How to properly model shared expenses and rent with Gnucash?
I share my flat with two other people and am currently having issues properly modelling the account hierarchy for our use case. Our intention is mostly to have a good overview about who-paid-what and we do not need to generate any reports to tax offices, banks or something like that. However, we have agreed on a few constraints and I would like to have them represented in our accounts hierarchy:
We have a collective bank account
We pay our individual, monthly rents (that happen to be the same amount for everyone) into this account
We pay the owner the monthly rent from this account, as well as our electricity and internet provider etc.
If we decide we need something (e.g. most recently a printer) we also pay that from this account. For stuff like this our individual monthly payments are calculated with a small buffer in mind such that we usually have around 200 euros extra in our account.
We share all our food and beverages
We collect all the receipts when somebody buys something
We want to be able to see whether someone is paying significantly more/less then the others
We have a dog. However, he is owned by two of us and only those two pay the dog's expenses
We want to keep the rent stuff separate from e.g. food
I set up the following account hierarchy which mostly does what we want:
Accounts view in Gnucash
Or, extracted to CSV:
type,full_name,name,code,description,color,notes,commoditym,commodityn,hidden,tax,placeholder
ASSET,Accounts,Accounts,,Bank accounts & cash,,,EUR,CURRENCY,F,F,T
ASSET,Accounts:Cash,Cash,,,,,EUR,CURRENCY,F,F,F
BANK,Accounts:Bankaccount,Bankaccount,,,,,EUR,CURRENCY,F,F,F
RECEIVABLE,Rentaccounts,Rentaccounts,,,,,EUR,CURRENCY,F,F,F
RECEIVABLE,Rentaccounts:Person1,Person1,,,,,EUR,CURRENCY,F,F,F
RECEIVABLE,Rentaccounts:Person2,Person2,,,,,EUR,CURRENCY,F,F,F
RECEIVABLE,Rentaccounts:Person3,Person3,,,,,EUR,CURRENCY,F,F,F
PAYABLE,Other,Other,,,,,EUR,CURRENCY,F,F,T
PAYABLE,Other:Person1,Person1,,,,,EUR,CURRENCY,F,F,F
PAYABLE,Other:Person2,Person2,,,,,EUR,CURRENCY,F,F,F
PAYABLE,Other:Person3,Person3,,,,,EUR,CURRENCY,F,F,F
INCOME,Income,Income,,,,,EUR,CURRENCY,F,F,T
INCOME,Income:Rent,Rent,,"The rent the room mates pay each month",,,EUR,CURRENCY,F,F,F
EXPENSE,Expenses,Expenses,,,,,EUR,CURRENCY,F,F,T
EXPENSE,Expenses:Rent,Rent,,"rent including gas, internet, electricity etc.",,,EUR,CURRENCY,F,F,F
EXPENSE,Expenses:Dog,Dog,,,,,EUR,CURRENCY,F,F,F
EXPENSE,Expenses:Food,Food,,,,,EUR,CURRENCY,F,F,F
EXPENSE,Expenses:Other,Other,,,,,EUR,CURRENCY,F,F,F
The main issue with this is that I don't know how I'ld separate the dog stuff (payed by Person1&2) from Expenses:Other and Expenses:Food (payed by all 3).
Does anyone have a good advice?
(1)1 Comments
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You appear to have set up the accounts as representing the finances of the household, with the 3 people being contributors of money to the household. I think that is a good approach. Your accounts hierarchy already has separate Accounts Receivable accounts for each person for rent contributions. Since you want to keep rent contributions separate from other expenses, I would suggest that you set up similar accounts for each person to cover general expenses (food, internet, electricity, dog expenses, etc.). These accounts might be called ContributionsRequired/Person1, ContributionsRequired/Person2, ContributionsRequired/Person3 or something similar, and should be of type Asset.
When a bill is paid (for example, the electricity bill that should be a shared expense) you can show the payment initially by crediting Accounts/Bankaccount and debiting Expenses/Other by the amount of the bill payment. To show that contributions are now due by the 3 residents for this expense, you can add a Split transaction that credits Expenses/Other by the amount of the bill and debits each of the ContributionsRequired/PersonX accounts by one-third of the bill amount.
When a bill is paid for Dog expenses, follow the same process but this time the split transaction will debit only the ContributionsRequired accounts of the two dog owners.
If one of the residents buys groceries for the household using their own money, this should be recorded by debiting the Expenses/Food account and crediting the individual's ContributionsRequired account. That amount in the Expenses/Food account should then be transferred in equal amounts (one-third each) to each of the three ContributionsRequired/PersonX accounts.
When a person makes a deposit in the shared bank account, debit Accounts/Bankaccount
and credit the relevant ContributionsRequired/PersonX account.
Each person should make sufficient payments to reduce their balance to zero in their ContributionsRequired/PersonX account. A high balance in a ContributionsRequired/PersonX account shows that person is not contributing their fair share towards expenses.
***** Side note on Rentaccounts.
Your account hierarchy seems to have the rent accounts for each person
set up as Accounts Receivable types. Unless you want to issue a
formal invoice to each person each month, my advice would be to not
use the Accounts Receivable functions of GnuCash - it's a complication
that's not necessary for a simple household model.
If it's not important to keep the rent contributions separate, you
could use the same ContributionsRequired accounts to include rent
owing as well.
You can also make decisions about whether you want to run your
accounts on an accrual basis or use cash accounting.
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