Need Help with QuickBooks Pro 2004

[Sam Ceccola]

I am new to this product. I am starting at ground zero in learning it. I created a company and now want to start entering information.

I created a Petty Cash account and put money into it. At this point, I purchased some items from a store and use the CASH from Petty Cash. My items total $40.00 -There is $50.00 in Petty Cash.
Example:
Vendor: Lowe's
item1 - $10.00
item2 - $25.00
item3 - $ 5.00

Items 1,2, and 3 are resell-able items. So I want to record those.

Let's say, I sell item2. How do I (or can I) record all this in Quick-Books?

When I pull a report (I don't know what one), I want to see Item2 as sold and item1 and 3 as still in Inventory.

Is all of the above possible to do using Quick Books Pro 2004?

If it is, another question would be using the same scenario above except the $40.00 spent was paid by Credit card. How would that be recorded?

Thanks,
Sam

[kelly]

Sam,

I believe all that you mentioned can be done in QuickBooks. Reason I believe this can be done is I saw an office where everything was handled in QB. Inventory, invoices, shipping labels, reports. However, I'm sorry to say, I don't know how to do it myself.
-tony d

[Sam Ceccola]

Thanks tony: I'm starting to go through this new book I purchased on QuickBooks Pro 2004. I've reloaded the initial data file several times so far. One of these times I may get it right.

Sam

[Dan18960]

Sam,

Did you setup your chart of accounts? Did you setup up your General Ledger, Accounts Payable, Accounts Receivable, Inventory?

You also MUST realize that QB is a LOW level accounting package - it will allow you to delete any entry without more than a "are you sure" dialog box. It ALSO will change ALL of your pricing on an inventory item that can effect your P/L statements.

Example - suppose you buy a hard drive for $49.99 (including shipping) one month and sell it for $69.99 = $20.00 profit. Ok that is straight forward. BUT now let's say you buy the SAME hard drive off a GREAT deal on E-bay and only pay $29.99 and sell it for $69.99. Now you have a $40.00 profit or you have sold 2 hard drives for a total of $60.00 profit. NOW the issue with QB! When you enter the SECOND hard drive costing (remember you already HAVE that model in your inventory) it changes the COST of the ENTIRE inventory item - so when you run a P/L report you find that you made $80.00 profit WHICH IS ENTIRELY INCORRECT!

Now for someone who has a constant cost of materials - this is not a problem - you buy a widget for $2.00 and you sell it for $5.00 - no costing issue or P/L errors.

This one of the issues with problems most have in the computer business since parts can fluctuate so dramatically.

As to your question about Petty Cash - you have to credit your GL for the $50.00 cash to debit Petty Cash (I know this sounds backwards - but it is ACCOUNTING). Once you use a portion of your petty cash, you have to credit petty cash and debit inventory and debit the GL so you have an accounting of Inventory being created. When you sell your inventory you will credit inventory and GL, which Zero's the debit and credit accounts receivable.

You might want to look at Temple Ft Washington campus - my boss teaches QB there for users also.

[Freehold Fred]

Sam,

The best way to learn to QuickBooks is to:

1) Study the navigators flowchart
Click on Customers and EVERYTHING related to selling and Accounts Receivables is there and you MUST follow it to the T.
2) Go through the tutorials, videos, and HOW DO Is and the Help for your business or industry
3) Start with the Dummies book (only one in the Dummies series I actually recommend)
4) Take a course (am I allow to blatantly advertise? --- got me in trouble last time):eek::eek::eek:
5) Get started with a Certified QuickBooks ProAdvisor, which I am.

Assuming you started QB, it asks you what type of business. I assume you are consulting and selling retail incidentally. If so, choose Consulting; otherwise, choose Retail. By doing so, you create a list of financial accounts, called the Chart of Accounts. In this list you will find a few income accounts (you probably only need one, SALES or FEES), several expense accounts (utilities, phone, rent, materials, etc.).

