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Old 08-02-2009, 08:02 AM
fredramsey fredramsey is offline
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Join Date: Aug 2009
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Initial Setup Advice Needed

If anyone has a few minutes, here's my situation:

I have not installed the software yet (I haven't bought it yet, either, but in a few days, I will).

I have expense receipts from the 1st of July that I have been paying for out of my personal money. I am about to open a checking account in the business name.

How would be the best way to set this up? I was thinking of creating a fake cash account and making sure all the current expenses were covered by an equal balance in this account.

Any advice on how to go about this? Thanks in advance.
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Old 08-02-2009, 08:44 AM
shazinoz shazinoz is offline
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Join Date: Oct 2005
Location: Ballajura, Western Australia
Posts: 933
You don't mention whether you have any knowledge of QB or accounting, so I'm not sure how much detail you're after, but there are a few options of recording &/or tracking these business purchases that have been paid by you personally, depending on your preference and your situation's legal requirements:

Tracking via "Owners Equity"
Double-click on the owner's equity account (in the Chart of Accounts list) & enter the purchase(s) in the register.
Enter the date, Transaction/Rcpt No, Vendor Name, enter the correct expenses account in the "Account" column (or click on the "Splits" button (bottom of register) to allow you to allocate to appropriate multiple expense account(s) along with memos), enter the amount(s), then click on the "Record" button.
When you're ready to reimburse yourself, you can then "Write Cheque" to yourself & post the full reimbursement amount back to your owner's equity account (no tax code).

Tracking as a Liability
The other way of handling it if you want to be able to track a separate running balance of what is owed to you, is to create an "Other Current Liability" account called "Owed to Owner" or similar (because in effect, you've temporarily "lent" the business this money by using your own personal funds that the business then "Owes" you back)
You would then enter the purchases exactly as described above (but in this "Owed to Owner" liability account register instead), then "Write Cheque" to reimburse, allocating the full reimbursement back to the "Owed to Owner" account.
This method allows you to see what is specifically owed to you from the Chart of Accounts/in P & L reports & the balance of this "debt" will decrease every time you "Write Cheque" to reimburse yourself.
Shaz Hughes (Dip)Fin ACQ NSW, AAT ABN MICB
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Old 08-02-2009, 08:59 AM
fredramsey fredramsey is offline
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Join Date: Aug 2009
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Originally Posted by shazinoz View Post
You don't mention whether you have any knowledge of QB or accounting
Thanks, shazinoz.

No experience in either, I've been a programmer, so software is not a problem.

I guess I didn't give enough detail on my situation, however.

Sole proprietor, business-to-business service. I have a large book on Quickbooks that goes into a lot of detail, but it's a bit overwhelming.

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