Quickbooks vs Quicken: tracking stock market investments

There is no rule that says you can't use both programs. I have been using Quicken to track investment accounts for my clients for many years and it works just fine and makes my job much simplier.

All you need to do is set up a balance sheet account in QuickBooks for each Investment account you will be tracking along with any income, expense, margin liability accounts etc. as required.

At the end of the accounting period print out the required reports in Quicken and use them to draft a simple journal entry in QB to record the investment activity and adjust the value of the investment account(s).

Naturally any monies flowing into and out of the company's regular checking accounts simply get posted to the investment account(s).

The exact mechanics of this method are beyond the scope of this newgroup but if you have a good grasp of debits and credits it is not difficult and you can figure it out on your own. If you do not, then you would need training from someone who does in order to use this method.

In any event, trying to track investment activity in QB can be done but is very limited in functionality. In most cases a journal entry at the end of an accounting period is the way to go.

This is a business environment, and we cannot use two programs. It would create too much confusion. It was my impression that QB has no real investment functionality beyond periodic journal entries, and you just confirmed that this is the case. I still have to figure out what to do with individual stock transactions and interest/dividends. I have the opening cost basis of the portfolio as of 1/1/05, but I don't know if I should enter each security, or just the balance sheet total. When interest income or dividends are received I have the same issue, whether to record the income in one account, or set up sub accounts for the income on each security. At t his point, I lean towards separate asset accounts for each security, but combining all income into either Dividend Income or Interest Income (with separate G/L accounts for tax free income, if any).

What government agency would ever pass a law prohibiting a business from using more than one accounting tool? You must located in the town of stupid. I feel your pain. Can you imagine if they pass a law prohibiting builders from using any other tool except a hammer. Those poor bastards will have to go around treating everything like a nail.

I didn't say there was a law, I was just saying that using a combination of two programs is going to inject into the process a level of complexity that I don't think will work. There are a lot of transactions, and there might be several staffers working on the file at the same or different times. I don't want to have to coordinate this with recording investment transactions in a separate program, then having to record the resulting data in QB. Sorry if I was unclear in my original post.

Your making this a lot more complicated then it really is. The job of recording the investment transactions would normally be given to a single person. In many cases the monthly summary can be taken directly off the brokers statement and journalized into QB. The broker in many cases will even maintain basis information so if a security is sold they can supply a report showing the actual gain of loss along with holding periods. If you are using a full service broker that maintains this type of detail then there is no need for Quicken or other recording keeping The broker does it for you.

We actually break out stock, options, and dividends into Microsoft Money, then post summary numbers from reports into Quickbooks.

This is one area where Microsoft has done something truly brilliant. Money was able to handle extremely complex and subtle options transactions, both long and short positions, while at the same time staying very user friendly. Quicken to contrast was simply out of its league. It didn't understand many options, didn't do short options correctly, and in generally was very cumbersome to use once you got beyond a handful of transactions per year.

Quickbooks is not the tool to hold the detail. They don't have automatic download from major brokerages, and they just don't have the built in features for matching different parts of a position. We just create other income categories for short term and long term capital gains in Quickbooks and post summary numbers there.

Will,

Well I'll be darned. We agree with each other. If a user needs to track security transactions then using a program made for this purpose is the logical method. I personally have never had any problems using Quicken so I can't speak to its limitations. In any event it really does not matter. You use the tool that matches the job, be it Money or Quicken.

I'm the person that started this thread, and took issue with the concept of using both Quicken and QB for the same task. I have resolved my issue using QB only. I have started 1/1/05 with a balance sheet account that comprises the cost basis of every security purchased since the beginning of time that was still held as of 1/1/05. That's about 75 securities. When a security is bought, we will enter the transaction in the register, reducing the brokerage cash balance and debiting the balance sheet account. When we sell a security, we will again use the register, to record the increase in brokerage account cash, credit the balance sheet account for the cost, and the difference will be gain or loss. Based upon our examination of the first seven months of 2005, that should work out pretty well. We will also use an Excel spreadsheet to roll forward the balance sheet detail, so we will always know our inventory at cost.

I never suggested that QB had to be used for every purpose without any supporting programs. My current method uses Excel in addition to QB. I used to work as in internal accountant for an investor that made about 25-50 trades per day. At the end of each month, he sent his brokerage statement to a company (cannot remember the same, was years ago) that analyzed the hundreds of transactions, including short sales, option sales, and options purchases, and compiled the results into a report. Having said that, I would still opt to keep everything in one program where possible. If done that way, you don't have to go anywhere else for the details. When feasible, using one program is more efficient and makes for better record keeping. Clear?

Cyrstal Clear. You decided to use Excel as the other program to track your investments. I prefer Quicken and my good buddy Will prefers MS Money. Each tool works, however some are more far more suited to the task.

There are also many times where the statments alone supplied by the broker are sufficent to post a summary of investment transactions into QB. Just got to love them B boys and their fancy computers.