brand new to forum and to accoounting and need help/advise

[riverbank]

Hello
I will try to make this as easy as possible. I have reently started my own business. It is third party property management company. I also do maintenance and repairs for owners who properties I do not manage.
I have limited experience with basic accounting, but once my chart of accounts is properly set up I should have no problems entering transactions.
My problem I am having is with some owners I will purchase materials upfront and then later invoice them with the labour costs. I do not raise the price of the materials basically just flip the cost back to them. I am using the cash accounting system.
So how would I enter the materials I purchased for him, so my deposit would match.
I also figure I would have to seperate things since not all of it is earnings and I do not want to pay tax on the total of the cheque, just the labour costs.
I am so sorry I know this is a stupid question but I am stumped and pulling my hair out.
The person that was going to handle the accounting set up for me has backed out and now I am stuck.

[Duston McGroarty]

I wasn't going to try to answer this earlier but I didn't want to leave you
hanging with no answers...

I'm by no means an accounting guy but I would suggest using a program
like Quickbooks or Microsoft Money. Then hire an accountant to hash out
all your tax stuff just be sure to note in each transaction exactly what it's
for (property address, type of material, etc.).

Hope that helps a little!

[Evan]

You'd want to use an accounting system to really manage everything, and QuickBooks would be the best choice. Peachtree is another option (MS Money is a discontinued product, and was for personal finances), but I don't personally care for its interface.

One important thing to note that cash basis does not "match" anything. It's based on the receipt or payment of cash.

Using QuickBooks, you'd enter the expense, associate it with the specific customer/job. When you want to bill them, you'd add this expense there. "Matching" -- presto.

When you're looking at it from an income perspective, you DO have income of $100 (let's say) which may be the material and labor cost. But when you bought the materials that was inventory... when it was used, it was expensed when it was finally used. The difference, considering no other factors, would be just your labor costs charged.

[jamesray50]

Hi Riverbank - I'm wondering what country you are in because of the way you spelled cheque. If you use Quickbooks as your accounting program, after you set up your chart of accounts, you would also need to setup an item list. Quickbooks uses items to track what you buy and sell. When you set up the item you would pick what type of item, read the descriptions of the types carefully, then pick the account number that the item will post to. Some items will post to both income and expense, some just to one account.

When you pay a bill, or write a check, or invoice a customer for an item, you would use the item tab instead of the expense tab. You would then pick the item and it will be posted to the correct account.

This is a very brief summary of how Quickbooks works, but save this for reference in case you decide to go with Quickbooks. Today Amazon had Quickbooks for a little over $130.00. That's $50 off their regular price. Let me know if you have other questions.

[Evan]

Staples also has it for $180, though it's normally around $230... But who ever pays retail!? =) Thanks for pointing out how inexpensive it is, Jo Ellen!

[jamesray50]

I can't even get it that cheap through Intuit with my discount. Kind of pitiful. I use to pass my discount on to my clients, now I referr clients to the stores rather than directly to Intuit.

[FidelityAccounting]

Simply accounting is a good program to use as well. Both quickbooks and simply accounting have lower priced starter editions such as Simply Accounting express... these programs get small business owners started with the bascis. Simply Accounting Express (http://www.simplyaccounting.com/productsServices/accounting_solutions/first_step_express)

[lccglobals]

Yes of course Both quickbooks and general accounting have lower price start-up editions, but you could also hire a accountant as there should not be any error in chart or invoice coz it may effect badly to your customers. An accountant would also do your all Auditing, accounting, taxation and will also suggest you with legal norms.

[tylerhutchinson]

Quickbooks will solve all your problems and keep track of everything for you. Just add your business account to it. When you see money going in or out tag it and put a detail of what it is. Simple as that!

[jamesray50]

Quickbooks will solve all your problems and keep track of everything for you. Just add your business account to it. When you see money going in or out tag it and put a detail of what it is. Simple as that!

I have to respectfully disagree with you. Quickbooks will not solve all your problems. Although 85% of small businesses use it as their accounting program, it not set up correctly it will cause problems and you will not get the benefits from the program as you would otherwise. In addition to this, there are certain needs some businesses may need that Quickbooks alone may not be able to do, but an add-on product that will integrate with Quickbooks may be the solution.

[Evan]

it not set up correctly it will cause problems and you will not get the benefits from the program as you would otherwise.

Similar to the old saying -- garbage in, garbage out.

[CakeIO]

I am not a bookkeeping expert by any means but I have been running my own business for several years and have not opted into the double-entry bookkeeping method but instead made things very simple for my self. In fact I built by own software for this purpose that I designed for anyone else to use.

I use a simple cash method, basically if I have a check that came in I enter it as money in, if I am paying someone or purchasing something, that's money out. I only record it when the money actually leave the bank account or actually come into the account. Everything else gets ignored until the money actually exchanges hands.

This may not be the "best" way to track finances for a business but it makes things very simple for me and then I generate reports for my accountant that figures all the rest out from there.

Don't know if you're in position to change the way you do things at this point but that's my 2 cents for you. Good luck!

[Chris1812]

This is not a stupid question. I'm sure everyone has been in your position. Are you using any accounting software at the moment because I know of really user-friendly AP automation (http://www.corcentric.com)software. It will improve efficiency immediately and help make your life easier. Good Luck!

[Evan]

I am not a bookkeeping expert by any means but I have been running my own business for several years and have not opted into the double-entry bookkeeping method but instead made things very simple for my self. In fact I built by own software for this purpose that I designed for anyone else to use.

I use a simple cash method, basically if I have a check that came in I enter it as money in, if I am paying someone or purchasing something, that's money out. I only record it when the money actually leave the bank account or actually come into the account. Everything else gets ignored until the money actually exchanges hands.

This may not be the "best" way to track finances for a business but it makes things very simple for me and then I generate reports for my accountant that figures all the rest out from there.

Don't know if you're in position to change the way you do things at this point but that's my 2 cents for you. Good luck!

That is, though, a "double entry" accounting system if everything ties to cash. Dr Cash, Cr Revenue -- when you receive funds. Dr Expense, Cr Cash -- when you're paying a bill.

Any of my clients which do not maintain a formal accounting system I prefer using a cash-basis and having them classify everything that comes out of the checking account. That's acceptable. :)