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[gnue-sb-discuss] Notes on my accounting system
From: |
Stanley A. Klein |
Subject: |
[gnue-sb-discuss] Notes on my accounting system |
Date: |
Sat, 29 Mar 2003 17:58:29 |
To help with the roadmap, I took a few minutes to gather information on my
accounting system and how I use it in my consulting business. I have been
using QuickBooks 5 since 1996. The functions I use are as follows:
1. Set up chart of accounts
I have attached below my chart of accounts. Some of the accounts were
defined by QuickBooks and some by me. There is an "account type" that I
have filled in except for the type "Expense", i.e., the unmarked accounts
are expense accounts. Note there is a hierarchical structure. All
accounts are named in alpha; if there are any numbers they are transparent
to me.
2. Maintain item list
These are the items I have for sale. The list has columns name,
description, type, account, and price. I have three categories of items:
Consulting, Publications, and Travel. Consulting goes to the consulting
income account, publications to the publication sales account, and travel
to the reimbursed travel account; all three are listed as income accounts.
3. Maintain name lists
QuickBooks maintains four name lists: Customers/jobs, vendors, employees,
and other names. The customers/jobs list is indented (two level
hierarchical). In order to organize my travel expenses by trips I need to
keep creating other names as pseudo-vendors when I enter the expenses.
QuickBooks does not let me set up an internal or "overhead" customer with
internal projects and associate expenses with the internal projects. It
expects to invoice expenses associated with projects. That's why I use the
workaround of pseudo-vendors.
4. Record checks
This is a function I use to record checks and associate the checks with one
or more accounts. These can be expense accounts, employee advances, or
owner's capital draws. I can also associate an expense with a customer/job.
5. Record "credit card" charges
The "credit cards" are actually money the business owes me, similar to an
employee "expense account". They function similarly to the checking
account, except the amounts are recorded in the "credit card" accounts and
I later either reconcile them with the employee advances or write checks to
cover them.
I also maintain spreadsheet "journals" for some office expenses (postage,
copying, cash purchase of publications, and office supplies), for local
travel (mileage, Metro fares, parking/tolls, and meals), for telephone
expenses (that are a portion of phone bills), and for fixed assets. I post
the totals to the credit cards from time to time, sometimes just at the end
of the year.
6. Create invoice
The invoice items are either consulting hours or reimbursable travel
associated with customers/jobs.
7. Create packing list
This is based on a function called "cash sales" that looks like an invoice.
I used it when I was selling a document I had written. I enclosed the
packing list with the document when I shipped it. The payments were either
by check or by credit card (which went into the Pending merchant card
charges account).
8. Receive payment
This is a function under which I select a customer and get to select the
invoiced items to that customer that are covered by the payment, which goes
to either the bank account or undeposited funds.
10. Funds transfer
This is what I use to do things like paying off the "credit cards' from the
"employee advances".
11. Reports
There are several reports I use, including the profit and loss statement,
the balance sheet, and the details by account. I have the accounts set up
so they easily transfer to the items on the US Schedule C income tax form.
There is supposedly a function to help that but it isn't flexible enough to
do what I need. I add some of the items on a spreadsheet before I put the
numbers on my tax form. Also, I depend on my local travel spreadsheet to
record my automobile mileage. When I transfer the non-reimbursable mileage
to the acccounting system I multiply by the mileage rate the IRS announces
for the year. However, it goes on the tax form as mileage and gets
multiplied there by the IRS rate.
When I take a trip I fill out an expense report with columns the same as
the categories of travel expense it the accounting system, and manually
transfer the numbers. If the travel is reimbursable (by a customer/job) I
include a copy of the form and appropriate receipts with the invoice.
There is a register for each account and I sometimes look at those. There
is also a "gee whiz" function that lets the user click on a report item and
pull up the details. There seem to be multiple ways of doing some things,
for example entering transactions directly into the register without going
to the main function screens.
That's about it for what I use. There are a lot of other functions, but I
don't seem to use them. Perhaps it is the relative simplicity of my business.
