[Update on Sept. 5, 2009] After evaluating the alternatives, I discovered a way to automatically download the transactions and price quotes and feed them to Money after Microsoft pulls the plug. See follow-up posts Replacing Microsoft Money, Part 5: OFX Scripts and Download Price Quotes to Microsoft Money After Microsoft Pulls the Plug.
This is part 3 in my series for replacing Microsoft Money. I gave my requirements part 1 and I looked at Quicken in part 2. This time I’m looking at GnuCash.
GnuCash is a free, open source application. It works on Linux, Mac, and Windows. I tried the version 2.3.4 on Windows.
I can see GnuCash is designed by people with a solid accounting background. It started in 1997 as X-Accountant. In GnuCash, everything is an account and every transaction is a transfer. That’s how an accountant sees things.
To an accountant, there is no fundamental difference between a checking account and salary. The checking account is a balance sheet account. Salary is an income statement account. But they are both accounts. When you put your paycheck into your checking account, you transfer a balance from salary to the checking account — debit checking account, credit salary.
That’s exactly how it’s represented in GnuCash.
Figure 1: Assets, Liabilities, Income, and Expenses are all Accounts
This flexible approach works great for an accountant, but it can be confusing for others. I would rather refer to accounts with my name as “accounts,” income and expenses as “categories,” and investments in my brokerage account as “securities.”
When it gets to investment, it can be even more confusing. Every stock you buy in a brokerage account is also an “account” with a parent account. You can create child accounts within the brokerage account for whatever tracking purpose: stocks vs. mutual funds, domestic vs. international, large cap vs. small cap, serious investment vs. play money, short-term investments vs. long-term investments, etc.
Figure 2: Accounts nest n-levels deep
If you have a good grasp of double entry accounting concepts, GnuCash is great. The infinite level of nesting lets you create your accounts structure however you like. To a novice, there can be a steep learning curve, until you understand why everything is an account and why every transaction is a transfer between two accounts.
On Windows, GnuCash takes a long time to start because it has to load the gnome libraries. After it starts, it runs pretty fast.
Here’s a summary of what GnuCash can do against my requirements:
| Categorize transactions | x |
| Download transactions | x |
| Reconcile account balances | x |
| Track against budget | x |
| Allocate loan payments automatically | |
| Track investments | x |
| Download investment price quotes | x |
| Report Investment portfolio returns | |
| Report net worth over time | x |
There is no way to set up a loan and have it calculate loan payment principal and interest automatically. GnuCash provides a financial calculator for doing the calculation manually. The user can use the bank’s payment confirmation and enter a split transaction.
I did not see anything that calculates investment returns.
GnuCash also has some business features: customers, vendors, invoices, bills, etc. Because I don’t need these features, I did not test them.
Unless you use the business module, there isn’t a concept of a payee. If you want to see how much you paid AT&T over the last 12 months, you have to run a custom report off the free-text description in the register.
GnuCash can import QIF files. In Microsoft Money, you have to export to a QIF file one account at a time. I didn’t try the import because it’s too tedious with many accounts. It will likely create duplicate entries when there are transfers between accounts in Money. Fixing bad imports can be more time consuming than not importing at all.
If GnuCash were the only application on the market, I would use it. It’s very flexible for a power user. It’s great for a small business. It’s free and open source. Because it’s open source, chances are it will live on. For personal use, however, it’s not as user friendly as I’d like.
I will review Moneydance in my next post.
Say No To Management Fees
If you are paying an advisor a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.
Vasile says
Hi!
I also tried to use Gnucash, but it is extremely unstable for me. It kept crashing at different moments, but especially when importing MS Money data. Maybe it’s something on my computer, but I seriously doubt it since the rest of my apps rarely crash… I’m using the latest “stable” release 🙁
nvsoar says
For now I’ve settled on GnuCash as a Money replacement. Money Dance stopped working before I had all the data transferred so that evaluation was incomplete. Another candidate is Ace Money. Your comment?
Harry Sit says
nvsoar – After discovering I can use Money after Microsoft pulls the plug, I stopped looking for alternatives. See follow-up posts linked at the top. Someone says he will give me a copy of Quicken 2010. If that happens, I will give Quicken 2010 one more look.
Duane says
I liked the program. I spent some time getting used to it, but once I had my accounts set up, I was ready to go. I genuinely liked the program.
I spent about 3 hours converting stuff over and then noticed as I sorted columns values in entries changed AND I would start getting weird dates like “29/12/5678” for an entry that I know I entered for “12/29/09”.
Closed out of the program, reopened and had an error “parse file error” and was done. All my time is gone and frankly I cannot seem to find quality support.
My search continues.
Jay says
I disagree with your assessment that Gnucash is complicated. I’ve been using Qucken for over 15 years, but I got tired of having issues with my investment balances being always wrong, sometimes from a few dollars to a couple of thousand dollars. Oh and about the countless data corruption I had over the years and the endless update cycles, having to “pay” full price for each version. 🙂
In March 2010 I started to use Gnucash side by side with Quicken 2010. I can tell you that I’m very happy with the program. All my investment accounts balance almostto the penny, something that I could never achieved in the 15+ years of quicken usage. I never had a crash or data corruption yet.
GNUCASH allows you to change the settings to use more the more user friendly “Receive” and “Spend” labels, instead Debit and Credit, which may be confused for some folks out there. I also love the flexibility of being able to create and manipulate my own accounts any way I wish, contrary to Quicken which forces me to use their investment categories and does not allow me to create my own categories for Investment Income, for example.
The only thing GNUCASH lacks, in my opinion, is a better and more user friendly interface. I wish it had more eye candy, but as for the accuracy and flexibility Quicken does not come even close. My suggestion to users out there is: just give Gnucash a couple of months, run it side by side with Quicken and don’t be afraid of learning it. I bet you will love its capabilities.
So December 31st 2010 Quicken will be retired in my household. I mean, will still need to keep it around to read my old data, but nothing else.
Jay says
Duane, the parse error message more likely relates to having installed different versions of Gnucash without uninstalling the older one.
So give it a second chance, uninstall any versions you may have and install the most recent one.
Rich says
I have my mny files from Money which no longer works. Therefore, I cannot convert it to qif. Any ideas how else to convert mny to qif so I can use Gnucash as my new checkbook ledger?
Thank you for help.
Rich
nvsoar says
FWIW – MSMoney still works for me. GnuCash works well also. GnuCash imports .csv files as well as qif. ( I do not import financial statements; I do import stock prices for MSMoney and GnuCash.) Why bother to import an old data set which will still be available in MSMoney if need be? Set up the GnuCash account structure and use balances from MSMoney as a starting point. Be sure to thoroughly read all the GnuCash documentation! GoodLuck.