REVIEW: QuickBooks Simple Start Edition 2007 - Including Tips on How to Set Up Your Chart of Accounts

UPDATED 3/19 - Added to end of post

QUICK TIP 1:  How to Pay Yourself and Still Be Able to Balance Your Checking Account and Have the Money Show Up as Income on Your Profit and Loss Reports

QUICK TIP 2:  How to Enter Credit Card Expenses and Payments so that They Don't Zero Out and Make it Seem as if Did Not Have Expenses
__________________________

REVIEW: QuickBooks Simple Start Edition 2007

I've always resisted using QuickBooks Financial Software because it seemed like overkill for my needs.  It has a lot of "extra" features like inventory, shipping label printing, employee and payroll tracking, business loans and fixed assets that a professional running a business solo with and a few contract assistants has no need for. But recently I discovered the QuickBooks Simple Start Edition 2007. 

Why I Switched From Excel

QuickBooks Simple Start Edition 2007 provides just what I need.  A simple accounting package that is just right for a self-employed individual who just needs to track income and expenses for their accountant or who does their own taxes.  Plus it's under $100.   It has just the right features to convince me to make the switch from using my own custom Excel spreadsheet to manage my business finances. I'm so glad I did because now I have many expanded reports and features.  For example, I can very easily:

• Keep track of client transactions and easily record details of what I did on each project - using the item and invoice function this is much easier than it was with an Excel spreadsheet.

• Record income and expenses into appropriate Schedule C categories (which I fully customized to my business needs).  This makes it really easy to prepare my own taxes.  (I did this using the Chart of Accounts and Sub-Accounts)  I can also get reports for any date range and any category showing a summary of all income and expense transactions.

Side Bar - Review of TurboTax Online for doing your own taxes

I used Turbotax Online this year...but next year I will try the desktop version - TurboTax Federal + State Home and Business 2006 Win/Mac or perhaps switch to H&R Block Taxcut 2006 Premium Federal + State + Efile.  They both get excellent reviews from many sources. 

I've used Turbox Online several years now and was very happy with it, but this year, I was very disappointed.  It was very slow (and I have enhanced hi-speed cable modem service!) They've also taken away a lot of the online help and constantly try to sell you a live tax advisor.)

More neat things QuickBooks Simple Start Edition 2007 lets me do...

Send Electronic Receipts to Clients via Email with a Single Click - I enter transactions into an invoice or "sales receipt" (which I have completely customized with my logo) and then with a single click it automatically generates a PDF Receipt and emails it to my client! I no longer have to take time to write out receipts while I'm at the client site. And they no longer have a paper version of the receipt floating around the house.  Less paper clutter!

Balance my Business Checking account - The Reconcile feature (under Reports / Accountant Reports) is soooo much easier to do than reconciling manually!  I just go in and check off that each item I've entered into Quick Books is on my statement and it does all the math for me.

Get up to the minute "Profit and Loss" reports - This helps me know at a glance how my business is doing and what my actual "take home" income is.  It also:

• Makes it really easy to pay estimated taxes on time.
• Allows me to see income summaries for each of my lines of business, website development, coaching, teaching, business consulting, etc.

See which of my organizing services are most popular via the "Total Sales by Item" Report - By creating "Items" for each of my professional organizing services, it lets me see which of my organizing services are most popular. I not only can see the number of items, I can also see the total hours I spend by type of service.  This was achieved by setting up "items" such as: Organizing - Kitchen, Organizing - Garage and changing the quantity field to hours.

Easy to Use Visual Interface & FREE Trial

The home page screen has everything you need to do right there.   You can use the icons in the main window to navigate or use the text links in the left column. (shown, click to see the full size) You can also download a free trial from Intuit to really get the look and feel of how it works.

Good Built in Help and Support

Although it's VERY easy to use, and the built-in tutorials are excellent.  I don't want to mislead you into thinking it was super easy to set up.  You do need to be familiar with basic accounting and with the Schedule C to set this up by yourself.  If I had not had lots of accounting & financial management training when I worked for Arthur Andersen (the auditing and accounting firm which sadly barely exists now since the Enron Scandal) I'm pretty sure I could not have done this on my own.  It took quite a bit of tweaking and creative manipulating to set up and get it to do everything I wanted.  But it was worth it!

Excellent FREE Live Support

If you do not have accounting background, don't despair, you can still use QuickBooks Simple Start.  It comes with 90 days of FREE live support. I called in to verify that my "creative" accounting approaches to my dilemmas were the correct solutions. The person who helped me was extremely knowledgeable and helpful. He was patient and answered all of my questions during a half hour call. His answers confirmed that I had done the right things plus he gave me a couple alternatives. (Whew!) But it might have saved me time if I'd called in immediately instead of figuring it out via trial and error.  : )

________________________________

QUICK TIP 1:  How to Pay Yourself and Still Be Able to Balance Your Checking Account and Have the Money Show Up as Income on Your Profit and Loss Reports

This is such a common need for self-employed people, I was really surprised they didn't have any built in help for this question.  Here's my solution.