The heart of QB is the Item list (goods and services). These items appear on invoices, sales receipts, etc. Most importantly they link to your financials, your Chart of Accounts. So, for example, if you offer consulting services, you must have an item, call it CONSULTING, and in the setup of this item, you choose SALES or FEES for the income account.

QB's has two kinds of inventory: inventory parts, whereby you are counting widgets. If you buy the same widget later on (as Dan hinted at), QB uses what is called average price costing. In an accrual accounting setup, the cost is NOT reflected until you actually sell the widget, but again it uses average cost, not the absolute cost. In order to use this kind of inventory tracking, you must answer yes to inventory during the Easy Interview or later turn on inventory under Edit | Preferences.

The other kind of inventory is: non-inventory parts, whereby either you purchase one thing and sell another (buy tomato sauce, cheese, but sell pizza or are simply not interested in keeping track of quantity on hand and getting inventory valuations). In this case, and on an accrual basis, either when you enter a bill for the parts or 'write' a check from your petty cash account for the part, you will hit an expense or preferably a COGs (Cost of Goods Sold) account.

You should set up Petty Cash as a Bank Account?

When you buy the items:
1) Write a check from Petty Cash, designate the item if you set it up as an inventory-part item or simply as an appropriate expense or COGs. There are two tabs when writing checks or entering bills: expenses, items. Use items only if you created items.

When you sell an item:
1) Enter a Sales Receipt for the customer, designate the item, the amount, (sales tax is another issue).

2) So far, you are on cash accounting basis. To see your profit, run a Company & Financial Report | Profit and Loss Standard. Keep in mind, ALL reports are date sensitive, so watch the reporting period.

3) Invoicing instead of issuing a Sales Receipts generates an Accounts Receivable automatically. But in either case, you MUST follow the flowchart: Receive Payments, Record Deposits. Similar, Entering Bills, Paying Bills handles the Payables side.

Buying items with credit cards can be simple to complex. In a strict sense, you should enter charges as you go: Banking | Enter Credit Card Charges. At the end of the month, QB requires that you reconcile your Credit Card Statement and allows you make a full and partial payment and allocates any finance charges.

A simpler way is to enter the purchase as a Bill under Vendors but use the name of your credit card as the vendor. On an accrual basis, this immediately counts as an Expense or COGs (for non-inventory parts). When you get your statement at the end of the month, you 'write' a check for all of your line items that you purchased by going to Pay Bills under Vendors again.

QuickBooks is the only accounting software that people love. Think of using pieces of paper (invoices, bills, checks, deposit slips), follow the navigator exactly while learning the program, and leave the debits and credits to others.

Fred

[Freehold Fred]

Dan,

In QB, you have an option to have an inventory price be updated in the item list and to pop-up next time, but this does NOT change your P&L!

QB uses AVERAGE INVENTORY COSTING only, so that in your scenario, when you sold one HD and then the other, the COGS is for each HD separately, $49.99 and $29.99, and the profit is $20+$40=$60, which is CORRECT!

However, if you purchased both HDs, and sold one at a time, the profit for the first one would be $30 ($69.99 less avg cost 39.99), and the profit for the second one would also be $30, again totalling $60 for both. Now if the price dropped further, NOTHING changes in the past; but AVG COST going into the future starts all over.

IF you need FIFO, or if everything is a one-of-a-kind, then QB is not the program to use.

If you are somehow still getting $80, send me a backup copy of the file and a sequence of the transactions that generated the $80. Let me know if you have deleted any transactions.



Example - suppose you buy a hard drive for $49.99 (including shipping) one month and sell it for $69.99 = $20.00 profit. Ok that is straight forward. BUT now let's say you buy the SAME hard drive off a GREAT deal on E-bay and only pay $29.99 and sell it for $69.99. Now you have a $40.00 profit or you have sold 2 hard drives for a total of $60.00 profit. NOW the issue with QB! When you enter the SECOND hard drive costing (remember you already HAVE that model in your inventory) it changes the COST of the ENTIRE inventory item - so when you run a P/L report you find that you made $80.00 profit WHICH IS ENTIRELY INCORRECT!

