Using Quicken for Business questions

[te]

Ok, we have just started a small business and to keep costs low, we are
just using our Personal bank account and have a Sole Prop. business
license (actually a DBA).

I have a couple questions on how the categories work in relation to our
personal accounting...

1) I understand that I put on the Freight line the cost of shipping our
goods to us for resale, but on the sale of that item I assume I put in
the "Gross Sales" category, should that include the shipping cost in
it? Say item is $4.00, Shipping is $1.25, do I put $5.25 in as the
gross sales? What do I do if shipping charge is a slightly different
amount?

ie: Website calculates UPS's charge, charges customer credit card $1.25
shipping, but when I print out the label and drop off the cost is
really only $1.00? Where do I catergorize the .25 difference, because
I have already charged the customer that amount.

2) How do I tell which categories are for business vs. which ones are
for personal use? ie: I have a Telephone category and then a
Utilities:Telephone category, I imagine the first one is for business,
but at the same time, neight of them are associated with Schedule C.

3) Which category for regular office supplies, ie: Staples, Phone
equipments, tape, etc... I'm thinking the Office category?

4) Is it OK to create new categories and associate them with Schedule
Cther business expense for items like: Shipping Boxes (boxes we
purchase to send out goods in), Internet Service (Domain Name,
bandwidth, etc..), Software, Hardware used for the business, etc....

Thanks!

 

[Allan Martin]

This is a QuickBooks newsgroup not Quicken.

 

[L]

Ok, we have just started a small business and to keep costs low, we are
just using our Personal bank account and have a Sole Prop. business
license (actually a DBA).

I have a couple questions on how the categories work in relation to our
personal accounting...

1) I understand that I put on the Freight line the cost of shipping our
goods to us for resale, but on the sale of that item I assume I put in
the "Gross Sales" category, should that include the shipping cost in
it? Say item is $4.00, Shipping is $1.25, do I put $5.25 in as the
gross sales? What do I do if shipping charge is a slightly different
amount?

ie: Website calculates UPS's charge, charges customer credit card $1.25
shipping, but when I print out the label and drop off the cost is
really only $1.00? Where do I catergorize the .25 difference, because
I have already charged the customer that amount.

2) How do I tell which categories are for business vs. which ones are
for personal use? ie: I have a Telephone category and then a
Utilities:Telephone category, I imagine the first one is for business,
but at the same time, neight of them are associated with Schedule C.

3) Which category for regular office supplies, ie: Staples, Phone
equipments, tape, etc... I'm thinking the Office category?

4) Is it OK to create new categories and associate them with Schedule
Cther business expense for items like: Shipping Boxes (boxes we
purchase to send out goods in), Internet Service (Domain Name,
bandwidth, etc..), Software, Hardware used for the business, etc....

First, you would do well to post to a Quicken newsgroup, this ng is for
users of QuickBooks. Same software company, completely different product.

Secondly, although I understand the desire to keep costs low, setting up the
bookkeeping procedures for your business is not necessarily a do-it-yourself
project. While a visit to an accountant or bookkeeper may seem costly, I can
promise that a penalty from the IRS or your state if you fail to file your
tax forms accurately will hit you much harder. A good resource would be your
local community college. In my state, the business department has actually
been given state funds to advise small businesses.

Although you *can* use a single checking account for both personal and
business expenses, it will be much cleaner and easier for you if you open a
separate checking account. Again, look locally. Our business uses a
community bank with great hours, great rates, and lots of personal
attention. There may even be price advantages to you for separating
accounts. For example, my personal bank has a large returned check
processing fee. My community bank charges only $10.00. Remember, you get a
fee even if it is not *your* check that 'bounced' (ex. a customer check you
deposit).

Now to your questions.
1) As to your question about freight charges; understand that your charges
to your customer for 'freight' 'shipping and handling' or whatever you wish
to call it are *not* the same as your expenses for 'the cost of shipping...
goods to us for resale'. The amount you paid to your supplier for freight is
an expense. The amount you charge your customer is income. Two different
items, two different categories. As to how you categorize your income, you
have some leeway in that. It all depends on how much detail you want and the
nature of your business. For example, if you do not keep inventory or have
no need to know the individual item costs, you might not need to 'break out'
the shipping costs to you.
2) As to how you 'tell which categories are for business vs. which ones are
for personal use', well, that is certainly one of the disadvantages to
combining personal and business recordkeeping. It is up to you to create and
use the necessary categories to keep track of your business income and
expenses. Quicken comes with a set of categories pre-made for the use of
some of the most common personal finance situations. You are wrong in
thinking that there is a difference between the Telephone category and the
Utilities:Telephone category. Some folks when writing a check to the phone
company think of it as a separate category, some folks like to think of
their phone bill as one of their utilities. Quicken provides both
categories - you can enter what you like when you write the check ... or
none at all.

You've identified the problem AND the solution when you noticed that neither
category defaults to a tax form. Quicken is personal finance management
software. While you certainly *CAN* keep track of business expenses within
Quicken, you must take the initiative to create and maintain categories for
income and expenses, and associate those categories with the appropriate
lines on the appropriate tax forms.

As to what category your Staple purchases go into... you decide! You can
call it office supplies. As to whether you can create more categories, you
not only can, you must!

And, since phrases like office supplies, telephone, insurance, loan,
interest, salary, etc. have meaning in both personal AND business finances,
you have to be careful not to mix the usage. I would suggest creating
separate business categories for all the expenses you anticipate. It might
be helpful of all business categories have the same prefix or are under the
same heading. Additionally, you might want to look into the use of classes.

I hope this can get you started. For more detailed advice from other folks
who use Quicken, you might want to check the forums at
http://www.quickenforums.com/category.jspa?categoryID=1001

 

[Stan Baranowski]

I am confused!!! How did the QuickBooks forum get into Quicken???
All of the rest of the posts seem to be to Quicken, this thread seems to be
from ...QuickBooks????

 

[Disciple]

I am confused!!! How did the QuickBooks forum get into Quicken???
All of the rest of the posts seem to be to Quicken, this thread seems to be
from ...QuickBooks????

OP was cross posted to both newsgroups, without the courtesy notice of such
and setting 1 newsgroup as the follow-up group. You may not have seen that
with OE as your newsreader, I abandoned OE as a newsreader so long ago I
have forgotten whether all of the headers would show in message properties.

 

[RobertM]

Ok, we have just started a small business and to keep costs low, we are
just using our Personal bank account and have a Sole Prop. business
license (actually a DBA).

I have a couple questions on how the categories work in relation to our
personal accounting...

1) I understand that I put on the Freight line the cost of shipping our
goods to us for resale, but on the sale of that item I assume I put in
the "Gross Sales" category, should that include the shipping cost in
it? Say item is $4.00, Shipping is $1.25, do I put $5.25 in as the
gross sales? What do I do if shipping charge is a slightly different
amount?

ie: Website calculates UPS's charge, charges customer credit card $1.25
shipping, but when I print out the label and drop off the cost is
really only $1.00? Where do I catergorize the .25 difference, because
I have already charged the customer that amount.

2) How do I tell which categories are for business vs. which ones are
for personal use? ie: I have a Telephone category and then a
Utilities:Telephone category, I imagine the first one is for business,
but at the same time, neight of them are associated with Schedule C.

3) Which category for regular office supplies, ie: Staples, Phone
equipments, tape, etc... I'm thinking the Office category?

4) Is it OK to create new categories and associate them with Schedule
Cther business expense for items like: Shipping Boxes (boxes we
purchase to send out goods in), Internet Service (Domain Name,
bandwidth, etc..), Software, Hardware used for the business, etc....

Thanks!