I am a sole proprietorship, no employees, 500 inventory items. Currently
using MS Home & Business. It won't adequately track inventory. I'd like
history on an individual item from time to time in addition to total value.
Also MS-Money won't do the sales tax correctly. No provision for paying
sales tax on items I take from inventory for business use so the balance
sheet never balances. With MS, it's a combination of software and hand
written notes. I bought Peachtree Complete hoping it would be better, but
now they tell me I'd have to buy (and learn) Crystal Reports. Also, I'm not
an accountant. I can learn any software in time, but I have a store to run
so I can't spend my life trying to figure out cryptic software and doing
work-arounds for software deficiencies. I'd like to implement new software
January 1. What will Quickbooks do and what is the learning curve for a
1) Talk to your accountant.
1A) No, I'm serious.
1B) Yes, you have inventory.
1C) Yes, you may need permission from the IRS to change.
1D) Yes, QB keeps track of inventory on the average cost method and changing
methods requires the permission of the IRS.
2) Sounds like no single software packege will satisy you.
3) QB doesn't have adaquate provisions for taking things out of inventory for
personal use for sales tax unless you are an accountant type who knows how to
do general journal transactions in their sleep.
3A) Your accountant should be able to give you a template to follow.
4) QB is an accrual basis system. It can produce cash basis reports, but the
cash basis balance sheet will look wrong to you because QB is an accrual basis
5) Talk to your accountant.
6) Talk to your accountant again.
That is all.
I'll attempt to explain this better. The information I want to get regarding
inventory is strictly for my own use. How many of item A or B or C have I
sold in the last year? Are sales on specific items increasing or decreasing?
How many should I reorder for next year? The IRS doesn't care if I reorder
an overstock or an understock. I want to meet the customer needs while not
having surplus inventory. I don't have an accountant and if I did, he or she
couldn't advise me on how much inventory to stock. And yes, I agree the IRS
uses the average cost method, but I'd also like to know my current cost
because current selling price is based current cost, not on average cost
over the past two years ago. No, I'm not going to change from accrual to
Regarding sales tax, these items are taken from inventory for business use,
not personal use. In some states, anything that is part of the manufacturing
process is free of sales tax. In this state, things used in the repair
process are taxable unless they end up on the item being sold. Sandpaper is
taxable, lacquer and varnish are not. MS Money will also not figure anything
other than a fixed rate sales tax. Our tax rate here depends on the price of
what is being sold. It may be that I'll have to write my own program in
Excel and then link to Access for the inventory database. It'll be a lot of
work. I thought perhaps there might be something already out there.
I bought Peachtree Complete hoping it would be better, but
I do not know who "they" are but why did "they" tell you that you had to
learn/invest in Crystal Reports? Crystal Reports is used for creating and
viewing custom reports. When any of my clients require a special report that
is not already built into their software they call me in to design the
Crystal Report. All the user has to learn is how to print the report.
If you migrate to QuickBooks 2006 whose data is now also accessible to
Crystal Reports, I hope "they" do not tell you the same thing.
Peachtree software is geared more towards users that have more accounting
knowledge than the typical QB user. QB is written and designed to hide the
fact that it is a fully functional accounting system from the end user.
It really is impossible to tell what the learning curve in QB would look
like for you since you are an unknown factor. Surfice it say QB has an 86%
market share in the small business sector. With so many users, logic
dictates that there are a lot of dummies out there using the program. Don't
get me wrong, many of them are using the program incorrectly but they are
not aware if this fact so I guess it's ok. What you don't know can't hurt
My reference to "they" was a reference to Peachtree. I contacted them after
buying Peachtree to ask if it would do what seemed to have been advertised,
namely a full software package for all my business records. Unfortunately,
their advertising seems to be more wishful thinking rather than fact. If I
want to buy add-ons and learn how to use them, then Peachtree will do what
is advertised. I guess the perspective is a matter of whether you're the
seller or the buyer of their software. In any case I was somewhat
disappointed with Peachtree because their stand alone package without
add-ons doesn't appear to be capable of doing anything more than MS-Money
for H&B will do for handling my inventory. While everyone wants ease of use
in software, I don't necessarily have to be shielded from the accounting
that is going on behind the scenes. I don't trust any pre-packaged software
100% so I've delved in MS-Money to see how it is handling the accounts. I
have a good idea of what it is doing correctly and where it is lacking. As
pointed out, I may have to get two separate packages. There is nothing
better for inventory than a relational database. Putting it into a financial
package means compromising.
