13 posts tagged with "finance"

At Beancount.io, we believe knowledge and numbers share a fundamental principle: when well-structured, they empower better decisions. Today, we’re excited to highlight BeFreed.ai, a San Francisco-based startup on a mission to make learning “simple and joyful in the age of AI.” For a community that appreciates turning complexity into clarity, BeFreed.ai offers a compelling new way to grow your knowledge base, especially in the realm of finance.

Why BeFreed.ai Caught Our Eye​

In a world of information overload, BeFreed.ai stands out by offering a powerful and efficient approach to learning. Here’s what impressed us:

• Minutes, not hours. The home page greets you with the promise to “Learn Anything, Joyfully, from the world’s best sources—in minutes.” For time-pressed founders, investors, and the finance-savvy individuals in our community, this is a game-changer. The platform distills dense content into actionable insights, respecting your most valuable asset: your time.

• Five Versatile Learning Modes. BeFreed.ai understands that learning is not a one-size-fits-all process. It offers five distinct modes to cater to your preferences and needs:

  • Quick Summary: Get the core ideas of a book or topic in a concise format.
  • Flashcards: Reinforce key concepts and test your knowledge through active recall.
  • Deep Dives: Immerse yourself in a comprehensive exploration of a subject.
  • Podcast Episodes: Learn on the go with engaging audio summaries.
  • Interactive Chat: Engage in a dialogue with the AI to clarify concepts and explore ideas as you learn.

• A Personal Knowledge Agent. BeFreed.ai’s intelligence goes beyond simple summarization. The platform’s AI acts as a personal knowledge agent, tailoring recommendations based on your interests and learning history. It doesn’t just suggest new content; it explains why a particular book or podcast is relevant to you, turning passive consumption into an active and personalized feedback loop.

• Cross-Device Freedom. Your learning journey shouldn't be confined to a single device. BeFreed.ai offers a native iOS app for a seamless mobile experience and an installable Progressive Web App (PWA) for Android and desktop users. While the outline mentioned CarPlay and Android Auto, current information primarily points to a strong mobile and web presence, perfect for learning during your commute or at your desk.

• A Growing and Expansive Library. While the initial outline mentioned over 10,000 summaries, recent reports indicate that BeFreed.ai now boasts a library of over 50,000 premium summaries. This vast collection spans critical topics for our community, including management, investing, mindset, and more, with new titles being added on a weekly basis.

Where It Helps Beancount Users​

The practical applications for the Beancount community are numerous and immediately apparent:

• Level-up Financial Literacy. Imagine finally tackling dense but crucial financial texts. From The Psychology of Money to Capital in the Twenty-First Century, BeFreed.ai transforms these tomes into bite-sized, digestible lessons that you can review and internalize before your next ledger-balancing session.

• Stay Curious While Reconciling. The often-quiet time spent running bean-doctor or reconciling accounts can now be a period of productive learning. Listening to a 20-minute BeFreed.ai deep-dive on behavioral economics or investment strategies is a surprisingly pleasant and enriching pairing.

• Team Knowledge Sharing. The platform’s features can foster a culture of learning within your team. Use flashcards as prompts for finance-team lunch-and-learns. Export key highlights and insights into your team’s documentation repository, much like you would export Beancount reports, to build a shared knowledge base.

Getting Started is Simple​

Ready to give it a try? Here are the first steps:

1. Visit befreed.ai and create a free account to explore the platform.
2. Dive in by searching for "personal finance" or "behavioral economics" and bookmark three titles that catch your eye.
3. After a week, test your retention with the flashcard review feature—you might be surprised at how much you remember.
4. For the full experience, consider the Premium plan, which unlocks the entire library and the full power of the personalized agent. Pricing is competitive, with a monthly plan at approximately $12.99 and more cost-effective quarterly and annual options available.

Closing Thoughts​

The greatest enemies of both effective money management and continuous learning are friction and complexity. BeFreed.ai is dedicated to removing the friction from learning, just as Beancount strives to remove the friction from bookkeeping—through clear, elegant structure and intelligent automation.

We encourage you to explore BeFreed.ai and see how it can complement your financial journey. Let us know what finance-oriented summaries you’d find most valuable. We’re already in conversation with their team, suggesting future additions like Accounting Made Simple and The Intelligent Investor.

Happy bean-counting—and happy learning!

Why the humble budget morphs into multi-currency treasury as an organisation grows

Personal-finance apps promise seven core jobs: seeing everything in one place, budgeting, tracking income and spend, paying debt, saving for big purchases, managing money with a partner and monitoring investments. The same needs re-appear in business—then multiply as head-count, regulators and investors enter the picture.

Micro & small businesses (solo-founder → ±50 employees)​

Extra jobs unique to small firms

• Payroll & benefits compliance (accurate, on-time filings).
• Sales-tax / VAT collection & remittance across states or countries.
• Basic risk cover (liability, cyber, key-person insurance).

Lower- & mid-market companies (≈ 50 – 500 employees, often multi-entity)​

• Department-level budgets plus rolling forecasts for FP&A.
• 13-week and 12-month cash-flow forecasting to protect covenant headroom ([eventusag.com][3]).
• Debt & equity portfolio management (term loans, venture debt, cap-table dilution).
• Multi-entity consolidation—inter-company eliminations and live FX re-measurement ([picus-capital.medium.com][4]).
• Internal controls & audit readiness (segregation of duties, SOX-lite).
• Vendor procurement & contract lifecycle monitoring.
• KPI dashboards for investors and lenders (EBITDA, ARR, DSO, working-capital days).

