Getting Started with GnuCash

7 min read


Gnucash 2.4 Small Business Accounting: Beginner’s Guide

Gnucash 2.4 Small Business Accounting: Beginner's Guide

Manage your accounts with this desktop financial manager application

How do I pronounce GnuCash?
Some people use the proper “Guh-noo-cash” and others prefer the easier “NewCash”. Go by whatever works for you.

Installing GnuCash on Windows

Before you can use GnuCash, you have to install it. We will walk you through the steps needed to get it installed successfully on your Windows PC, whether you have Windows 7, Vista, or XP.

Time for action – installing GnuCash on Windows

Let us go through the steps for downloading and installing GnuCash:

  1. GnuCash is an open source software developed by volunteers, often for their own use, and shared with the community. It can be downloaded for free. Download the latest stable release of the installer for Microsoft Windows XP/Vista/7 from the website. The file should have a name like gnucash-2.4.1- setup.exe. The size of the file should be about 90MB. Save the file to a convenient location on your PC, such as the Temp folder in your C drive.

    The GnuCash website will also have other development versions of the software. These are unstable and are for testing purposes only. These are not suitable for business use. Make sure you download the stable release.

  2. Launch the GnuCash setup program by double-clicking this file in Windows Explorer.

    Windows security might pop a message like The publisher could not be verified. Are you sure you want to run this software? or Do you want to allow the following program from an unknown publisher to make changes to this computer?. Click on Run or Yes to continue.

  3. The language selection dialog will appear with English already selected. Click on OK to continue.
  4. The Welcome screen of the GnuCash setup wizard will appear. Close any other application that may be running and click on Next.
  5. The License Agreement will appear. Select I accept the agreement and click on Next.
  6. The location dialog will show that GnuCash will be installed in C:Program Files gnucash. It will also tell you how much free space is required on your hard disk for installing the program (about 350 MB). Make sure you have the required free space and click on Next.

    On Windows 7, the default location will be C:Program Files (x86)gnucash.

  7. The next screen will show that a Full Installation will be done. Click on Next to continue.
  8. The next screen will show that a GnuCash folder will be created for the menu items. Click on Next to continue.
  9. The next screen will show that a desktop icon and a start menu link will be created. Click on Next to continue.
  10. The next screen is simply a recap of all the selections made by you so far. Click on Install to start the installation. This may take several minutes, giving you time for a coffee break.
  11. When the installation is completed successfully, you should see a window with the title Information. Click on Next to continue.
  12. Next, the Completing the GnuCash Setup Wizard window will appear. The Run GnuCash now box will be checked. Click on Finish to complete the installation. The GnuCash Tip of the Day will pop up. You can close this.
  13. You should see the Welcome to GnuCash window with Create a new set of accounts checked. We are going to do that soon. But for now, click on Cancel.
  14. Say No to the Display Welcome Dialog Again? question. You should see the Unsaved book – GnuCash window:

    Getting Started with GnuCash

What just happened?

Congratulations! You have just installed GnuCash successfully and you are ready to start learning, hands-on, how to use it.

Other operating systems

In addition to Windows, GnuCash runs on Mac OS X (on the newer Intel as well as the older Power PC) and several flavors of Linux. If you have one of those operating systems, you can download the install package and get installation instructions for those operating systems from the website.

Other download locations

In addition to the website, you can also download GnuCash from popular open source repositories such as SourceForge. Wherever you download from, be careful that you are downloading from a genuine site and that the download is free of viruses and malware.

But first, a tip to make your life easier with auto-save

Before we start the main show, here is a quick tip to make your life easier. GnuCash has a friendly feature to auto-save changes every few minutes. Some people find this very useful while entering transactions. However, at the time of going through the tutorial, you don’t want this auto-save to kick in. Why? You want to have some breathing time to recover from any errors and correct any mistakes and then save it at your convenience. It is even possible, heaven forbid, that you might want to abandon the changes instead of trying to rectify them. To do this, you might want to exit GnuCash without saving the changes. So, let us politely tell GnuCash, “STOP HELPING ME”!

Launch the GnuCash Preferences dialog from Edit | Preferences. Select the General tab. As shown in the following image, set the Auto-save time interval to 0 minutes. By setting this to 0, the auto-save feature is turned off. Also, uncheck the Show auto-save confirmation question, if it is checked. As we said, users have found that this ability to auto-save is a big life saver. So, don’t forget to turn this back on when you are done with the tutorials and start keeping your business books.

Taking the drudgery out of setting up accounts

Even the smallest of businesses may need as many as a hundred accounts. If your business is somewhat larger, you may need to create a lot more than a hundred accounts. Am I going to make you create that many accounts one by one?

No, I am going to show you how you can create the entire set of accounts needed for a typical small business in under a dozen clicks.

Time for action – creating the default business accounts

We are going to create the account hierarchy for our sample business, Mid Atlantic Computer Services (MACS). This will give you the hands-on feel to create accounts for your business, when you are ready to do that.

  1. Select from the menu File | New | New File. This will launch the New Account Hierarchy Setup assistant.

    GnuCash uses the term assistant to describe what you may have seen in other Windows applications called a wizard. Assistants help you perform tasks that are complex or not frequently performed. Assistants present you with a sequence of dialog boxes that lead you through a series of well-defined steps.

  2. Click on Forward to go to the Choose Currency screen.
  3. You will find that US Dollar is selected by default. You can leave it as it is and click Forward to go to the Choose accounts to create screen.
  4. You will find that Common Accounts is checked by default. This option is for users who want to set up personal accounts. We want to set up a business account. So, uncheck this and check Business Accounts, as shown in the next screenshot and then click on Forward:

    Getting Started with GnuCash

  5. In the Setup selected accounts screen, click on the Checking Account line and it will become highlighted. Click under the Opening Balance column in this line, a text box will appear allowing you to enter data. Enter an opening balance of 2000, as shown in the next screenshot, tab out, and click on Forward.

    Getting Started with GnuCash

  6. In the Finish Account Setup screen, click on Apply.
  7. With the previous step, the New Account Hierarchy Setup assistant has completed its job. You should now be back in the GnuCash main window showing the freshly minted set of accounts with the title Unsaved Book – Accounts.
  8. The Save As dialog should open. If it doesn’t, select File | Save As… change the Save in folder to your desired folder, put in the filename MACS without any extension, and click on Save As. If your screen looks like the following screenshot, you have now successfully created the default business account hierarchy for MACS:

    Getting Started with GnuCash

    Most Windows applications require you to save files with a 3 or 4 letter extension. Microsoft Word, for example, requires a .docx or .doc file extension. However, GnuCash uses the longer .gnucash extension. If you fill in the file name, GnuCash will automatically add the .gnucash extension.

What just happened?

There you are. With a small amount of effort, you have not only created a complete set of accounts that would be needed for a typical small business, but you have also learned how to enter opening balances as well. Now that we have that under our belt, let us discuss the key aspects of setting up accounts.

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