I have recently started using Quicken H&B and was able to download transactions back to the beginning of the year with the exception of bank accounts which are only available from June 1 to present.
With a startup, we have some checks that were written that I need to record, however, do I really need to manually enter all the information from the bank statements or only the tax related items. And how do I deal with the "beginning balance" that quicken assigned to these accounts based upon the downloaded information.
I assume that I need to put any tax related information into this file so that when I transfer it to turbotax to do my taxes next year, I have all info in one place.. I assume that TTax gives me an oportunity to add additional expenses to my C form..yes it is my first time to fill one out so I new to the business software side of TTax.
We can't answer that until you define your goals for us. Since you are using the H&B version of Quicken, and since you expect to file Schedule C, I assume that you are accounting for a business - and probably for non-business transactions, too.
The IRS doesn't require you to keep any books, unless you are a corporation. They do require that you present accurate information on your returns, and be prepared to back it up if requested. How you get that accurate information is up to you.
But any business manager needs reliable information to manage the business. That's why there were accountants and accounting systems long before there was an income tax. Even now, preparing the tax return is only one of the many reasons for good bookkeeping.
Who will read any financial reports that you prepare? Just yourself? And the IRS? Your banker? Your partner? Make your accounting choices based on who will need to know what. Design your system and make your entries to satisfy those needs. But don't be shortsighted. Just because you don't see a need today doesn't mean that you shouldn't be prepared to present adequate records if they are needed next year or the year after.
One of the most important uses of Quicken is to keep track of your assets, especially your cash. Money comes from several sources, not all of them taxable, and gets spent on many things, not all of them deductible. An accounting system that ignores non-tax-related transactions is not adequate for managing a household, much less a business. While I might look for ways to summarize some transactions where details are not important, I would certainly try to establish a good opening balance for each bank account, and then enter all additions and subtractions from that account to the present, to provide a good foundation for future accounting. Since tax returns are (almost always) based on the calendar year, you should try hard to create adequate records for the whole year, even if downloads are not available for the first half. Use paper records where downloads are not available; we all always relied on paper records until recent years, and they still are often more trusted than electronic reports.
Quicken knows only what you've told it, in one way or another. It is YOUR responsibility to provide the dependable beginning balances. If Quicken got it wrong, then YOU must correct it, using information from paper statements or any other sources that you have.
Back to the main point: Keep your records to meet your needs: To manage your business; to satisfy the IRS; and for whatever other purpose you might have.
There's nothing magical about the "beginning balance" (or "Opening Balance") assigned by Quicken, you can modify that transaction to suit your needs.
Assuming Quicken correctly computes the first opening balance based on the first download of transactions for the account: if you then manually add transactions that occurred prior to the date of the initial Opening Balance, you just modify that Opening Balance accordingly. You change its amount so that the Ending Balance remains correct, and you change its date so the account balance just before the first (oldest) transaction in the account, is correct (ideally, the Opening Balance of the account would be the Opening Balance of the first statement for the account).
Basically, as you manually add transactions older than the first downloaded transactions, you will modify the opening balance transaction amount by the net amount of those manually added transactions, and you will modify the opening balance transaction date to make it earlier than the transaction date of oldest manually added transaction.
Thank you both for your responses. As the accountant in me (formerly trained..just out of circulation for some time) is already twitching due to the missing info in my reports..I will begin to manually enter the previous statements. I agree, the reports are just for me, but with a hopefully expanding business, I like to have all my docs in place for the future.
Yeah, I've been retired for a long time, too. ;^} But old habits just keep reasserting themselves. As John suggested, there's nothing wrong with temporary fixes, so long as we recognize their temporary nature and remember to correct them when real data becomes available. We accountants just can't relax until the fixes are fixed, can we?
My post was obviously overkill for you, Jo, but maybe it will be food for thought for other readers. We never know in a newsgroup who might be "reading over our shoulders".
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.