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Thread: Kinda of an Accounting Question

  1. #1

    Default Kinda of an Accounting Question

    Hello everyone:

    So I'm using Quickbooks in my small business but it seems like the purpose of the program (and how it's typically used by most businesses i'm guessing) is to follow the generally accepted accounting principles (GAAP) to keep track of the flow of funds in order to prepare your tax return. I was originally trying to use it to both prepare tax return and also to tell me as much information about the business as possible (examples: complete list of every item in the business and how much it is all worth, keeping track of how much money goes into specific company development projects, trying to track investments, etc.). Now it seems like that's overkill for accountants and general purpose accounting and I should keep track of all this stuff elsewhere and use quickbooks for the bare minimum for filing taxes. Is that what people are doing and, if so, what software are you using to track all this other information? If not, are people just doing this stuff within quickbooks via their accountant or are people generally not worrying about this stuff?

    Thanks in advance

  2. #2

    Default

    So I think I for the most part figured out the answer to my question. It is similar to the guy's response on my other thread only I need to search/research into EAM software. Thanks anyways. I'm probably good now but feel free to reply if you think you know something I don't and wouldn't mind sharing

  3. #3
    Mr. Tax Man
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    Default

    Much of what you describe isn't accounting. QuickBooks does have a fixed asset manager and can keep track of inventory assuming you have the right package that can offer you these full benefits. But tracking time on projects and determining profitability is more project management. Tracking investments is also not anything any company does as one doesn't need to know the fair value of investments at every moment of the day.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  4. #4

    Default

    Yes. Thank you for confirming this.

    Are you sure all companies don't track investments? Or do you mean they just don't do it via their accountant and keep track of it for taxes?

  5. #5
    Mr. Tax Man
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    I've audited Fortune 1000 companies and small community organizations. They don't track investments in their accounting ledgers -- they post only what is needed for an adjustment and that is because they issue financial statements.

    For tax purposes, you don't get to write off or benefit from unrealized losses or have to recognize unrealized gains. So anyone that tries to maintain their books in accordance with what they file with the IRS don't record a lot of activity (dividend / distributions essentially).
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

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