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Pay 'em by check, enter every nite in Quickbooks and assign it to the proper account.
Pay 'em by cc. and enter the rcpt in Quickbooks, you guessed, every nite to the proper account.
End of year, all rcpts are listed with supplier and account heading.
Cash purchases, same thing.
Other alternative, three tiered file on the desk-check, cc. and cash sale.
The real trick is not to have them everywhere waiting to be entered and to also not forget to enter them to each job if T&M.
A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Every night?
You got to be kidding. My wife doesn't even get that kind of attention.
I always knew you had a dark side, Calvin. Anybody else out there got any other better ideas?
FYI, I did graduate with college with a degree in business, majored in accounting, but EVERY NITE just will not work.
By the way, I do not have bills everywhere. I only have them in my truck, my briefcase of the day, my overalls, the dining room table, my diary, my desk and my pants, usually. So, bookkeeping should be no problem...Yeah, right.
Don K.
EJG Homes Renovations - New Construction - Rentals
The every nite is the pat answer. After 3 wks, you'd wished you had done it every nite.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
yeah... i tried the every night bit.... wghich became every week... then every month....
finally i hired a part-time bookeeper.. comes in every wenesday am for about 2 hours with me
he spends another 4 to 6 hours off site
how's VA working out... miss L. I . ?Mike Smith Rhode Island : Design / Build / Repair / Restore
Hi Mike;
I remember when I hired my first secretary part time to do some filing. It was a worthwhile relief. I should probably get a bookkeeper too. Paperwork is a PITA. I'm going to have to sit down for a few days and get some sorted out - soon.
Thanks for asking about VA. Don't miss LI at all. I'm in an agricultural area, with cows horses, lama and I'm told even a few bison around here. The pace of life is much more comfortable, expenses better and some good friendly down to earth people. It's country and people help each other. Yesterday, I had a package to overnight that I couldn't get to until real late in the day. I called the local frame place where you can drop off and asked when the pick up was. The lady said he had already picked up, but she would take care of it. I went down, and after I gave her the package, she called the driver on his cell phone and made him come back to pick it up. Then I get a phone call from my helper at 7 pm. He was still at the job - decided to keep working after I left, worked late, to finish painting the place we're doing. I was in shock.
I could go on, but won't hijack. Sorry now I didn't pay somebody to finish the NY project so I could have come down a year earlier! If you are ever nearby, let me know. We can hook up.
Don K.
EJG Homes Renovations - New Construction - Rentals
you bet.....Mike Smith Rhode Island : Design / Build / Repair / Restore
Isn't that the truth...you made me laugh at loud.
I have a copy of quickbooks but haven't starting using it yet. I need to get more electronic and start to use Quickbooks but for now I currently use Excel and a whole bunch of binders. I spec houses and I keep a binder for each major component. I try to pay as much as I can by check - reluctantly by cc - but only one - AMEX.
When I pay the bill I categorize the bill and file it into its binder. For my major suppliers I transcribe their statements into electronic excel spreadsheets - time consuming but I like being able to slice/dice the numbers and helps with cost analysis.
I shoot for a monthly reconcilation when I get my bank statements. Sometimes I miss a month if yo want to know the truth but I take my bank statement and use that to update my excel spreadsheet for overall costs.
That being said, if I could get to Quickbooks i(instead of my excel system) t has the basics of being a decent system for accuracy and getting data computer based. The downside is the time. I currently try and have my wife help me but she is not very computer literate and unfortunately I am not very trusting to go outside just yet. For the next house I might hire a bookkeeper that the wife could manage.
Pay 'em by check, enter every nite in Quickbooks and assign it to the proper account.
I have thought of doing that, but I see two problems:
#1 Not everyone likes to take checks anymore.
#2 People who do take checks seem to want to wait for more than 30 days before cashing it. It makes it so you really have to be careful with your checking account.
Pay 'em by cc. and enter the rcpt in Quickbooks, you guessed, every nite to the proper account.
The problem I see here is that credit cards/debit cards don't work as well as receipts. For example, say you but 3 small hand tools one day. Then you buy 5 books on another day. After that you buy 2 different small boxes of screws. All of this happens in the same month. The balance sheet you receive at the end of the month doesn't prove which purchases were which category for the IRS.