Large enterprise & global groups (500 + employees)​

Key take-aways for product builders​

• Same instincts, bigger stage – “show me everything” grows from a Mint-style dashboard into multi-ledger consolidation and treasury views.
• Cash is king at every tier – but the tooling jumps from spreadsheets to dedicated forecasting engines.
• Compliance balloons – payroll, tax, audit and ESG appear only in business contexts and dominate enterprise workloads.
• Stakeholders multiply – individuals coordinate with a partner; businesses juggle employees, suppliers, bankers, investors and regulators.

Understanding where a customer sits on this growth curve lets you prioritise features that move the needle—whether that’s instant cash-flow visibility for a café owner or cross-border liquidity pooling for a multinational.

Modern finance teams typically dedicate 65% of their time to manual reconciliation and data validation, according to McKinsey's 2023 research. At Beancount.io, we're witnessing teams slash their weekly review time from 5 hours to just 1 hour through AI-assisted workflows, while maintaining rigorous accuracy standards.

Plain text accounting already offers transparency and version control. By integrating advanced AI capabilities, we're eliminating tedious transaction matching, discrepancy hunting, and manual categorization that traditionally burden reconciliation processes.

Let's explore how organizations achieve substantial time savings through AI-powered reconciliation, examining technical foundations, real implementation stories, and practical guidance for transitioning to automated workflows.

The Hidden Cost of Manual Reconciliation​

Manual reconciliation resembles solving a puzzle with scattered pieces. Each transaction demands attention, discrepancies require investigation, and the process consumes valuable time. The Institute of Financial Operations and Leadership reports that 60% of accounting professionals spend over half their week on manual reconciliation.

This creates a cascade of challenges beyond just lost time. Teams face mental fatigue from repetitive tasks, increasing error risks under pressure. Even minor mistakes can propagate through financial reports. Additionally, outdated processes hamper collaboration as teams struggle to maintain consistent records across departments.

Consider a mid-sized tech firm whose monthly close dragged on for weeks due to manual reconciliation. Their finance team was perpetually verifying transactions across platforms, leaving minimal bandwidth for strategic work. After adopting automation, we saw reconciliation time drop by roughly 70%, allowing more focus on growth initiatives.

How AI + Plain Text Transform Bank Statement Matching​

AI algorithms analyze transaction patterns within plain text accounting systems, automatically proposing matches between bank statements and accounting records. Natural language processing enables AI to interpret unstructured bank statement data - for example, recognizing "AMZN Mktp US" as an Amazon Marketplace purchase.

Here's a real-world example of how AI assists with bank statement matching in Beancount:

# Original bank statement entry:
# "AMZN Mktp US*IF8QX0QS3" -29.99 USD

# AI-suggested Beancount transaction:
2025-05-20 * "Amazon" "Office supplies - keyboard wrist rest"
  Expenses:Office:Supplies            29.99 USD
  Assets:Bank:Checking              -29.99 USD
  
# Original bank statement entry:
# "UBER *TRIP HELP.UBER.COM" -24.50 USD

# AI-suggested Beancount transaction:
2025-05-21 * "Uber" "Client meeting transportation"
  Expenses:Transportation:Taxi       24.50 USD
  Assets:Bank:Checking             -24.50 USD

The AI system:

1. Recognizes common merchant patterns (e.g., "AMZN Mktp US*" → "Amazon")
2. Suggests appropriate account categories based on transaction history
3. Extracts meaningful descriptions from transaction data
4. Maintains proper double-entry format
5. Tags business-related expenses automatically

For more complex scenarios, like split payments or recurring transactions, the AI excels at pattern recognition:

# Original bank statement entries:
# "POPEYES #1234" -80.00 USD
# "ALICE SMITH" +20.00 USD
# "BOB JONES" +20.00 USD
# "CHARLIE BROWN" +20.00 USD

# AI-suggested Beancount transaction with split payments:
2025-05-22 * "Popeyes" "Team lunch - split with Alice, Bob, and Charlie"
  Expenses:Food                      20.00 USD
  Assets:Receivables:Alice          20.00 USD
  Assets:Receivables:Bob            20.00 USD
  Assets:Receivables:Charlie        20.00 USD
  Liabilities:CreditCard           -80.00 USD

# AI automatically reconciles repayments:
2025-05-23 * "Alice Smith" "Team lunch repayment"
  Assets:Bank:Checking              20.00 USD
  Assets:Receivables:Alice         -20.00 USD

2025-05-23 * "Bob Jones" "Team lunch repayment"
  Assets:Bank:Checking              20.00 USD
  Assets:Receivables:Bob           -20.00 USD

2025-05-23 * "Charlie Brown" "Team lunch repayment"
  Assets:Bank:Checking              20.00 USD
  Assets:Receivables:Charlie       -20.00 USD

FinTech Insights reports that 70% of finance professionals experienced significant error reduction using AI-driven tools. The plain text format enhances this efficiency by enabling easy version control and auditing while remaining highly compatible with AI processing.

Real-World Results from Beancount.io Teams​

A mid-sized accounting firm previously spent five hours reconciling each client account manually. After implementing AI-powered plain text accounting, they completed the same work in one hour. Their financial controller noted, "The system catches discrepancies we might have missed while freeing us to focus on analysis."

A fast-growing tech startup faced mounting transaction volumes that threatened to overwhelm their finance team. After adopting AI reconciliation, processing time fell by around 75%, allowing resources to be redirected toward strategic planning.

From our firsthand experience, AI-driven accounting solutions lead to significantly fewer errors, thanks to robust automated detection and correction features.

