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 C:other 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
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.
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