End of year, all rcpts are listed with supplier and account heading.
Cash purchases, same thing.
That's the other thing. If you use cash and save the actual receipt instead of a check (which can also be used as a receipt), what is the best way to keep those receipts organized as you acquire them?
It's not so much entering the information that I'm concerned about, but organizing the actual paper that must be saved for my accountant and for a possible tax audit.-T
That's the other thing. If you use cash and save the actual receipt instead of a check (which can also be used as a receipt), what is the best way to keep those receipts organized as you acquire them?
T,
I save petty cash reciepts in an envelope on my desk, and when they total up a couple hundred dollars, I write a check to myself for tyhe total, and enter the amounts into the proper category. For instance I may have $400 in PC rcpts. I write myself a $400 check, and enter a total of $275 in materials category, $100 in office supplies, and $25 in entertainment. ( or whatever your category totals are)
Then I bundle the rcpts, and put them in a folder next to all the other folders for the other categories that get paid by check. By the end of the year I have written 3 or 4 checks to myself like that.
Bowz
Organized, keep them in that 3 tiered file on the desk.
then:
Paid invoices to major suppliers get filed according to supplier.
Minor misc go in minor misc.
cash rcpts go in.........................cash rcpts folder.
Do whatever works for you.
But do it. It's not that hard. Requires diligence.
A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
#1 Not everyone likes to take checks anymore.
#2 People who do take checks seem to want to wait for more than 30 days before cashing it. It makes it so you really have to be careful with your checking account.
I have found no one that won't take a check. Might be regional, but here all my suppliers will take a check. Some don't want you to pad your points with a cc. but all accept checks. All the non account purchases will take a check. They all will take a cc.
So what if they take a year to cash it. In your books it is showed as paid. If you don't keep an accurate up to date balance to cover all checks written, it certainly my become a problem. But then you have a bigger problem than them not cashing it.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
It really does not matter how you pay, check, CC, or cash the receipt is the ONLY GOOD record if it comes push to shove.It is the receipt that show the breakdown of what was bought. Now a few things like rent or mortgage payments the check would be enough as it is repeating payment of the same amount for a single purpose.But if you go into a Lowes, or a hardware store, or a lumber yard you can be several different types of materials (lumber, hardware, tools, and paint) all for 3 different jobs or for one job. And the tool would be something that was capitalized and not assigned to a job.Only the receipt shows the details.I use Quicken, but when making an entry you can split it. Each item in the split has it's own memo, catagory, and class entry."People who do take checks seem to want to wait for more than 30 days before cashing it. It makes it so you really have to be careful with your checking account."You need to reconcile the checkinng about and look at what the register says. That shows you how much you have available to spend.Quicken makes it easy to reconize the checking account. And likewise the credit card accounts.I have a folder for each month. And each months receipts, statements, and bills end up in the appropriate folder after entering in Quicken.When I pay by check from home (I can't remember the last time that I carried a checkbook with me). I print out the checks on Quicken and staple the stub to my part of the statement.Then at the end of the year I go through those and thinks like utility bills I colllect the whole years by utility. Then I staple that stack together. And for the CC's I would take the statements and all of the receipts on that statement (they would be either in that months folder or the previous months) and staple all of those receipts to that months statement. Then use a large oversize evelope to file everything fo rthe year.But all of that is just to organize it IF I never needed to find it again. The numerical data had long beeen in Quicken and it is easy to printout the numbers needed all totaled for the year.Several times I have used this "system". One was to tying to find out if something was under waranty. I searched Quicken and found the date and type of payment.Another time I had used a deck stain that I like, but could not remember the brand. Did a search and found the purchase and type of payment. Used that to pull the receipt and from the receipt went to the store and found the brand..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
The problem I see here is that credit cards/debit cards don't work as well as receipts. For example, say you but 3 small hand tools one day. Then you buy 5 books on another day. After that you buy 2 different small boxes of screws. All of this happens in the same month. The balance sheet you receive at the end of the month doesn't prove which purchases were which category for the IRS.