[Dan18960]

Dan,

In QB, you have an option to have an inventory price be updated in the item list and to pop-up next time, but this does NOT change your P&L!

QB uses AVERAGE INVENTORY COSTING only, so that in your scenario, when you sold one HD and then the other, the COGS is for each HD separately, $49.99 and $29.99, and the profit is $20+$40=$60, which is CORRECT!

However, if you purchased both HDs, and sold one at a time, the profit for the first one would be $30 ($69.99 less avg cost 39.99), and the profit for the second one would also be $30, again totalling $60 for both. Now if the price dropped further, NOTHING changes in the past; but AVG COST going into the future starts all over.

IF you need FIFO, or if everything is a one-of-a-kind, then QB is not the program to use.

If you are somehow still getting $80, send me a backup copy of the file and a sequence of the transactions that generated the $80. Let me know if you have deleted any transactions.

Fred,

I (we) actually use Business Works for our accounting. It is a "true" accounting application since it does NOT let you delete ANYTHING. There has to be a trail of all transactions. If I make a mistake in posting - I have to make the correction in all areas of the post. I can't just say "oops" and hit the delete key.

Checks written and voided are always tracked. The reports show when it was written, who it was written to, the check number, the amount of the check, AND THE VOID timestamp in the register. Sooo, IF that check mysteriously goes missing - there is a red flag that goes up! And it stays in the historical record forever.

Of course, Business Works isn't a sub $1000.00 software either! But it isn't in the $20k area of Great Plains or MAS 2000 either. It meets that middle of the road accounting need for companies that want accountability over convenience.

I am not saying there is anything wrong with QB or Peachtree - but they do leave a lot of tracking to be desired for someone wanting NOT to make it easy for a "shady" bookkeeper.

As for the inventory - that is constantly brought up on several forums I subscribe to.

Rich (my boss) is a QB ProAdvisor and instructor AND that is why we are NOT using QB in our accounting. He also is a Sage Advisor for Business Works and MAS 2000 and a CPA. SOOOO, I think I am covered - but thanks for the offer.

[Terry Hanushek]

Fred

Great response! I'm sure that Sam appreciates your detailed getting-started tutorial.

4) Take a course (am I allow to blatantly advertise? --- got me in trouble last time):eek::eek::eek:
5) Get started with a Certified QuickBooks ProAdvisor, which I am.
You don't have to worry about that here. :) We consider you a resource, not someone who might steal our limelight.

Thanks for posting

Terry

[Sam Ceccola]

Even though I have QB Pro 2004, It might be too complex for what I want to do. I' thinking about writing an app that is lsot less complicated. I'll do it in VB 6. This is not a firm decision but I am toying around te idea.

Question: Is there a way to capture data directly in eBay, programmatically? I'm thinking this: If I write the app, I would have and field call "Shipping Cost" ; another one called "Listing Fees", etc. Now, I can copy and past from eBay into my application but it would be nice to have my application get the information programmatically rather than have human interruption.

Anybody know if this can be done? If so, can you explain how????

Thanks,
Sam

[Freehold Fred]

Dan,

Although in previous versions, one had to turn on the audit trail under preferences, in QB2006 the audit trail and audit reports are always on!

Fred,

Checks written and voided are always tracked. The reports show when it was written, who it was written to, the check number, the amount of the check, AND THE VOID timestamp in the register. Sooo, IF that check mysteriously goes missing - there is a red flag that goes up! And it stays in the historical record forever.



Shady bookkeeping has nothing to do with the s/w being used nor the price of the s/w. What was Enron using? Good procedure to follow is that the person authorizing the check payments is NOT the same person writing the checks.

I am not saying there is anything wrong with QB or Peachtree - but they do leave a lot of tracking to be desired for someone wanting NOT to make it easy for a "shady" bookkeeper.

