Help Me Setup My Quicken Properly

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.

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.

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.

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

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