You must make a decision as to what category applies to every expenditure. If you set up quickbooks once, it will make it pretty easy, because it won't let you pay anything unless you attribute it to an account. You still need to enter each expenditure, but you need to do that no matter what system you use. I input my credit card purchases once amonth, when I get my statement. The big benefit to Quickbooks is that it keeps track for you and at the end of the year, most of the work is done.
I Have QBKS. but could never reconcile c.c. reciepts (entered daily) to the c.c.
statement. Any suggestions? thanks
Remember, this from a dumb carpenter.
I write a check out of one of my checking accounts to the amount of the credit card transaction pertaining to the business. This treats the Credit Card company as a vendor.
I also write a check out for the total of all my cash purchases. The cash has come out of my pocket (owners equity) and I am merely reimbursing the owners equity with the business check.
So, for all intents and purposes, the checkbook rules. All my business purchases are essentially out of the checking account.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I agree with what Calvin says but I thought I would add a couple things.
If you mean what is the actual process to reconcile.....Go to the "Banking" page, click on reconcile, choose the account you want to reconcile from the "Account" drop down list, type in the ending balance, and click continue. From there you just match up the costs you have entered into QB with what your statement says.
Also, as Calvin says you can write a check to yourself to cover petty cash purchases. You can also do a journal entry (again on the banking page). For this you would put a credit for your owners capital investment account and put a debit for either the job related costs or to an appropriate expense account.
No, I didn't figure this out myself. My accountant went through this with me when I set up the business and I keep a few of these things tacked on my board by my computer. Helps to remind me how to do these transactions that I don't do every day.
So thats where to look. Thanks for the reply.
I pay everything by check too but I dont use quick books. I've devised a speadsheet that works well for me. Each job gets its own envelope that is numbered to match its sheet in the computer.
Then I have a master sheet with totals from all my jobs.
I can put my hands on any receipt i've entered in the last four years with in a couple of minutes.
One thing I forgot. In order to get the receipts home I carry one of those leather binders with a zipper on it so nothing escapes.
Used to work with a guy that kept receipts in his pocket till the magical Home Depot ink started to disappear.
Edited 1/2/2008 9:33 pm ET by MSA1
Used to work with a guy that kept receipts in his pocket till the magical Home Depot ink started to disappear.
I bought a Fujitsu ScanSnap scanner, which I use to scan everything into Acrobat format. The IRS likes you to keep those receipts for seven years, after all. And facsimiles are OK. Personally, I think that I'm lucky if the Home Despot receipt last long enough to return the extra part I bought just in case.
Organization does have its perks. I had a guy tell me about his audit experience.
He went to the IRS with all of his records on a four wheel cart. The agent saw what he brought and told him to go home.
guess it's that time of the year again ... huh?
this year ... I start by picking them up off the floor under the computer desk.
had a box ... no particular order ... high on a shelf.
for some reason ... had something to do with the XMas decorations ...
said box found it's way to said floor.
add one semi-agressive 1 year old girl ...
and ...
sometime tomorrow I'll be picking up said reciepts off the floor.
luckily ... only about a months worth.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Accordian folders, they come in all diff. sizes
It takes studs to build a house
I use a zippered bag that I keep in the truck. I leave the reciepts in the bag for a while, so if I have any returns I have the reciept right there.
I use two trucks, (big and small) so I have one in each truck. When the bag starts filling up I put the reciepts in a folder in a file cabinet.
I rarely use checks or cash for purchases. I use four different credit cards.
One for tools, one for lumber/ materials, one for gas/truck expenses and one for personal use. I keep the monthly statements in a file cabinet and at the end of the year I can total them up pretty quick.
I also keep track of any interest paid on each statement, because that is deductible.
I keep all of my receipts in one of two folders/envelopes.
#1 - Receipts to be filed/recorded - waiting until I can input them
#2 - Receipts for 2007 (or 2008, etc) - after I have input them
I use excel for my book keeping, a new file for each year of business. I split the excel spreadsheet into two different tabs (like two different pages you can flip between).