The Problem. The problem was that when I recorded payments to myself in my QuickBooks business checking account register, I could only categorize it as an expense.  When I did that, it no longer showed up as income on my Profit and Loss Report. It also messed up my total expenses and tax accounting.

The Solution. What I did was create a fictional bank account called "Payments to Myself". Now when I write a check from my business checking account to myself, in QuickBooks I record the transaction as a "Transfer of Funds" from my business checking to my "Payments" account.  This allows me to be able to balance my business checking account by deducting the payments, but also still have an account that shows the money as income, not an expense.   

_____________________________

QUICK TIP 2:  How to Enter Credit Card Expenses and Payments so that They Don't Zero Out and Make it Seem as if Did Not Have Expenses

This is another common need for self-employed people, since most of us use credit cards and pay the bill with our business checking account. I was really surprised at this answer.

The Problem. The problem was that after I set up a register for each credit card, I began recording expenses and payments in the account - this causes my expenses to zero out!  They no longer showed up in my Profit and Loss Report!  But because I paid the credit card with my business checking, I had to record the payment somewhere or my checking account would not balance. (To further complicate things, I have two business credit card accounts. 

• One credit card gives me Amazon Rewards.  It also allows me to auto-pay the balance on the due date.  But I can only do that my personal checking account because that account has overdraft protection - unfortunately I can't put overdraft protection on the business checking account. I love being able to do this!
• My other business credit card gives me airline miles. I pay it with my business checking account. 

The Solution.  I pay the Amazon card with my personal account, so for that one, I simply don't record any payments! 

For the Miles account, I had to create another fictional bank account in my Chart of Accounts called "Credit Card Payments". Now when I write a check from my business checking account to pay the credit card, in QuickBooks I record the transaction as a "Transfer of Funds" from my business checking to my "Credit Card Payments" account. 

This allows me to balance my business checking account by deducting the credit card payments, and the expenses still show up as expenses on the Profit and Loss (P&L) Reports.  So, the tradeoff is that I can't actually balance the Credit Card register - I only record expenses and returned items there.  But that's okay.  I pay the balance in full every month so it doesn't affect anything.  It's more important to me that I make my checking account balance and get an accurate P&L report so I can pay my estimated taxes.   

____________________________________

If you use QuickBooks or are thinking about it, I hope these tips help you take charge of your own financial organizing!

Related posts:

• Neat Receipts Scanalizer Review

UPDATED 3/19 - Added to end of post

QUICK TIP 1:  How to Pay Yourself and Still Be Able to Balance Your Checking Account and Have the Money Show Up as Income on Your Profit and Loss Reports

QUICK TIP 2:  How to Enter Credit Card Expenses and Payments so that They Don't Zero Out and Make it Seem as if Did Not Have Expenses
__________________________

REVIEW: QuickBooks Simple Start Edition 2007

I've always resisted using QuickBooks Financial Software because it seemed like overkill for my needs.  It has a lot of "extra" features like inventory, shipping label printing, employee and payroll tracking, business loans and fixed assets that a professional running a business solo with and a few contract assistants has no need for. But recently I discovered the QuickBooks Simple Start Edition 2007. 

Why I Switched From Excel

QuickBooks Simple Start Edition 2007 provides just what I need.  A simple accounting package that is just right for a self-employed individual who just needs to track income and expenses for their accountant or who does their own taxes.  Plus it's under $100.   It has just the right features to convince me to make the switch from using my own custom Excel spreadsheet to manage my business finances. I'm so glad I did because now I have many expanded reports and features.  For example, I can very easily:

• Keep track of client transactions and easily record details of what I did on each project - using the item and invoice function this is much easier than it was with an Excel spreadsheet.

• Record income and expenses into appropriate Schedule C categories (which I fully customized to my business needs).  This makes it really easy to prepare my own taxes.  (I did this using the Chart of Accounts and Sub-Accounts)  I can also get reports for any date range and any category showing a summary of all income and expense transactions.

Side Bar - Review of TurboTax Online for doing your own taxes

I used Turbotax Online this year...but next year I will try the desktop version - TurboTax Federal + State Home and Business 2006 Win/Mac or perhaps switch to H&R Block Taxcut 2006 Premium Federal + State + Efile.  They both get excellent reviews from many sources. 

I've used Turbox Online several years now and was very happy with it, but this year, I was very disappointed.  It was very slow (and I have enhanced hi-speed cable modem service!) They've also taken away a lot of the online help and constantly try to sell you a live tax advisor.)

More neat things QuickBooks Simple Start Edition 2007 lets me do...

Send Electronic Receipts to Clients via Email with a Single Click - I enter transactions into an invoice or "sales receipt" (which I have completely customized with my logo) and then with a single click it automatically generates a PDF Receipt and emails it to my client! I no longer have to take time to write out receipts while I'm at the client site. And they no longer have a paper version of the receipt floating around the house.  Less paper clutter!