Implementation Guide for Automated Reconciliation​

Start by selecting AI tools that integrate smoothly with Beancount.io, such as OpenAI's GPT models or Google's BERT. Prepare your data by standardizing transaction formats and categories – in our experience, proper data standardization greatly improves AI performance.

Develop automation scripts leveraging Beancount's flexibility to identify discrepancies and cross-reference data. Train AI models specifically for anomaly detection to catch subtle patterns human reviewers might miss, like recurring late payments that could indicate systemic issues.

Establish regular performance reviews and feedback loops with your team. This iterative approach helps the AI system learn from experience while building trust in the automated process.

Beyond Time Savings: Enhanced Accuracy and Audit-Readiness​

AI reconciliation minimizes human error through automated cross-verification. Deloitte's research shows companies using AI for financial processes achieve 70% fewer accounting discrepancies. The system maintains detailed audit trails, making it easier for auditors to verify transactions.

A technology company struggling with frequent reconciliation errors saw audit costs decrease after implementing AI tools. The system's continuous learning capabilities meant accuracy improved over time as it processed more transactions.

Conclusion​

AI-powered reconciliation fundamentally transforms financial operations, offering both efficiency gains and enhanced accuracy. Organizations using Beancount.io demonstrate that automated workflows reduce reconciliation time while strengthening data integrity.

As financial complexity increases, manual reconciliation becomes increasingly unsustainable. Organizations that embrace AI-powered plain text accounting gain advantages in speed, accuracy, and strategic capability.

Consider starting with a single account in Beancount.io to experience how modern tooling can enhance your financial workflows.

In a recent McKinsey survey, 78% of CFOs reported that their legacy financial systems were holding them back from digital transformation. Rather than adding more complex software solutions, forward-thinking finance teams are finding success by treating their books like code through plain-text accounting.

Organizations ranging from nimble startups to established enterprises are discovering that text-based financial management can dramatically reduce technology costs while improving accuracy and automation capabilities. By embracing version-controlled, programmable financial records, these teams are building resilient systems that scale effectively.

The Hidden Costs of Traditional Financial Software: Breaking Down the TCO​

Beyond the obvious licensing fees, traditional financial software carries substantial hidden costs. Updates and maintenance often come with unexpected expenses - a 2022 Fintech Magazine survey found 64% of finance teams faced higher-than-anticipated costs in these areas.

The inflexibility of conventional systems creates its own expenses. Simple customizations can take weeks or months, leading to lost productivity as teams work around software limitations rather than having software work for them. Training requirements add another layer of cost, with companies typically spending up to 20% of the initial software investment just on employee onboarding.

Security presents additional challenges. As cyber threats evolve, organizations must continually invest in new protective measures. From our firsthand experience, outdated financial software often exposes companies to greater security risks.

Plain-Text Accounting: Where Version Control Meets Financial Precision​

Plain-text accounting combines the transparency of text files with the rigor of double-entry bookkeeping. Using version control tools like Git, finance teams can track changes with the same precision as software developers tracking code changes.

This approach transforms auditing from a dreaded task into a straightforward review. Teams can instantly see when and why specific transactions were modified. A recent case study showed how one startup used Beancount to identify a long-running billing error, trace it to its source, and implement preventive measures.

The flexibility enables experimentation with different reporting structures without risking data integrity. In our own work, startups have reduced monthly closing time by around 40% through streamlined data management and enhanced collaboration.

Automating the Money Trail: Building Scalable Financial Workflows with Code​

Code-based automation is transforming routine financial tasks into streamlined workflows. Rather than late nights checking spreadsheets, teams can automate reconciliations and focus on strategic analysis.

We've seen mid-sized tech companies create custom scripts for expense reports and invoice processing, cutting closing time by around 40%. This not only accelerates reporting but also improves team morale by enabling focus on high-value activities like forecasting.

The scalability of code-based systems provides a crucial advantage as organizations grow. While traditional spreadsheets become unwieldy with scale, programmatic workflows can elegantly handle increasing complexity through thoughtful automation.

Integration Intelligence: Connecting Your Financial Stack Through Plain-Text Systems​

The true power of plain-text accounting lies in its ability to connect disparate financial systems. Using human and machine-readable formats, it serves as a universal translator between different tools and platforms.

We've observed that unifying systems through plain-text accounting can reduce manual entry errors by roughly 25%. The programmable nature allows for custom integrations that precisely match organizational needs.

However, successful integration requires careful planning. Teams must balance automation opportunities with maintaining appropriate controls and oversight. The goal is to create a responsive financial ecosystem while ensuring accuracy and compliance.

Measuring Success: Real-World ROI Metrics from Teams Using Plain-Text Accounting​

Early adopters report compelling results across multiple metrics. Beyond direct cost savings, teams see improvements in accuracy, efficiency, and strategic capability.

We've seen organizations cut quarterly reporting time significantly—sometimes by around 50%—through automated data processing. We've also observed audit preparation time reduced by about 25% with better transaction tracking and version control.

The most significant gains often come from freed capacity for strategic work. Teams spend less time on manual reconciliation and more time analyzing data to drive business decisions.

Conclusion​

The shift to plain-text accounting represents a fundamental evolution in financial management. In our firsthand experience, it can lead to 40-60% reductions in processing time and dramatically fewer reconciliation errors.

However, success requires more than just implementing new tools. Organizations must invest in training, carefully design workflows, and maintain robust controls. When done thoughtfully, the transition can transform finance from a cost center into a strategic driver of business value.

The question isn't whether plain-text accounting will become standard practice, but rather who will gain early-mover advantages in their industry. The tools and practices are mature enough for practical implementation, while still offering significant competitive benefits to organizations willing to lead the way.

