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Saturday, November 15, 2008

Some Quick Quickbooks Questions

I think that is the first phrase I have ever written involving three consecutive Q-words....

OK I recently decided that my PhD and Excel were no match for the accounting and regulatory demands of running a top-flight consultancy. At the advice of my CPA I broke down and bought Quickbooks (Pro 2009, if it matters).

I know some of you are also instigators of creative destruction, and so I turn to you entrepreneurial, computer savvy geeks to rescue me from my overeager key stroking:

I came back from a business trip and first entered in all of my receipts as Bills like a good little boy. Then I went to Pay Bills and selected all of them, then hit Pay (or whatever). I thought it was going to take me to another screen, but instead it processed all of them as if I wanted to pay by printed check, and now is waiting for me to print them.

However, a few of these "bills" were actually my taxi fares, for which I used cash that had been withdrawn from my personal checking account. And the other ones were meals, for which I used my business debit card. So two questions:

(1) How do I reverse the Paid Bills, so that Quickbooks isn't waiting to print these checks out?

(2) What's the best way for me to handle the fact that I paid a business expense with cash from my personal checking account? I can think of at least two solutions:

(a) Enter an influx of cash into the business as Starting Equity (or whatever the term is). Then count the taxi Bills as paid for with business petty cash.

(b) Withdraw the exact amount of cash from the business checking account as I spent on taxi fares, then put that cash into my wallet. Then tell Quickbooks I paid those bills with business petty cash.

I would appreciate any suggestions. Note that I am trying to obey the dictates of both GAAP and the laws of Tennessee.

8 comments:

  1. The best "free advice" I've ever received from an accountant was to never incorporate. I've been a self-employed consultant for about a dozen years, and I've never considered it necessary to spend much time on the books, or any money on accounting software.

    A sole-proprietorship dressed-up as an LLC does not limit its liability.

    I'm sure that free advice won't help you, but I hope it can help some poor soul thinking about incorporation.

    ReplyDelete
  2. Sydney11:36 PM

    How do I reverse the Paid Bills, so that Quickbooks isn't waiting to print these checks out?

    Hank Paulson can help you with this.

    ReplyDelete
  3. Ha ha! You fool! You fell victim to one of the classic blunders! The most famous is never get involved in a land war in Asia, but only slightly less well-known is this:
    Never ask Economists questions about actual money when death is on the line! Ha ha ha ha ha ha ha! Ha!

    Seriously, try http://forums.quickbooksusers.com/

    ReplyDelete
  4. Woody, FWIW, I did it to get health insurance. (My son has a heart murmur and I couldn't get him on any policy as a private applicant.)

    Now I understand how you are able to show net income of zero to the government, too. (I.e. you don't keep books.)

    Lwhays, I appreciated your funny lines all the more so when you actually gave me a useful response, as opposed to two other people who shall remain nameless.

    ReplyDelete
  5. Gene, stumbled across your blog. I gave some thought on how to account for business expenses that you pay personally, your #2 question. It’s actually a pretty common problem, especially with mobile professionals who own their own businesses. Hope you like my solution.

    http://www.qbgarage.com/kb/questions/13

    ReplyDelete
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