One page has income, where I keep track of the job start date, original estimate, dates/amounts of payment, when the final payment was made, etc.
The second page (second tab, really) has all of my expenses. I make a bunch of vertical columns (tools, materials, office supplies, fee & rentals, etc, etc). On the horizontal axis I enter the date, payee, the corresponding job ( if applicable), and then locate the expense under the correct vertical heading based on it's type...
7/12/2007 || Home Depot - Jones || $56.32
Each vertical column is set up with a formula which creates subtotals within in each category, and then totals each subcategory to make a total expenses for the year. and I can go back into each folder and find the appropriate receipt based on the date and the payee if I'm ever audited. It won't be fun, but it will get the job done.
...I have been wondering if those electronic receipt scanners might be worth while to handle all of the piddly receipts though. I think it scans it right into the computer for storage and you can then just toss the receipt.
Justin Fink - FHB Editorial
"Everybody wants to know what I’m on...
What I'm on? I’m on my bike, busting my ### 6 hours a day…
...What are you on?"
- Lance Armstrong
I married a CPA......lucky me!.
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The best bookkeeping tip I ever got was to have a file folder for each line item on my tax return. For example Job Material, Utilities, etc each have a folder. The end result is that the receipt for each tax item is in it's folder. Each year gets tied together and put in a box. Finding rcpts for an audit would be easy.
My quickbooks is set up with the same catagories.
I have a three ring binder with a pocket for each job. The receipts get put in there until they are billed. Then, they go into the filing cabinet.
Calvin's way of entering info daily would be the best. He knows the costs on each project, how much he owes on material and doesn't have to try and remember a month later what some arcane code # on a rcpt was for.
I just don't have the discipline to do it.
I didn't have the heart to tell him the ammended version.
Clip board on the seat-all rcpts go there or in checkbook when paid on the road. Bring in clip board and enter all per job, each job has a folder.
Monthly bills paid by check in office, invoice noted with date of pmt, check number and amount. They go to the file pile on top of the file cabinet. Same with copies of clients invoices when they are paid.
File the above as "needed".
But yes, daily like my job log is really the ticket.
edit: I used to keep all job expense rcpts in each years tax return copy package. For the past several years I keep each major monthly (or yearly) paid invoice original in a folder according to supplier. All other misc. rcpts go in a misc rcpt envelope and filed with tax return copy. Keeps the major purchase rcpts (and possible warranty proof) where I can get ahold of them easily according to job date.
A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Edited 1/3/2008 7:30 pm ET by calvin
Journeyman-
As far as physically handling the receipts, I like to keep them in a yearly diary, right on/in the page for the date that they were issued. I do this for small receipts such as cash stuff. I have separate folders for anything that I pay by check, which is the bulk of the expense for the year. For convenience sake, I break that down too, into credit cards, utilities (I do rentals), and trade accounts.
Usually sometime during the year the diary starts getting fat and full of paper. That's a sign that the reciepts need to get entered into some kind of paper summary. Then they get filed in file folders by month, in date order.
Calvin's right. The best course of action is to keep on top of it. Let it build up for a while and it becomes more troublesome and less likely to get done, or done right. That creates more problems.
Don K.
EJG Homes Renovations - New Construction - Rentals
receipts ( large size ) get stamped in red... lines for job, account, etc
smaller receipts get taped to letter size piece of paper , then get stamped & categorized
petty cash has to be compiled and categorized, usually about once a quarter
every receipt has to be identified as to job and category
then we make two copies.. originals go in the vendor's file
with a copy to the job file, and a copy with the bookeeper
job files start as a colored file folder, the color is for the current year... this year it's purple,,, last year it ws red... year before that it was blue
every file folder has a label with the 4 digit job number ( year & sequential number ) eg: current job is 0717-OWNER's last name
big jobs graduate to a 3-ring binder
contract documents go in a permanent sleeve file in the filing cabinet
Thanks for all the tips guys. Very insightful.-T
I'm like everyone else here - constantly learning.
I use Quickbooks, and I buy almost everything using my credit card. Only exceptions, Subs.