When your margins live on pennies, precision beats guesswork.

Selling on Amazon is a game of volume and velocity. But behind the rush of sales and shipments lies a complex web of fees, returns, inventory movements, and tax obligations. Standard bookkeeping software often struggles to capture this nuance, leaving sellers with a fuzzy picture of their true profitability.

This is where a plain-text accounting system like Beancount shines. By giving you total control over how you record transactions, you can build a financial source of truth that perfectly models the unique challenges of the Amazon marketplace. This guide provides a step-by-step workflow to keep you ahead of fees, taxes, and inventory headaches.

Why Amazon Bookkeeping Is Different​

If you’ve tried to reconcile an Amazon payout with your bank statement, you already know it's not straightforward. The financial reality of an Amazon business is hidden behind layers of abstraction.

• Bi-weekly lump-sum payouts: Amazon doesn't send you the revenue from each sale. Instead, it sends a single deposit every two weeks. This lump sum is a net figure, with gross sales reduced by referral fees, FBA fees, advertising costs, returns, and other withholdings. To understand your business, you must break this single number back into its constituent parts. (doola: A Business-in-a-Box™)
• Inventory everywhere: Your inventory is constantly in motion—from your supplier, to a prep center, to various FBA fulfillment centers across the country, and finally to the customer. Accurately tracking your Cost of Goods Sold (COGS) requires knowing which batch of inventory (at which cost) was used for each sale. (Bean Ninjas)
• Marketplace fees & promos: A significant portion of your revenue is immediately consumed by fees: referral fees, FBA pick-and-pack fees, monthly storage fees, and advertising costs. Tracking each of these expense categories separately is the only way to calculate your true gross margin and determine a product's real profitability. (Profitwise Accounting)
• Sales-tax patchwork: While Amazon's Marketplace Facilitator laws handle sales tax collection and remittance in most states, it's not a complete solution. Storing inventory in FBA warehouses can create "nexus" (a business presence), potentially requiring you to register and file in those states, even if no tax is due. This is a complex compliance area that demands careful tracking. (TaxDo)
• Lower 1099-K thresholds: With the reporting threshold for Form 1099-K dropping from $20,000 to$5,000 in 2024 (and set to fall to just $600 from 2026), nearly every serious seller will receive a form from Amazon reporting their gross transaction volume to the IRS. Your books must be able to reconcile perfectly with this number. (IRS)

Seven-Step Beancount Blueprint​

This blueprint leverages Beancount's precision to tackle Amazon's complexity head-on.

1. Separate Channels Early​

If you sell on multiple platforms, keep your accounting for each one separate. Within a single Beancount file for your legal entity, create dedicated, hierarchical accounts for each marketplace. This structure simplifies analytics and makes generating tax schedules trivial.

2025-07-22 open Income:Amazon               USD
2025-07-22 open Expenses:Amazon:FBAFee      USD
2025-07-22 open Assets:Amazon:Payouts       USD

2. Decompose Every Payout​

This is the most critical habit. Never book an Amazon deposit as a single line of income. Instead, download the "All Transactions" settlement report from Seller Central for the corresponding period. Use this report to create a single Beancount transaction that breaks the payout into its components.

The deposit you receive in the bank is the balancing entry. The gross sales are credited to Income, while all fees and refunds are debited from their respective Expenses accounts.

; bi-weekly payout from settlement report
2025-07-14 * "Amazon Settlement #4361"
  Assets:Bank:Operating            8432.17 USD
  Income:Amazon:Sales            -12274.50 USD
  Expenses:Amazon:FBAFee           2454.80 USD
  Expenses:Amazon:Adverts          1012.06 USD
  Expenses:Amazon:Refunds           375.47 USD
  Assets:Amazon:Reserve            -100.00 USD

3. Track Inventory & COGS with Lots​

Beancount has a first-class system for tracking inventory called "lots." When you purchase inventory, you record the number of units and their specific cost. When a unit is sold, you can expense that exact cost, giving you a perfect calculation for Cost of Goods Sold (COGS).

; Purchase 1,000 units from a supplier
2025-07-01 * "Supplier PO-7421"
  Assets:Inventory:WidgetA     1000 WidgetA {@ 4.20 USD}
  Assets:Bank:Operating

; Later, record the cost of a single sale
2025-07-16 * "FBA sale WidgetA | COGS"
  Expenses:COGS                1 WidgetA {4.20 USD}
  Assets:Inventory:WidgetA

4. Choose Accrual for Clarity​

For any inventory-based business, the accrual method is superior. A cash-basis approach would show a massive expense in the month you buy inventory and artificially high profits in the months you sell it, distorting your performance. Accrual accounting correctly matches the cost of the goods sold (COGS) to the revenue from that sale in the same period, providing a much clearer picture of your gross profit. (Bean Ninjas)

5. Automate Imports​

Manually entering settlement reports is educational at first, but it doesn't scale. The plain-text ecosystem excels at automation:

• Use bean-extract to pull data from formatted CSVs exported by services like A2X.
• Write simple Python scripts to pull data directly from Amazon's SP-API.
• Use existing importers to pull bank CSV files to reconcile deposits and fees charged directly to credit cards.

6. Reconcile Weekly​

Make it a habit to check your numbers. Use Beancount's powerful command-line tools to quickly validate balances and review performance.

# Check your current inventory counts and value
bean-balance books.bean "Assets:Inventory" "2025-07-21"

# Generate an income statement for the last period
bean-report books.bean income_statement -e 2025-07-21

7. Archive Source Docs​

For every major transaction, link to the source document. Attach the official Amazon settlement PDF, the supplier invoice for an inventory purchase, or a shipping receipt using Beancount's metadata syntax (document:). This creates a self-contained, audit-ready financial record.