Peachtree is know for their inventory functionality. Many businesses choose
Peachtree over QuickBooks just for this reason.
Stating that Peachtree is on par with MS-Money for H&B with reguards to
inventory leads me to believe you did not spend enough time evaluating
Sage's product. Your conclusions just do not make sense.
While everyone wants ease of use
You are correct, I did not examine it that closely. I took Peachtree's word
for it that what I wanted to do couldn't be done without Crystal Reports. It
may have other capabilities that MS doesn't have, but if those are of no
interest to me, then Peachtree doesn't have any added advantage for me.
Perhaps for someone with different needs Peachtree would be better than MS.
I am speaking only in reference to my needs. Thought I made that clear in an
I might add that I am using MS "incorrectly" in that I have found ways to
get around some of its limitations. I think as long as one knows how they
are using it "incorrectly" i.e.unintended by Bill Gates, and why, then there
is no problem. What you don't know can hurt bad so it is appropriate for
users to know what their software is doing and why. I am aware that
computers and software can automate many tasks but they don't care about
right or wrong, and you can't tell the IRS, "the software made the mistake".
Get an accountant - preferably a CPA who's also a tax attorney - and you
will never have to tell the IRS squat. Basic rule = If your outside
assistant isn't charging you at least $500/year for your corporate returns,
you don't have a good enough practitioner.
The tax attorney will introduce you to terms like "shrikage" and "rodent
damage" and "deterioration" and "de minimus" that will solve forever your
concern over paying the state for that bit of sandpaper you removed from
inventory to use around the office.
You think? One of my customers was field-audited by the IRS. My friend had
his books done by one of the largest accounting firms in St Petersburg for
many years. After almost a month of auditing, the IRS sent my friend a
notice of deficiency for - wait for it now - $248,000.00.
Paniced, he hired a tax attorney, recommended by me, ($5,000 retainer). The
first words out of the attorney's mouth were: "I know this dude. He spends
most of his time auditing automobile dealers who sell Hummers to drug
dealers for cash. Watch me make this all go away."
Five weeks later, a revised notice of deficiency for less than $3,000.
Then the attorney says: "In going over your records, I think you're paying
WAY too much in property taxes. $23,000 a year sounds like it's just too
much. Let me see what I can do."
Presently, a new property tax evaluation comes in for $9100 - a $14,000 PER
Are you sure QB 2006 data is now available to Crystal Reports?
Just because Intuit has switched QB to an SQL data engine
does not mean that data is directly available via SQL. From what
I've gathered from what little info is available is that it is still
a proprietary system "based" on SQL Anywhere.
I suppose CR could use the QB SDK to get at "some" of the
data, but that has been possible prior to QB 2006.
My understating that CR uses ODBC to read the data. I should be receiving my
copy of QB 2006 shortly. I will test it out. I am only spitting out what I
have read in the accounting journals and articles about this this years
version of QB.
The biggest limitation for QBooks in handling inventory, is that it can not
handle receipt of the goods and receipt of the invoice for the goods as
separate transactions. Once you enter an invoice for an item, QBooks
assumes that it is in stock, so you have to use paper records to reconcile
that the items you have paid for actually show up.
Otherwise, you should be able to get the reports you need to see your
inventory levels, etc. As far as sales tax goes, when you create a sales
invoice, you can select any number of sales tax types, which can be
One thing that is very nice about QBooks is the ability to memorize
transactions. This way, you can work with your accountant to figure out how
to handle each different type of transaction, and memorize it, so you can
easily use the transaction without remembering all the details of what you
have to do.
It's not a perfect program, but it is inexpensive, virtually crash proof,
and has a very good user interface. In addition, it now has an API
interface, so that you have the option to write custom software that
interfaces with Quickbooks that provides industry specific functionality not
included in the base program. Note: I wouldn't recommend doing this,
unless you have your eyes WIDE open as far as the long term support costs,
I'm currently using QBooks 2004. In this version your only options are
"Receive Items", "Enter Bill for Received Items", and "Enter Bill and
What is missing is "Enter Bill for Items Not Received Yet". In our
business, this is a common occurrence, as we receive bills via FAX, and the
goods often don't show up until a week later.
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