Help Me Setup My Quicken Properly

Discussion in 'Quicken' started by Sharif, Jul 31, 2007.

  1. Sharif

    Sharif Guest

    Okay... I have been using Quicken for the past few months and now I
    realize, I may have massively screwed up the way I am recording my
    transactions and income because none of my reports are coming out
    correctly. I would really appreciate a little help in setting up my
    accounts and how to go on about using Quicken.

    I am using Quick 2007 Home & Business edition.

    Here are the list of accounts I will need to track:
    - Checking
    - Savings
    - Credit Card 1
    - Credit Card 2
    - PayPal
    - Cash (for tracking Cash income and expenses)
    - Bill Pay

    I am also a freelancer, which is the reason I got the Home & BUSINESS
    edition because I need to track invoices, sales, and customer
    payments, etc. How should I set this up? What categories would income
    from this go into - it is my primary source as well.

    I also use my credit cards to pay bills for my brother who gives me
    cash in exchange, I need to be able to exclude these transactions from
    my own as well, which is why the Bill Pay account exists.

    I appreciate anyone taking the time to read and help me... thank you.
     
    Sharif, Jul 31, 2007
    #1
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  2. Sharif

    Laura Guest

    "Sharif" <> wrote in message
    news:...
    > Okay... I have been using Quicken for the past few months and now I
    > realize, I may have massively screwed up the way I am recording my
    > transactions and income because none of my reports are coming out
    > correctly. I would really appreciate a little help in setting up my
    > accounts and how to go on about using Quicken.
    >
    > I am using Quick 2007 Home & Business edition.
    >
    > Here are the list of accounts I will need to track:
    > - Checking
    > - Savings
    > - Credit Card 1
    > - Credit Card 2
    > - PayPal
    > - Cash (for tracking Cash income and expenses)
    > - Bill Pay


    Are all of these accounts business related or are some of them personal
    accounts? Keep your business and personal finances separate or you run the
    risk of losing all of your business deductions in the event of an IRS audit.

    You probably don't need both a checking and Cash account unless you mean a
    Petty Cash account for small expenditures where writing a check is not
    appropriate. Examples are postage where you use cash out of your cash
    drawer. Cash from your customers should be deposited into your checking
    account so that you can write checks to pay your expenses.

    > I am also a freelancer, which is the reason I got the Home & BUSINESS
    > edition because I need to track invoices, sales, and customer
    > payments, etc. How should I set this up? What categories would income
    > from this go into - it is my primary source as well.


    You need at least 1 income account. How many depends on how you wish to
    track your income. You also need an Accounts Receivable account if you plan
    on extending credit to your customers.

    > I also use my credit cards to pay bills for my brother who gives me
    > cash in exchange, I need to be able to exclude these transactions from
    > my own as well, which is why the Bill Pay account exists.


    And what does this little arrangement have to do with your business? Keep
    those transactions out of Quicken or at least out of your business file. If
    you want to do this using personal funds then that's your choice but they
    don't belong in your business file.

    > I appreciate anyone taking the time to read and help me... thank you.
    >
     
    Laura, Jul 31, 2007
    #2
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  3. Sharif

    Bernie Guest

    On 7/30/2007 6:22 PM, Sharif wrote:
    > Okay... I have been using Quicken for the past few months and now I
    > realize, I may have massively screwed up the way I am recording my
    > transactions and income because none of my reports are coming out
    > correctly. I would really appreciate a little help in setting up my
    > accounts and how to go on about using Quicken.
    >
    > I am using Quick 2007 Home & Business edition.
    >
    > Here are the list of accounts I will need to track:
    > - Checking
    > - Savings
    > - Credit Card 1
    > - Credit Card 2
    > - PayPal
    > - Cash (for tracking Cash income and expenses)
    > - Bill Pay
    >
    > I am also a freelancer, which is the reason I got the Home & BUSINESS
    > edition because I need to track invoices, sales, and customer
    > payments, etc. How should I set this up? What categories would income
    > from this go into - it is my primary source as well.
    >
    > I also use my credit cards to pay bills for my brother who gives me
    > cash in exchange, I need to be able to exclude these transactions from
    > my own as well, which is why the Bill Pay account exists.
    >
    > I appreciate anyone taking the time to read and help me... thank you.
    >

    Here are some thoughts that complement Laura's and in some cases are a
    little different. Absolutely you should keep your personal and business
    accounts separate which was obviously your intent when you bought the
    Home and Business version of the program. Although we have had a very,
    very small business and use just the personal version of Quicken, even
    there is was easy to keep track of things separately.