Sales-Tax & Compliance Checklist​

• Marketplace Facilitator Laws: Understand that while Amazon remits sales tax on your behalf in most states, storing inventory in states like California, Texas, or Pennsylvania can still create economic nexus, potentially requiring you to register your business there. (TaxGPT)
• 1099-K Reconciliation: Ensure that the total you record in Income:Amazon:Sales for the year matches the gross amount reported on your Form 1099-K to the cent. Any discrepancy is an audit flag. (IRS)
• Direct Sales Tax: If you sell through other channels not covered by a facilitator, maintain a Liabilities:SalesTaxPayable:State account subtree to track taxes you owe directly.

Common Pitfalls (and Fixes)​

• Pitfall: Recording only the net deposit from Amazon.
  • Fix: Always decompose payouts using the full settlement report.
• Pitfall: Ignoring reimbursed returns or damaged goods.
  • Fix: Log both the initial refund expense and the subsequent reimbursement from Amazon as a separate credit.
• Pitfall: Forgetting about rolling reserves.
  • Fix: Amazon often withholds a "reserve" balance from payouts, especially for new accounts. Track this money you're owed in a dedicated Assets:Amazon:Reserve account.
• Pitfall: Mismatching SKU aliases between your system and Amazon's.
  • Fix: Normalize all SKU codes in your import scripts to ensure COGS lookups don't fail.

Quick-Start To-Do​

• Enable and download your first settlement report in Seller Central.
• Clone a Beancount starter repository and build a chart of accounts specific to Amazon.
• Write a small importer script that converts a settlement CSV into a Beancount transaction (.txn file).
• Schedule a weekly reminder to pull new reports and run bean-check to ensure your files are valid.
• Review your income statement monthly to make data-driven decisions on ad spend, pricing, and inventory.

Further Reading​

• Amazon Seller Central → 1099-K FAQs
• IRS Notice 2024-85 on Form 1099-K thresholds
• Bean Ninjas COGS guide for Amazon sellers

Ship more, fret less—keep your beans balanced. Happy selling!

Real estate transactions may constitute the largest financial activity in a family's lifetime. This article explains how to model real estate in Beancount. I treat real estate as an asset and the appreciation of the house as unrealized gain. Additionally, the mortgage is modeled as a liability, and the interest is considered an expense.

Let's assume that Mr. A purchased a luxury home located at 123 ABC Street, XYZ City, CA, 12345 on January 1, 2020, for a price of 1 million. The interest rate is 3.0%, the down payment is 20%, and the loan amount is 800,000.

Create Accounts​

Firstly, we treat the house as an Asset. Since the house is being listed as an Asset, it needs to be given a unit. In this case, the unit quantity is only one, it's unlikely there will be multiple, and even if it's the nth house, we would want to record it in a separate Asset. That is to say, one house corresponds to one Asset, and this Asset has a special unit, its value can only possibly be 1.

2019-12-31 commodity HOUSE.ABC
  name: "123 ABC Street, XYZ City, CA, 12345"

2019-12-31 open Assets:Property:US:CA:123ABC                        HOUSE.ABC
2019-12-31 open Liabilities:Bank:US:SomeBank:Mortgage:Loan          USD

In the first line here, we defined a commodity unit representing the house. In the fourth line, we defined an Asset account, which holds the commodity unit previously defined as the house. In the fifth line, we defined an account for the lending bank. As it's a liability, it falls under the Liabilities category.

Purchase​

With the accounts set up as above, the act of buying a house is equivalent to

borrowing money (debt) + spending money (down payment) = 1 house in asset

The most important reference when buying a property is likely the Buyer’s Settlement Statement, which clearly outlines the flow of money.

2020-01-01 * "Buying the house"
    Assets:Property:US:CA:123ABC                  1 HOUSE.ABC {1,000,000 USD}
    Assets:Bank:US:SomeBankA                      -100,000 USD
    Assets:Bank:US:SomeBankB                      -101,000 USD
    Liabilities:Bank:US:SomeBank:Mortgage:Loan    -800,000.00 USD
    Expenses:Home:Insurance                       1,000 USD
    Expenses:Home:Mortgage:Loan:ClosingCost

Here, we're detailing the transaction of buying the house, where money flows out from some banks (used for down payment and other expenses), a loan is taken (adding to liabilities), and a house is gained (added to assets).

Pay back mortgages​

Based on the above purchase record, we currently owe 800,000 USD. Due to the interest, and considering that all loans in the US are amortized equally in terms of principal and interest, the monthly payment includes a portion for interest and a portion for principal. In the early stages, the interest constitutes the majority.

To record the loan repayment, all you need to do is check your loan bank's statement. You just need to know how much of the principal you are repaying each month, and the rest is interest. The interest is counted as an Expense.

2020-02-01 * "Mortgage payment"
    Assets:Bank:US:SomeBank:Saving:Joint              -3,372.83 USD
    Liabilities:Bank:US:SomeBank:Mortgage:Loan         1,376.26 USD
    Expenses:Home:Mortgage:Loan:Interest

This entry details the monthly mortgage payment which is subtracted from your joint savings account. The repayment of principal reduces the liability, while the interest part is treated as an expense.

Appreciation​

If you want to record the appreciation of the property, some people create a separate account[, only recording the appreciation of the current property. Considering that the value of the house may increase or decrease, this appreciation may be negative. The advantage of this is that in the summary of your total assets, these two accounts will be included, one for the value of the house at the time of the transaction, and the other for the current appreciation of the house, thus reflecting the real-time price of the house.

