penny-bin-0.6.0.0: man/penny-basics.7

.TH penny-basics 1

.SH NAME
penny-basics - getting started with Penny

.SH PENNY IS DOUBLE-ENTRY ACCOUNTING

Penny is a double-entry accounting system. Other accounting systems
use double-entry principles--indeed, they are double-entry accounting
systems--but they do not use traditional double-entry accounting terms
such as
.I debit
and
.IR credit .
Or, they might use these terms, but not as they are used in a
traditional accounting sense. Unlike other systems, Penny does not try
to hide the details of double-entry accounting from you. Therefore,
you will need to have basic knowledge of double-entry accounting to
use Penny.

Ask yourself this question: what is a debit? If you said "it's what
happens when my bank charges me money," read "Learning about
double-entry accounting" below. If you said "left", then you're
probably ready to use Penny.

.SH LEARNING ABOUT DOUBLE-ENTRY ACCOUNTING

Since there are many great places to learn the basics of double-entry
accounting, I won't try to write about it here. Instead, here are some
places to look.

.IP \(bu
The Wikipedia article on double-entry accounting
(http://en.wikipedia.org/wiki/Double-entry_bookkeeping_system) is
good.

.IP \(bu
Principles of Accounting (http://www.principlesofaccounting.com/) is a
great free online text.

.IP \(bu
Or, go to your favorite bookseller and find a used textbook on
accounting. These can be had for less than ten U.S. dollars, including
shipping.

.SH THE penny PROGRAM

The
.B penny
program is Penny's most basic tool. It gives you reports on what you
have recorded in your
.IR ledger ,
which is simply a text file (or multiple files) containing your
financial transactions.
.B penny
will never modify the data in your ledger; you maintain it yourself by hand (or by using some of the other programs in the
.B penny
suite, such as
.BR penny-fit ,
which will modify this data for you under some circumsances.)

Examine the
.I starter.pny
file, located in the
.I examples
directory of the
.I penny-bin
package. It shows the basics of how to write a Penny ledger file. This
man page will use this file for examples. Please follow along by
typing some of the commands yourself and experiment on your own.

.SH HOW penny WORKS
First, some terminology. Your ledger file contains
.IR transactions .
Each transaction consists of at least two
.BR postings .
All the postings in a transaction must
.IR balance ;
that is, the sum of the debits for each commodity must equal the sum
of the credits for that commodity.
.B penny
first reads in all your transactions. All the transactions must be balanced; if they are not,
.B penny
quits with an error message. Then
.B penny
splits the transactions into postings. After that,
.B penny
deals only with the postings, and not with the transactions that they were a part of.

.B penny
then will discard some of the postings and keep others, depending on the
.I filter specification
that you give. You can also sort the postings; by default they are left in the order that they were in in the file. Then a
.I report
that you specify is shown. The reports have additional options that you may specify.

This is all more clear with some examples, so let's go!

.SH SEEING THE POSTINGS IN AN ACCOUNT

Let's say you want to see the postings in your checking account.

.EX
penny --account Assets:Checking postings starter.pny
.EE

does what you would expect. If you want to limit the postings to those
before or after a certain date, try one of these:

.EX
penny -a Assets:Checking --and -d '>=' 2012-12-06 postings starter.pny
.EE

.EX
penny -a Assets:Checking --and -d '>=' 2012=12-06 --and \\
  -d '<' 2012-12-11 postings starter.pny
.EE

As these examples show, you can use
.I -a
instead of
.IR --account ,
and
.I -d
instead of
.IR --date .
Also, options such as
.I -a
and
.I -d
are called
.IR operands .
If you use more than one operand, you must join them together using
.IR operators .
The operators available to you are
.IR "--not " , "--and " ", and " "--or" ,
in that order of precedence. Here is a more complicated example that
uses the various operators and operands:

.EX
penny -a Assets:Checking --and --open --payee 'Whole Foods' \\
  --or --payee Comcast --close --and --date '>=' 2012-12-01 --and \\
  --date '<' 2012-01-01 pos starter.pny
.EE

This example also shows that you can abbreviate the name of the
report; that is, instead of
.IR postings ,
you can say
.IR pos .
You can use the shortest unambiguous abbreviation, so you could even
simply say
.I p
as there is no other report that starts with a
.IR p .

On the far right side of each
.I postings
report is a running balance, like in a checkbook register. You may have noticed that in the examples above the running total reflects only the postings you saw in the report. Sometimes that is what you want. Other times you might want to see the total running balance, even as it is affected by the postings not shown in the report. To do this, include the filtering options
.B after
the word
.I postings
rather than before. Filtering options that are included before the word
.I postings
affect which postings are part of the report. Only postings that are part of the report affect the running balance. Filtering options
.B after
the word
.I postings
affect which postings are
.B shown
in the report. Postings that are part of the report but are not shown
still affect the running balance.