Balance my Business Checking account - The Reconcile feature (under Reports / Accountant Reports) is soooo much easier to do than reconciling manually!  I just go in and check off that each item I've entered into Quick Books is on my statement and it does all the math for me.

Get up to the minute "Profit and Loss" reports - This helps me know at a glance how my business is doing and what my actual "take home" income is.  It also:

• Makes it really easy to pay estimated taxes on time.
• Allows me to see income summaries for each of my lines of business, website development, coaching, teaching, business consulting, etc.

See which of my organizing services are most popular via the "Total Sales by Item" Report - By creating "Items" for each of my professional organizing services, it lets me see which of my organizing services are most popular. I not only can see the number of items, I can also see the total hours I spend by type of service.  This was achieved by setting up "items" such as: Organizing - Kitchen, Organizing - Garage and changing the quantity field to hours.

Easy to Use Visual Interface & FREE Trial

The home page screen has everything you need to do right there.   You can use the icons in the main window to navigate or use the text links in the left column. (shown, click to see the full size) You can also download a free trial from Intuit to really get the look and feel of how it works.

Good Built in Help and Support

Although it's VERY easy to use, and the built-in tutorials are excellent.  I don't want to mislead you into thinking it was super easy to set up.  You do need to be familiar with basic accounting and with the Schedule C to set this up by yourself.  If I had not had lots of accounting & financial management training when I worked for Arthur Andersen (the auditing and accounting firm which sadly barely exists now since the Enron Scandal) I'm pretty sure I could not have done this on my own.  It took quite a bit of tweaking and creative manipulating to set up and get it to do everything I wanted.  But it was worth it!

Excellent FREE Live Support

If you do not have accounting background, don't despair, you can still use QuickBooks Simple Start.  It comes with 90 days of FREE live support. I called in to verify that my "creative" accounting approaches to my dilemmas were the correct solutions. The person who helped me was extremely knowledgeable and helpful. He was patient and answered all of my questions during a half hour call. His answers confirmed that I had done the right things plus he gave me a couple alternatives. (Whew!) But it might have saved me time if I'd called in immediately instead of figuring it out via trial and error.  : )

________________________________

QUICK TIP 1:  How to Pay Yourself and Still Be Able to Balance Your Checking Account and Have the Money Show Up as Income on Your Profit and Loss Reports

This is such a common need for self-employed people, I was really surprised they didn't have any built in help for this question.  Here's my solution.

The Problem. The problem was that when I recorded payments to myself in my QuickBooks business checking account register, I could only categorize it as an expense.  When I did that, it no longer showed up as income on my Profit and Loss Report. It also messed up my total expenses and tax accounting.

The Solution. What I did was create a fictional bank account called "Payments to Myself". Now when I write a check from my business checking account to myself, in QuickBooks I record the transaction as a "Transfer of Funds" from my business checking to my "Payments" account.  This allows me to be able to balance my business checking account by deducting the payments, but also still have an account that shows the money as income, not an expense.   

_____________________________

QUICK TIP 2:  How to Enter Credit Card Expenses and Payments so that They Don't Zero Out and Make it Seem as if Did Not Have Expenses

This is another common need for self-employed people, since most of us use credit cards and pay the bill with our business checking account. I was really surprised at this answer.

The Problem. The problem was that after I set up a register for each credit card, I began recording expenses and payments in the account - this causes my expenses to zero out!  They no longer showed up in my Profit and Loss Report!  But because I paid the credit card with my business checking, I had to record the payment somewhere or my checking account would not balance. (To further complicate things, I have two business credit card accounts. 

• One credit card gives me Amazon Rewards.  It also allows me to auto-pay the balance on the due date.  But I can only do that my personal checking account because that account has overdraft protection - unfortunately I can't put overdraft protection on the business checking account. I love being able to do this!
• My other business credit card gives me airline miles. I pay it with my business checking account. 

The Solution.  I pay the Amazon card with my personal account, so for that one, I simply don't record any payments! 

For the Miles account, I had to create another fictional bank account in my Chart of Accounts called "Credit Card Payments". Now when I write a check from my business checking account to pay the credit card, in QuickBooks I record the transaction as a "Transfer of Funds" from my business checking to my "Credit Card Payments" account. 

This allows me to balance my business checking account by deducting the credit card payments, and the expenses still show up as expenses on the Profit and Loss (P&L) Reports.  So, the tradeoff is that I can't actually balance the Credit Card register - I only record expenses and returned items there.  But that's okay.  I pay the balance in full every month so it doesn't affect anything.  It's more important to me that I make my checking account balance and get an accurate P&L report so I can pay my estimated taxes.   

____________________________________

If you use QuickBooks or are thinking about it, I hope these tips help you take charge of your own financial organizing!

Related posts:

• Neat Receipts Scanalizer Review