I did not adopt this method, mainly for the following reasons:

1. The current value of the house can only be an estimate, for reference only, without practical value. Usually, I can only get the evaluation of the property on websites like Redfin or Zillow, and I personally don't think it has high reference value. I also did not consider incorporating these appreciations into total assets in real time.
2. Personally, I think before the mortgage is paid off, if the cash flow of the house is negative, to some extent, the property is still a liability. Therefore, incorporating it into assets prematurely will give you an illusion of enriched assets and appreciation, and I personally want to avoid this illusion.

The method I use to record property appreciation, which will also be discussed later on how to model RSUs. This method is to use a virtual currency unit. Assuming your base currency is USD, we can use USD.UNVEST (it seems that there is no need to create a new Commodity for this) to indicate that this asset is calculated in a special currency. The growth or reduction of this asset will not be recorded in USD. This way, I can achieve my original goal, that is, to record the appreciation of the house, and this appreciation will not be included in the final balance sheet (Balance Sheet).

2020-01-01 price HOUSE.ABC                          1,000,000 USD
2025-01-01 price HOUSE.ABC                          1,400,000 USD.UNVEST

You only need to price your property to USD.UNVEST regularly.

So, on Fava's Commodity page, you can track the trend of the reference price of the house. But on the Balance Sheet page, the price of the house is still the price of the house at the time of the transaction. That is to say, your total assets are still your down payment money at that time, plus the principal you keep paying off. The final change of this asset should only occur when you buy a house.

Sell​

Because no property has been sold yet and the various miscellaneous fees in the middle are unclear, this is a hypothetical scenario.

Suppose, on January 1, 2025, the property has appreciated to $1,400,000, and some reference data are as follows:

Person A decides to sell the property, and the final selling price of the house is $1,300,000.

2025-01-01 * "Selling the house"
    Assets:Property:US:CA:123ABC                  -1 HOUSE.ABC {1,300,000 USD}
    Liabilities:Bank:US:SomeBank:Mortgage:Loan    709,656.20 USD
    Expenses:Home:Agent:Fee                       72,000 USD
    Expenses:Home:ClosingCost                     10,000 USD
    Expenses:Home:Tax                             90,000 USD
    Assets:Bank:US:SomeBankA

Here it is assumed that 2 out of 5 years are self-occupied, so the appreciation of 500,000 does not need to be taxed. I randomly calculated a number here. In the end, the money that enters Person A's account is $418,343.8, of which 200,000 is the down payment at that time, and about 100,000 in interest has been paid. So, in the end, the book profit for Person A is around 100,000. It is worth noting that my calculation is not fair, after all, Person A has saved rent for these 5 years, and there may be other expenses on the house, such as maintenance, decoration, and so on.

To reflect this in the balance sheet, you can add this pricing.

2025-01-01 price HOUSE.ABC                          1,300,000 USD

Hello everyone! In today's blog post, we're diving into the world of Beancount, a double-entry accounting tool that's loved by many for its simplicity and power. More specifically, we're going to talk about two key concepts: Receivables and Payables.

Understanding these terms is crucial to using Beancount (or any double-entry accounting system) effectively. But don't worry if you're a beginner - we're going to break it all down, step by step!

Receivables and Payables: The Basics​

In accounting, "receivables" and "payables" are terms used to track money that is owed. "Receivables" refers to money that others owe to you, while "payables" refers to money that you owe to others.

Let's take an example:

1. Accounts Receivable (A/R): Suppose you own a bookstore and a customer buys a book on credit. The money they owe you for the book is an account receivable.

2. Accounts Payable (A/P): On the flip side, imagine you order a new set of books from a publisher, but you don't pay for them upfront. The money you owe the publisher is an account payable.

In Beancount, these are typically tracked through corresponding accounts. The main benefit here is that it provides you with a clear and accurate picture of your financial position at any point in time.

Setting Up Receivables and Payables in Beancount​

The structure of your Beancount file can be as simple or as complex as you need it to be. For receivables and payables, you'll likely want to create separate accounts under your Assets and Liabilities sections.

Here is a simple example:

1970-01-01 open Assets:AccountsReceivable
1970-01-01 open Liabilities:AccountsPayable

Tracking Transactions​

Payee side​

After setting up your accounts, you can track transactions that involve receivables and payables. Let's look at an example:

2023-05-29 * "Sold books to customer on credit"
  Assets:AccountsReceivable  100 USD
  Income:BookSales          -100 USD

Here, you're adding $100 to your receivables because a customer owes you this amount. Simultaneously, you're reducing your income by the same amount to maintain the balance (since you haven't actually received the money yet).

When the customer eventually pays, you'll record it like this:

2023-06-01 * "Received payment from customer"
  Assets:Bank:Savings        100 USD
  Assets:AccountsReceivable -100 USD

Payer side​

The same principle applies for payables, but with reversed signs:

2023-05-30 * "Bought books from publisher on credit"
  Liabilities:AccountsPayable  200 USD
  Expenses:BookPurchases     -200 USD

And when you pay off your debt:

2023-06-02 * "Paid off debt to publisher"
  Liabilities:AccountsPayable -200 USD
  Assets:Bank:Checking        200 USD

Wrapping Up​

Receivables and payables are at the heart of any accounting system. By accurately tracking these, you gain a comprehensive understanding of your financial health.

This is just a starting point, and Beancount is capable of much more. I hope this blog post helps clarify these important concepts. As always, happy accounting!

