikipedia page for Debits and Credits, or in any book on double-entry bookkeeping (e.g., Bookkeeping Made Simple, by David Flannery).
In any case, my suggestion is merely to have the option to use the column order that is standard for a ledger, with Debits on the left, Credits on the right, even if one doesn't use that terminology.
By the way, GnuCash is a nice program also focused on personal finance, and based on double-entry bookkeeping, that orders columns in the standard way, and has an option to use "formal accounting labels" (debits and credits) for those who prefer them. It would be nice if Moneydance had this too.
System closed this discussion on 06 Apr, 2024 01:10 PM.