Here is an example:

.EX
penny --sort date -a Assets:Checking pos -d '>' 2012-12-10 \\
  starter.pny
.EE

This example introduces a new option,
.IR --sort .
You specify the field name on which you want to sort your postings. To
sort them in ascending order, use all lower case letters when
specifying the name of the field. To sort in descending order,
capitalize the first letter. By default, 
.B penny
does not sort your postings; it leaves them in the same order they
were in in your ledger file. If you want to see the running balance of
a report, it's important to make sure the postings are sorted in
chronologial order, either because you told
.B penny
to sort them or because you always keep your postings in chronological
order in your ledger file (I don't.)

Here we also see that you can use the
.I -d
option in place of
.IR --date .

.SH SEEING THE BALANCE OF AN ACCOUNT

To see the balance of your checking account, you could run

.EX
penny -a Assets:Checking pos --tail 1 starter.pny
.EE

and look at the running balance shown. This command included all the
postings in your checking account in the postings report, but it only
showed the last posting. (You could have used the UNIX
.B tail
program, but that will not always work well because sometimes a single
posting will take up more than one line on your screen.)

Another way to do it is with

.EX
penny -a Assets:Checking balance starter.pny
.EE

which shows the accounts hierarchically. The
.I balance
report is your friend if you want to see the balance of many accounts
at once.

.SH INCOME AND EXPENSES

How does your income compare to your expenses for a certain month?
Try:

.EX
penny --open --account-level 0 Income --or --account-level 0 Expenses \\
  --close --and -d '>=' 2012-12-01 --and -d '<' 2013-01-01 \\
  balance starter.pny
.EE

The
.I --account-level
operand takes two arguments. The first one is the number of the sub-account you wish to match. For instance, the account
.I Expenses:Food
has two sub-accounts: the first,
.IR Expenses ,
is numbered 0, and the second,
.IR Food ,
is numbered 1. The second argument to
.I --account-level
is the pattern you wish to use. All matching accounts will be part of your
.I balance
report. The result of this command shows your total expenses and total income, and the difference between the two is shown on the top
.I Total
line. (You don't have to use the
.I --account-level
operand, but it is more precise in this instance. Even more precise
would have been to specify
.I --exact
at the beginning of the command line. Without
.IR --exact ,
a pattern matches if the pattern you specify is found anywhere within
the target text.)

.SH BALANCING YOUR CHECKBOOK

Or, that fun task also known as "reconciling your account." First you
want to make sure that the reconciled balance of your checking account
is the same as what the bank says it was:

.EX
penny -a Assets:Checking --and --flag R bal starter.pny
.EE

Compare this total against the opening balance shown on your bank
statment. If they match, good. If not, figure out why and fix it
before proceeding. Then, find each posting shown on your bank
statement in your ledger. Add a
.I C
flag to each posting. After you have found all the bank's postings in
your ledger, run this:

.EX
penny -a Assets:Checking --and --open --flag R --or --flag C --close \\
  bal starter.pny
.EE

The balance shown should match what is on your bank statement. If not,
make sure you have matched up all the bank's postings with a posting
in your file, and make sure the bank's amount matches your amount. You
can easily see which postings you have just marked as cleared with:

.EX
penny -a Assets:Checking --and --flag C pos stater.pny
.EE

Once the balances match up, use your text editor or
.BR penny-reconcile (1)
to change the
.I C
flags to
.I R
flags.

.SH WHAT'S YOUR NET WORTH?

Try

.EX
penny -a Assets --or -a Liabilities balance starter.pny

.SH COLORS

Output from
.B penny
is easier to read when it's colorful.
.B penny
can use up to 256 colors on your terminal. Just make sure that your
.I TERM
environment variable is set to a terminal that supports 256 colors. I use
.BR xterm (1),
which supports 256 colors, but by default
.B xterm
sets the
.I TERM
environment variable to
.IR xterm ,
which only supports 8 colors. To make
.B xterm
set the
.I TERM
environment variable to one that supports 256 colors, I have the following text in my
.I ~/.Xresources
file:

.EX
XTerm*termName: xterm-256color
.EE

After running

.EX
xrdb -merge ~/.Xresources
.EE

and launching a new
.BR xterm ,
the new setting should take effect. It's likely your operating system
is already set up to automatically merge your
.I ~/.Xresources
file when you launch an X session.

If you don't like colors, use
.IR "--scheme plain" .
By default,
.B penny
does not use colors if its standard output is not a terminal, though you can override this with
.IR --color-to-file=yes .
This can be useful if you are sending output to a pager such as
.BR less (1)
and you want to see colors (with
.BR less ,
you will want to use the
.I -R
option.)

.SH WHERE TO GO FROM HERE

This is enough to get you started with
.BR penny .
If you want to know more, see
.BR penny (1),
which is an exhaustive reference. Also, see
.BR penny-suite (7),
which lists all Penny programs and documentation.