Example Account Name​

Assets:US:BofA:Checking

Account Types​

Assets          +
Liabilities     -
Income          -
Expenses        +
Equity          -

Commodities​

CNY, EUR, CAD, AUD
GOOG, AAPL, RBF1005
HOME_MAYST, AIRMILES
HOURS

Directives​

General syntax

YYYY-MM-DD <Directive> <Parameters...>

Opening & Closing Accounts​

2001-05-29 open Expenses:Restaurant
2001-05-29 open Assets:Checking     USD,EUR  ; Currency constraints

2015-04-23 close Assets:Checking

Declaring Commodities (Optional)​

1998-07-22 commodity AAPL
  name: "Apple Computer Inc."

Prices​

2015-04-30 price AAPL   125.15 CNY
2015-05-30 price AAPL   130.28 CNY

Notes​

2013-03-20 note Assets:Checking "Called to ask about rebate"

Documents​

2013-03-20 document Assets:Checking "path/to/statement.pdf"

Transactions​

2015-05-30 * "Some narration about this transaction"
  Liabilities:CreditCard   -101.23 CNY
  Expenses:Restaurant       101.23 CNY

2015-05-30 ! "Cable Co" "Phone Bill" #tag ˆlink
  id: "TW378743437"               ; Meta-data
  Expenses:Home:Phone  87.45 CNY
  Assets:Checking                 ; You may leave one amount out

Postings​

  ...    123.45 USD                             Simple
  ...        10 GOOG {502.12 USD}               With per-unit cost
  ...        10 GOOG {{5021.20 USD}}            With total cost
  ...        10 GOOG {502.12 # 9.95 USD}        With both costs
  ...   1000.00 USD   @ 1.10 CAD                With per-unit price
  ...        10 GOOG {502.12 USD} @ 1.10 CAD    With cost & price
  ...        10 GOOG {502.12 USD, 2014-05-12}   With date
  ! ...   123.45 USD ...                        With flag

Balance Assertions and Padding​

; Asserts the amount for only the given currency:
2015-06-01 balance Liabilities:CreditCard  -634.30 CNY

; Automatic insertion of transaction to fulfill the following assertion:
2015-06-01pad Assets:Checking Equity:Opening-Balances

Events​

2015-06-01 event "location" "New York, USA"
2015-06-30 event "address" "123 May Street"

Options​

option "title" "My Personal Ledger"

Other​

pushtag #trip-to-peru
...
poptag  #trip-to-peru
; Comments begin with a semi-colon

Discover the Magic of Plain Text Accounting with Beancount

Introduction​

Welcome to a world where accounting is no longer a daunting task. Today, we introduce you to Beancount, a powerful, flexible, and intuitive plain text accounting tool. Beancount empowers you to take control of your finances by providing a transparent and straightforward approach to managing your money.

In this comprehensive guide, we will delve into the basics of Beancount, explain its core concepts, and walk you through its simple yet powerful features. By the end of this blog, you'll have a solid understanding of Beancount and be ready to start using it to organize and analyze your financial life.

What is Beancount?​

Beancount is an open-source, plain text accounting system created by Martin Blais. Inspired by John Wiegley's Ledger system, Beancount aims to provide a robust and reliable method to manage personal and small business finances using plain text files. With Beancount, you can track your income, expenses, investments, and much more with ease.

Why Beancount?​

Plain text accounting offers several advantages over traditional spreadsheet-based or software-based accounting systems:

• Transparency: Beancount files are human-readable, making it easy to understand and audit your financial data.
• Flexibility: Beancount can be easily customized to fit your specific needs, and you can use your favorite text editor and version control system to manage your financial data.
• Portability: Your financial data can be accessed on any device, and it's easy to transfer between systems or share with others.
• Future-proof: Plain text files are universally compatible, ensuring that your financial data will remain accessible, even as technology evolves.

Beancount's Core Concepts​

To use Beancount effectively, it's crucial to understand its core concepts:

• Transactions: Financial events, such as income, expenses, or transfers between accounts, are recorded as transactions.
• Accounts: Transactions involve one or more accounts, such as assets, liabilities, income, or expenses.
• Double-entry bookkeeping: Beancount enforces double-entry bookkeeping, ensuring that every transaction has balanced debits and credits.
• Directives: Beancount uses a set of directives to define transactions, account openings, and other financial events.

Getting Started with Beancount​

To start using Beancount, follow these simple steps:

• Install Beancount: Install Beancount on your system using the provided installation instructions for your operating system.
• Create your Beancount file: Create a new plain text file with the .beancount extension (e.g., my_finances.beancount).
• Define your accounts: Use the "open" directive to define the accounts you'll use in your transactions.
• Record transactions: Use the "txn" directive to record your financial transactions.

Or simply sign up at https://beancount.io. Here are some plain text accounting examples -

Example 1: Basic Transaction

2023-04-01 open Assets:Checking
2023-04-01 open Expenses:Groceries

2023-04-10 txn "Grocery Store" "Buying groceries"
  Assets:Checking         -50.00 USD
  Expenses:Groceries       50.00 USD

In this example, we open two accounts, Assets:Checking and Expenses:Groceries. On April 10, 2023, we record a transaction for buying groceries worth $50. The transaction reduces the balance of Assets:Checking by$50 (debit) and increases the balance of Expenses:Groceries by $50 (credit).

