1 Using the Accounting System
The current installation requires only that the zipped file be downloaded to the directory of your choice and unzipped there. There is a dummy database I have used for debugging and testing in the zipped file. To use your own data from scratch just delete the 'OpenAccounting.db' file, open the application and go to File>New and the basic required databases and accounts will be created. Starting balances are of course zero(0).
At this point then you are ready to add your own accounts to reflect your specific business functions. You can use the bare bones default required accounts from the outset, if you wish and add relevant sub-accounts later. Let me go through the automatic required account for you now. Lets focus on the General Ledger. This is the collection of accounts in your business.
Money comes in in some form and goes out in some form. Once in the system the money is held somewhere until it is paid out for bills or for yourself, the owner - equity holder. The main principle, is the government wants you to be able to demonstrate what you have at any time, especially at tax time. How you keep track has to satisfy them first and foremost. Organizations giving you credit also will demand some proof of you business financial position. tax documents are a usual minimum to satisfy credit givers curiosity.
Money is held as an assets, usually in the bank. The Bank is an asset account and all assets can be represented by a general asset account, numbered 1, 10, 100, or 1000 - your choice depending on how diverse the business and the details necessary to keep track of things. 100 is a good place as it allows lots of room to expand. All businesses have at least one bank account, rather than keeping track in 100 call it 110. Accounts 511 - 19 are optional other banks or cash sub-accounts.
Moneys owed to you are your asset as well. All moneys should have an invoice (or bill) to show it's eventual source. When paid, to you it goes to the bank but if you've billed but not received it yet you need to keep track too. This is the Accounts Receivable. Usually this is account 120 (or 12 or 1200). 121-29 are the Receivables sub-accounts and are of course optional as well.
Assets you own such as investment instruments etc are the rest of the 500 series, usually 130 - 199.
Thus the bare minimum accounts for assets would be 100 and 120. Your bank can be anything you wish (though something between 110 and 119 is very very strongly recommended. That's where your accountant expects it. They are your friend and you shouldn't make them work too hard on your accounts - they do bill you for their services (a Liability called an Account Payable, see next).
You could use 200 as all your liabilities, but that won't give much information back to you when you need it. So Accounts payable is an expected account and is numbered 220 (or 20, or 2000). Thus a minimum set of liabilities accounts would be 200 and 220.
What you bring into the business is an investment by you. However, it is money you owe you. It is thus like a liability but it is kept separate, though it is technically treated like a liability. The Equity account is 300 with optional sub-account detains as needed (300 to 399).
Thus the accounts in the basic start-up are 100, 120, 200, 220 and 300 (plus two more discussed below - - Income or Revenue called 400 and Expenses or Costs called 500) These 7 accounts are automatically created by the system when you select New from the File menu the first time.