My bank is greedy (all the Canadian ones are), so I get dinged every time I write or deposit a cheque. (check to Americans who can't learn Queens English LOL)
I put the receipts into the flap in my diary or into my wallet and bring everything out about once a week, and enter it.
Each invoice goes into an envelope. I start an envelope for every job, with notes on it for the job details.
Tools and capital equipment goes into it's own envelope and I check once a month. Every tool purchase over $250.00 which is the cut-off for capitalization or instant write-off gets noted separately for tax purposes.
Then I get out a shoe box .......
Quality repairs for your home.
AaronR Construction
Vancouver, Canada
Monthly envelopes with job name written on the receipt and a pocket daytimer. I keep a cheap plastic accordion folder in the truck for each job I start. Makes it easy to find all kinds of stuff receipts, plans, sub info, phone numbers, notes, product literature, change orders blah blah...
I use a daytimer to note what I'm doing that day. I have found it really valuable for estimating remodeling jobs I do.
My system is pretty similar to Calvin's. I also use quickbooks and try to enter every night. Usually ends up being three or four times a week. If you keep up with entering the receipts it only takes a few minutes each day. As far as my actual system.....
Each job has its own folder which I try to keep with me as long as the job is active. Once the job is complete I put it in the current year job file (e.g. 2007 Completed Jobs). The invoice for this job (any open invoice for that matter) I keep in an "Open Invoices" file on my desk. This is a quick way to remind my self of any outstanding payments due. Once I receive final payment the invoice goes into the job folder for quick reference if needed.
Each receipt I get I write the job name (John Doe - Basement Remodel) or expense account (gas, tools, consumables, office supplies, entertainment, postage, etc.) on it. If the receipt has more than one job or expense account on it I will do a split when I enter it in quickbooks and make a copy of the receipt for each appropriate file it needs to go into.
Once a receipt has been entered into quickbooks I mark it with a green highlighter so I know it has been entered.
Job cost receipts all stay in the job folder. Expense account receipts are filed, each in their own hanging folder (gas, tools, etc.) in my file cabinet.
Expenses like rent, credit card payments, utilities, loans, insurance, supplier accounts, etc. get paid by check. Most other things are paid for by credit card. These accounts get reconciled each month when I pay them. A pretty simple process with quickbooks.
Receipts for petty cash are entered as a journal entry in quickbooks and filed in the appropriate folder.
At the end of the year all hanging folders are emptied and moved to manilla folders for each account. All these folders are then bundled together (by year) and moved to the file cabinet in the basement. That way I can easily go back and find anything I need to.
Hope I didn't make it too confusing. This system is actually pretty simple for me. It is all what is easy for each person to do. If it is a pain in the butt it won't get done!
fred.. don't you run a vendor's file too ?
Mike Smith Rhode Island : Design / Build / Repair / Restore
Mike-
I am not sure exactly what you mean by "run a vendors file".
Any receipts from a vendor ( like suppliers) go into either a specific job file or into a file for the appropriate expense account.
When I get a monthly statement from a vendor I reconcile that account and pay by check. That statement is then filed under the vendors name. The receipts for those transactions are filed as I mention above, not in the specific vendors file.
Is that what you are getting at???
yes we're doing the same thing, maintaining a vendor's file, only we add annotated copies of the invoices to the file ...
sometimes i can remember where we bought something before i can remember which job we used it on.. so the vendor file becomes a double check ...
also.. there are times when it is very handy to have quick access to those invoices.. like warranmty issues, or mfr's rebates, etcMike Smith Rhode Island : Design / Build / Repair / Restore
Use a coupon binder mine is about 6" X !0" with a dozen slots accordian style they have tabs for names or job number. Keep it in the truck write on every receipt job name and put in the slot.
I use a spread sheet for accounting.
Calvin has it right, and if anyone can actually do that every night, great! I've been trying for years and was impressed recently by a guy that took it to the top.
I had a mobile mechanic come and fix a vehicle on a jobsite. He has a laptop with a printer and a scanner in his truck. He scanned in the receipts for the parts he purchased, the software marked them way up and added that to his labor rate and printed me a bill. His accounting was done before he started his truck.