Example 2: Income and Expense Transaction

2023-04-01 open Assets:Checking
2023-04-01 open Income:Salary
2023-04-01 open Expenses:Rent

2023-04-05 txn "Employer" "Salary payment"
  Assets:Checking       2000.00 USD
  Income:Salary        -2000.00 USD

2023-04-06 txn "Landlord" "Monthly rent payment"
  Assets:Checking       -1000.00 USD
  Expenses:Rent          1000.00 USD

In this example, we open three accounts: Assets:Checking, Income:Salary, and Expenses:Rent. On April 5, 2023, we record a salary payment transaction of $2000. The transaction increases the balance of Assets:Checking by$2000 (credit) and decreases the balance of Income:Salary by $2000 (debit). On April 6, 2023, we record a rent payment transaction of$1000. The transaction reduces the balance of Assets:Checking by $1000 (debit) and increases the balance of Expenses:Rent by$1000 (credit).

Example 3: Transfer Between Accounts

2023-04-01 open Assets:Checking
2023-04-01 open Assets:Savings

2023-04-15 txn "Bank" "Transfer from Checking to Savings"
  Assets:Checking       -500.00 USD
  Assets:Savings         500.00 USD

In this example, we open two accounts: Assets:Checking and Assets:Savings. On April 15, 2023, we record a transaction to transfer $500 from the checking account to the savings account. The transaction reduces the balance of Assets:Checking by$500 (debit) and increases the balance of Assets:Savings by $500 (credit).

These examples illustrate the basic concepts of Beancount's double-entry bookkeeping system. By properly recording transactions, users can maintain accurate records of their financial activities and generate reports to gain insights into their financial situation.

Generating Reports and Analyzing Data​

Beancount comes with a set of powerful tools for generating financial reports, including balance sheets, income statements, and more. You can also use Fava, a web-based user interface for Beancount, to visualize and interact with your financial data. https://beancount.io is built upon Fava with MIT license.

Conclusion​

Embrace the power and simplicity of plain text accounting with Beancount. By understanding its core concepts and following the steps outlined in this guide, you'll be well on your way to managing your personal or small business finances with ease and precision. As you grow more comfortable with Beancount, you can explore advanced features and customizations to tailor the system to your unique needs.

Whether you're looking to track your spending, plan for the future, or gain insights into your financial habits, Beancount offers the flexibility and transparency needed to achieve your goals. With its user-friendly approach, Beancount has the potential to revolutionize the way you manage your finances and empower you to take control of your financial future.

Now that you have a solid foundation in Beancount, it's time to embark on your plain text accounting journey. Say goodbye to cumbersome spreadsheets and convoluted software, and welcome the world of Beancount. Happy accounting!

Beancount, the double-entry accounting system beloved by developers and finance nerds alike, is powerful in its simplicity. But for those who want more control and faster navigation inside Fava, Beancount’s web interface, custom sidebar links and SQL queries can take your workflow to the next level.

In this guide, we’ll show you how to:

• Add quick-access links to Fava’s sidebar
• Use SQL queries for advanced filtering and analysis
• Customize your workflow for monthly reviews or anomaly detection

Why Customize Fava?​

Fava is already a beautiful interface for viewing your Beancount ledger, but as your journal grows, so does the need for better shortcuts and smarter queries.

Pain points this solves:​

• Navigating through time ranges repeatedly
• Filtering transactions across nested accounts
• Spotting negative balances or anomalies faster

✨ Custom Sidebar Links​

Let’s start with improving your daily workflow with simple sidebar shortcuts. These links appear in Fava’s left sidebar and can take you directly to filtered views like this month’s transactions or last month’s income.

Add these lines to your Beancount file:

2021-01-01 custom "fava-sidebar-link" "Current Month" "/jump?time=month"
2021-01-01 custom "fava-sidebar-link" "Last Month" "/jump?time=month-1"
2021-01-01 custom "fava-sidebar-link" "Clear All" "/jump?account=&time=&filter="

What They Do:​

• Current Month: Opens the transaction view filtered to the current month.
• Last Month: Instantly jumps to the previous month—great for end-of-month reviews.
• Clear All: Resets filters, showing all entries again.

These shortcuts eliminate manual time input and make your Fava experience feel more fluid and personalized.

🔍 Custom SQL Queries​

For deeper insight, Fava’s SQL interface is incredibly powerful. Here’s a query that finds all negative balances in accounts that match a pattern—perfect for flagging unusual or problematic transactions.

SELECT account, units(sum(position)), sum(position)
WHERE number(units(position)) < 0
  AND account ~ '.*:BCM:.*'
  AND date >= DATE(2021,12,9)
  AND date < DATE(2022,1,9)

Breakdown:​

• account ~ '.*:BCM:.*': Filters accounts containing :BCM: in their name.
• number(units(position)) < 0: Flags negative balances (e.g. overspent budgets).
• Date filters narrow the result to a specific 1-month window.

Use cases:​

• Spot errors like duplicate expenses or incorrect postings
• Audit a specific vendor or category
• Quickly extract actionable insights for budgeting

🛠 Pro Tip: Combine Links + Queries​

While Fava doesn’t allow direct links to custom queries, you can create a monthly review habit by:

• Using the “Current Month” link to start your review
• Opening your saved queries tab in another pane
• Reviewing both simultaneously—filter first, then dig deep

This combo helps you catch anomalies before they spiral and ensure your ledger stays clean.

Final Thoughts​

Beancount is minimal by design, but small enhancements like these bring huge gains in efficiency. Whether you’re reviewing your budget, debugging strange balances, or simply saving clicks, custom links and SQL queries give you more power and less friction.

Bonus: If you're using Fava’s custom reports, you can even build full dashboards tailored to your personal finance rituals.

Ready to take control?

Start small: add the “Current Month” link. Then build your own queries. Your future self will thank you.

Want more tips like this? Subscribe to our newsletter or explore more Beancount recipes at Beancount.io.