abacus-minimal 0.9.0

Ledger in Python that follows corporate accounting rules.

abacus-minimal

abacus-minimal aims to be as concise as possible in implementation of double entry book-keeping rules as applied for corporate accounting.

Project goals

• Make valid accounting engine in fewer lines of code (Python or other languages).
• Explain book-keeping rules through code examples.
• Make routes into accounting for programmers andvand into programming for accountants.
• Curate various charts of accounts as JSON files and make conversions between them.
• Make free web learning tools in accounting similar to abacus-streamlit.
• Ultimately, lower the book-keeping and analytics costs for the businesses.

For the next version

• book.income_statement that works before and after close.
• book.balance_sheet with current_profit account when not closed.
• separate Entry(Iterable[SingleEntry]) into MultipleEntry(Entry), DoubleEntry and ClosingEntry(Entry) (is_closing=True)

Install

git clone https://github.com/epogrebnyak/abacus-minimal.git
cd abacus-minimal

Workflow

The steps for using abacus-minimal follow typical accounting cycle:

• create a chart of accounts,
• post transactions to ledger,
• make reconciliations and adjustments,
• close accounts,
• report financial results,
• save data for the next accounting period.

1. Create chart of accounts

Steps involved:

• specify name of the retained earnings account that will accumulate company profits less dividend,
• add account names for assets, capital, liabilities, income and expenses,
• add contra accounts (eg refunds is a contra account to sales).

Code example:

from abacus import Chart

chart = Chart(
    retained_earnings="retained_earnings",
    assets=["cash"],
    capital=["equity"],
    liabilities=["vat_payable"],
    income=["sales"],
    expenses=["salaries"],
)
chart.offset("sales", "refunds")

Chart class is a pydantic model, which means it is easily converted to a JSON file:

chart.save("chart.json")

2. Post entries to ledger

Steps involved:

• create a data structure that represents state of accounts (ledger),
• record account starting balances from the previous period (skip for a new company),
• record accounting entries that represent business transactions,
• show state of ledger (trial balance or account balances) at any time.

Code example:

from abacus import Book, Entry

book = Book(chart)
entries = [
    Entry("Initial investment", amount=10_000).debit("cash").credit("equity"),
    Entry("Sold services with VAT").debit("cash", 6000).credit("sales", 5000).credit("vat_payable", 1000),
    Entry("Made client refund", amount=500).debit("refunds").credit("cash"),
    Entry("Paid salaries", amount=1500).debit("salaries").credit("cash"),
]
book.post_many(entries)

Note:

• invalid entries will be rejected with AbacusError raised.

3. Closing accounts and reporting

Closing accounts at period end:

• make reconciliation entries (not in current example),
• make adjustment entries for accruals and deferrals (not in current example),
• close temporary accounts to the retained earnings account,
• make post-close entries if applicable, eg dividend payout (not in current example).

Reporting:

• show balance sheet and income statement,
• save account balances for the next period.

Code example:

# Close at period end and show reports
print(book.income_statement)
book.close()
print(book.balance_sheet)

# Check account balances match expected values
# (used as part of testing)
assert book.ledger.balances == {
    "cash": 14000,
    "equity": 10000,
    "vat_payable": 1000,
    "retained_earnings": 3000,
}

# Save everything to JSON files in current folder
book.save(directory=".")

Notes:

• closing accounts properly was probably the hardest part of the project where I had to refactor code several times to make it both correct and legible,
• saving the book will write chart.json, store.json and balances.json files.

Complete example

Complete usage example is located in readme.py file.

Key limitations

Several assumptions and simplifications are used to make advances in abacus-minimal incremental.

The key assumptions are:

• one currency,
• one level of accounts in chart,
• no account durations (current vs non-current),
• no changes in equity and cash flow statements.

See abacus.py module docstring for detail.

Alternatives

abacus-minimal takes inspiration from the following great projects:

• hledger and plain text accounting tools,
• medici ledger in JavaScript using Mongo database,
• microbooks API and python-accounting.

Plain text accounting tools are usually for personal finance while abacus-minimal targets accounting for a corporate entity. medici is a high performance ledger, but does not enforce any accounting rules. python-accounting is a production-grade project, tightly coupled to a database.

Big players in accounting software are Intuit Quickbooks (US) and Xero (Australia) for small and middle-sized companies. Many other office automation providers do also have accounting APIs (eg Zoho) and there are open source packages that have accounting functionality (eg Frappe). Several outlets advertise they provide IFRS-compliant charts of accounts, but usually as Excel files and as account taxanomies, not charts.

Accounting knowledge

If you are totally new to accounting the suggested friendly course is https://www.accountingcoach.com/.

ACCA and CPA are the international and the US professional qualifications and IFRS and GAAP are the accounting standards for accounting recognition, measurement and disclosure.

You might want to review part B-G in the ACCA syllabus for the FFA exam to familiarize yourself with what abacus-minimal is designed for.

Implementation detail

I use just command runner to automate code maintenance tasks in this project.

just test and just fix scripts will run the following tools:

• pytest
• mypy
• black and isort --float-to-top
• ruff
• other utilities as specified in justfile.

A future version of abacus-minimal will be a PyPI package managed through poetry.