I hope this helps the accounting aspect of the roadmap.
Stan Klein
----------------------------------------------------------------------------
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Here is my chart of accounts. I edited it from the "chart of accounts"
report. There are some "other" accounts on the list below that don't show
up on the list I maintain but I think are there to cover items added to the
parent account that do not show up in the subsidiary accounts. I removed
most of them, but left some in. Some of the accounts, such as rent and
building repairs, are unused but I didn't delete them.
(Note: the accounts of type "Expense" are unmarked in the "type" column.
Also, I don't remember if I put the asterisks in or why they are there in
some names.)
Stan Klein Associates, LLC
03/29/03 General Ledger
As of March 29, 2003
Account Type (other than Expense)
Business Checking Account Bank
Accounts Receivable Accounts Receivable
Employee Advances Other Current Assets
Pending merchant card charges Other Current Assets
Undeposited Funds Other Current Assets
Fixed Assets Fixed Assets
Accumulated Depreciation Fixed Assets
Asset Accounts Fixed Assets
Books Fixed Assets
Equipment - computer Fixed Assets
Equipment - office Fixed Assets
Furniture and related Fixed Assets
Software Fixed Assets
Startup expenses Other Assets
Accumulated Amortization Other Assets
Startup expenses Other Assets
Accounts Payable Accounts Payable
Paid by personal check Credit Card
Petty Cash Credit Card
Travel Expense Account Credit Card
Sales Tax Payable Other Current Liabilities
Owner's Capital Equity
Contributed Fixed Assets Equity
Draws Equity
Investments Equity
Retained Earnings Equity
Bank Interest Income
Consulting Income Income
Other Regular Income Income
Publication Sales Income
Reimbursed Expenses Income
Reimb - Travel, Auto Income
Reimb Travel - Auto Mileage Income
Reimb Travel - Auto Pkg/Toll Income
Reimb - Travel, Auto - Other Income
Reimb - Travel, Car Rental Income
Reimb - Travel, Conference Income
Reimb - Travel, Local Trans Income
Reimb - Travel, Lodging Income
Reimb - Travel, Meals Income
Reimb - Travel, Other exp Income
Reimb - Travel, Transp Fares Income
Advertising
Bank Service Charges*
Cash Discounts
Contributions
Depreciation Expense
Dues and Subscriptions*
Equipment Rental
Insurance
Disability Insurance
Liability Insurance
Insurance - Other
Interest Expense
Finance Charge
Loan Interest
Interest Expense - Other
Licenses and Permits
Magazines and Tech Papers*
Miscellaneous*
Office Supplies
Outside Office Services
Postage and Delivery
Business Correspondence
P. O. Box
Publication delivery*
Publication direct mail
Postage and Delivery - Other
Printing and Reproduction
Other sales material/brochures
Publication Printing*
Publication Sales Material
Printing and Reproduction - Other
Professional Fees
Accounting
Legal Fees
Professional Fees - Other
Rent
Repairs
Building Repairs
Computer Repairs
Equipment Repairs
Repairs - Other
Taxes
Federal
Local
Property
State
Taxes - Other
Telephone and Internet
Travel - Local
Automobile
Auto - mileage
Auto - parking/tolls
Automobile - Other
Conference Registration*
Local Transportation*
Meals
Travel - Local - Other
Travel - Reimbursed
Automobile
Auto - mileage
Auto - parking/tolls
Automobile - Other
Car Rental
Conference Registration*
Local Transportation
Lodging
Meals**
Other travel expense*
Transportation Fares
Travel - Reimbursed - Other
Travel - Unreimbursed
Automobile
Auto - mileage
Auto - parking/tolls
Automobile - Other
Car Rental
Conference Registration*
Local Transportation
Lodging
Meals
Other Travel Expense*
Transportation Fares
Travel - Unreimbursed - Other
Utilities
Interest Income Other Income
Other Income Other Income
Other Expenses Other Expense
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