    You didn't mention Categories at all, and that is going to be VERY
    important to you and how you manage and report on things.

    Setting up your Checking, Savings and Credit Card accounts should be
    simple and straightforward.

    If you leave money in your Paypal account, or if you accept payment for
    your business via Paypal you should set that up as a separate savings
    account. If you simply use it to transfer money to or from friends
    occasionally and if you don't leave money in that account you may not
    need to bother setting it up as a separate account at all.

    I suggest you setup a Cash account. There are what I would call
    "tricks" for avoiding that, but the most straightforward approach is to
    setup a Cash account. That makes it very easy to "follow the money" and
    if you use that "follow the money" throughout Quicken you'll find it
    easy and productive.

    Setup Categories for Brother:rent; Brother:Utility; etc. When you use
    any of your credit cards to pay one of his bills, or even if you use
    your checking or other account, use the appropriate category.

    When you brother gives you cash for his rent, enter it as a deposit in
    your Cash account and use the Brother:rent category. If he gives you
    cash to cover several items you would enter it as a Split transaction
    and enter the appropriate categories and amounts.

    If you actually take some of the money and deposit it in your Checking
    account, enter a Transfer in Quicken to "follow the money". Your Cash
    account will be right, and more importantly, your Checking account will
    be right and you'll know if you have enough in your Checking account to
    pay the credit card bill.

    If you use money in the Cash account for specific or miscellaneous
    expenses you would enter the withdrawal in your Cash account. Some
    people are fastidious about tracking cash. Most of us would simply
    withdraw a sum of money, whether it be $20 or $100 or whatever and
    categorize it as miscellaneous or entertainment or whatever.

    You will be able to create reports showing all the transactions
    involving your Brother, and showing the total amount that he still owes
    you at any point in time.

    Those ideas should help you I think, and give you a base to build on.
    Bernie
     
    Bernie, Jul 31, 2007
    #3
  4. Sharif

    R. C. White Guest

    Hi, Sharif.

    I agree with most of what Laura and Bernie have said. I'd just like to
    emphasize one point and disagree with another.

    Yes, you should have a Cash account. This can be handled in a number of
    ways, some of which have already been suggested. But you need this for cash
    transactions, and perhaps for holding undeposited cash and check before they
    get to the bank.

    Bills paid for your brother are NOT your expenses. They should never go to
    YOUR expense categories, even temporarily. From the beginning, they are
    LOANS to your brother and should be accounted for as such. Charge them to a
    "receivable" Account with a title that makes sense to you: Due from
    Brother, or Loan Receivable, or Advances to Buddy - or whatever you want to
    call it. But it is a asset to you, not an expense - unless he fails to
    repay you, in which case it is a Bad Debt to you, not Rent or whatever
    expense it might be to him.

    When you pay his bill, debit Due from Brother, credit Credit Card Payable -
    in accountant-speak. When he pays you, debit Cash, credit Due from Brother.
    End result, you have cash, you owe on the credit card, your brother's loan
    balance is zero - and nothing flowed through your expense categories.

    RC
    --
    R. C. White, CPA
    San Marcos, TX
    (Retired. No longer licensed to practice public accounting.)

    Microsoft Windows MVP
    (Currently running Vista Ultimate x64)

    "Sharif" <> wrote in message
    news:...
    > Okay... I have been using Quicken for the past few months and now I
    > realize, I may have massively screwed up the way I am recording my
    > transactions and income because none of my reports are coming out
    > correctly. I would really appreciate a little help in setting up my
    > accounts and how to go on about using Quicken.
    >
    > I am using Quick 2007 Home & Business edition.
    >
    > Here are the list of accounts I will need to track:
    > - Checking
    > - Savings
    > - Credit Card 1
    > - Credit Card 2
    > - PayPal
    > - Cash (for tracking Cash income and expenses)
    > - Bill Pay
    >
    > I am also a freelancer, which is the reason I got the Home & BUSINESS
    > edition because I need to track invoices, sales, and customer
    > payments, etc. How should I set this up? What categories would income
    > from this go into - it is my primary source as well.
    >
    > I also use my credit cards to pay bills for my brother who gives me
    > cash in exchange, I need to be able to exclude these transactions from
    > my own as well, which is why the Bill Pay account exists.
    >
    > I appreciate anyone taking the time to read and help me... thank you.
     
    R. C. White, Jul 31, 2007
    #4
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