Portfolio accounting integrated in financial accounting (Universal)

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With Banana Accounting you can manage the purchase and sale of securities directly in double-entry accounting with multi-currency. In this way, in addition to having the balance sheet, profit and loss account and all the other functions that financial accounting provides, you have precise information on the securities situation and in particular on the book value of each individual security, which is important for tax purposes.

Advantages of integrated securities management in accounting

Banana Accounting is one of the few software packages that also allows you to manage securities directly in accounting.

  • You have a complete accounting view related to securities, without having to maintain external tables. 
  • You save time because at the same time that you record the financial transaction (purchase or sale of securities) in accounting, you also enter the quantities and prices.  
  • You can find out the accounting profit/loss and the exchange rate profit/loss on the individual security at the time of sale or at the time of closing.

Shown below is an entry table with transactions for the sale and purchase of securities in different currencies.

example purchase transactions

Recording purchases and sales of securities

The Transactions table, the core of the accounting, can be customised by adding the columns Quantity and Unit price.  While recording securities transactions, you can thus directly enter all the information required for securities management:

  • Enter the quantity bought and sold and the corresponding price.
  • Separate the bank cost part.
  • Record the profit or loss at the time of sale.
  • Record the exchange gain or loss at the time of sale

In the previous image, you see examples of purchase and sale entries, showing quantities and prices. At the time of the sale transaction, the profit is also recorded, so that the value of the securities on the balance sheet corresponds to the book value.

List of Items

In accounting you can add the table Items, which works as an integrated mini-warehouse in accounting.      
It is used for integrated invoicing and cost control, but is excellently suited for securities management.     

  • You can list all the securities you have purchased, entering all the necessary information. 
  • You can group securities as you wish, separate bonds from stocks.
  • The Items table is linked with the Transactions table via the item code, so when you enter a movement the programme updates the current quantity and you thus always know the available quantity for each security.

accounts table (assets example)

Book Value Calculation

The purpose of Banana Accounting's securities management is to know the book value of each security.     
The book value of a security is what is used to prepare the balance sheet and is generally the cost price or average cost.

  • It is used to calculate the accounting profit or loss when the securities are sold.
  • It is used to calculate the accounting profit or loss when securities are revalued to market price.


It is therefore very important because it contributes to determining the book value of the portfolio as a whole, the company's results and thus also taxation.

The securities management tools made available by financial institutions are very sophisticated, but do not always manage the book value. Normal accounting programmes do not keep track of the quantities and prices purchased. To keep track of the book value of individual securities, accountants therefore have to spend a lot of time reconstructing transactions or keeping Excel tables.

Calculating Profit/Loss on Securities

When you have entered a securities sale entry, the profit/loss calculation extension reconstructs the book value and calculates the profit and loss.     
If you are using a multi-currency accounting, it also calculates the realised exchange rate gain/loss.     
These values are necessary to complete the sales entry.

accounts table (calculate sale data dialog)

 

Securities Inventory

Thanks to the detailed information entered in the Transactions table and the market value of securities entered in the Items table, the program is able to calculate the current values of securities and unrealised gains and losses.

accounts table (Evaluation report)

Getting Started

You can see how it works by using one of our templates or if you already have your own bookkeeping set up, you can adapt your current accounting in just a few steps. Use the extensions to calculate the profit or loss on the sale of securities and obtain various reports.

Documentation

Is there more you need?

Portfolio management is a beta feature, so it is still under development. If you have any suggestions on how to improve the content of the templates, reports or think it would be useful/interesting to add new features, please send us your feedback using our form.

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