Inventory is not one of QBs strengths and I do not recommend QB for Manufacturing. My Big Boys use SAP.


As for the inventory - that is constantly brought up on several forums I subscribe to.

Tell Rich (your boss) that any issues with erroneous data to post on the QB ProAdvisor Forum at http://intuitmarket.intuit.com/QBA/Home.asp. This forum is a high caliber forum. If the $80 profit scenario that you outlined for Sam still holds, we all would like to know the sequence of events that led there. Otherwise, you must again understand that average costing gives rise to 'unexpected' results when inventory which was purchased at various prices remains in stock. If inventory is fully consumed or bought and sold one at time, average cost is not a factor over the full life cycle of the inventory and the $60 paper and pencil profit is the same in QB's P&L. It has to be!

Rich (my boss) is a QB ProAdvisor and instructor AND that is why we are NOT using QB in our accounting. He also is a Sage Advisor for Business Works and MAS 2000 and a CPA. SOOOO, I think I am covered - but thanks for the offer.

Lost in all this are Sam's needs and I think we both scared him away!:wink::wink::wink:

[Freehold Fred]

Sam,

Due to the breadth of the subject, I cannot provide another detailed explanation. I shot my load for the night :smash::smash:, but go here:
http://snipurl.com/eBayAccounting and you will find a ton of management programs, including add-ons to Excel and QuickBooks.

I am always a believer in KISS :laugh::laugh:

Even though I have QB Pro 2004, It might be too complex for what I want to do. I' thinking about writing an app that is lsot less complicated. I'll do it in VB 6. This is not a firm decision but I am toying around te idea.

Question: Is there a way to capture data directly in eBay, programmatically? I'm thinking this: If I write the app, I would have and field call "Shipping Cost" ; another one called "Listing Fees", etc. Now, I can copy and past from eBay into my application but it would be nice to have my application get the information programmatically rather than have human interruption.

Anybody know if this can be done? If so, can you explain how????

Thanks,
Sam

[Dan18960]

Sam,

One of the consultants I use from time to time actually wrote his own program for billing and tracking. He "LOVES" Lotus Approach (we all have our favorites) and he has been using it for about 2 years now.

You might be more efficient with a program that is geared more to your accounting needs.

Sometimes there is a need to recreate the wheel when app developers try to be the one-size fits all.

[Sam Ceccola]

but it would be nice to have my application get the information programmatically rather than have human interruption.
You might be more efficient with a program that is geared more to your accounting needs..I'll contact eBay Tech Support today. Maybe they can tell me if access to some of their data can be done. I'll post the results so that you know the answer.

Thanks to all for your input.

[mylanta]

Take a course (am I allow to blatantly advertise? --- got me in trouble last :eek:time)

Fred,
That whole experience was both an eye opener, and could well have been the spark that caused this forum to be. It was one of the single most one sided reprehensible experiences, I have witnessed on the internet.
And of course you were not in any way blatently advertising besides.
This is your living and is hardly an advertisement, it is a helpfull suggestion and your response is an extremely well presented tutorial besides.
As long as what we do here doesn't become offensive to all, it is common for most of us to say what we do for a living. Even if it was not a good idea, first you would receive a private message and the post might be edited, but never removed with no explanation and we have yet to do this with anyone, anyway.
Please also check your PM next time you come on Fred.

[Sam Ceccola]

Fred/Dan:

I have been delayed in getting back to you because I am trying to check out ALL my options. I am leaning toward writing the application but then I think, why?? It's there in QB!!

I need to make a decision. Another factor I am considering is: Other than what I'm selling on eBay, do I want to spend the time learning QB? It may be a one-time shot.

Fred, you gave me a very good explanation on how to learn QB. Thank you for it. Between your advice and Dan's -- as I said, I need to decide where to go from here.

I did send eBay Technical Support an email concerning the grabbing of certain data from their files. As I said in an earlier post, I will respond with their reply.

Thanks,
Sam