Keeping Records: Non-corporate businesses Part 1/4

Today's workshop was very well attended. I glanced up at the end and noticed there were 44 participants on the call.  Very few questions though, must have been because everyone knows there' so much to know... lots of content and concepts presented in one hour and I'm sure everyone will want the recording to play it again. If you attended it's available for 48 hours for $5.00 with the promo code, and if not, purchase the recording directly from my website.

If you haven't already, sign up for next week at www.ipbc.ca

I mentioned that the sample data files will be available under the eCommerce tab at Keeping Records  www.taxdetective.ca. I'll be loading them up in a few minutes.

Here are the questions and answers for today:

Q: Why would you not just set up business accounts to post the amounts straight there instead of using a cash clearing?

A: If you're a self-employed business person, you're likely living out of your personal lines of credit and credit cards. I like to set up a separate set of books for the business in QuickBooks, and keep track of the personal aspect of our family finances in Quicken. I don't want to miss out on any deductions, so I record all the business purchases and business deposits to the clearing account in Quicken, then check to make sure I've captured all of those same expenses and deposits in QuickBooks using a mirror image clearing account in QuickBooks. Every month I find that I have missed something that I wouldn't have caught if I didn't have this little control system in place. Plus I can report to my spouse on how I'm contributing to the household this way as the net of this clearing account is my contribution to household cashflow.

Q: Are you using Clearing instead of Owner's Draw? Are they the same?

A: No, I'm using Clearing in addition to Owner's Draw. They are not the same. The Owner's Draws may not reconcile to the Clearing Account in Quicken. Let's be clear, I'm doing this to reconcile to the money. If I make adjustments later, I may not always go back and adjust the money in the personal records as it just isn't as important to do that unless there's a burning desire for incredibly accuracy, which given that most people don't even record their personal financial transactions, I somehow doubt that's necessary.

Q: Are you able to share the sample chart of accounts you set up?

A: Yes, you'll find more information and sample data files under the eCommerce tab, where there is a separate page called Keeping Records.

Using Internet Explorer because it has a SAVE As feature, save the file to a folder and then open QuickBooks to restore from *.QBB or Quicken to open the data file.