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Subject Author Date @ small business accounting in Quickbooks lo 12-20-2007  Re: @ small business accounting in Quickbooks Allan Martin 12-20-2007  Re: @ small business accounting in Quickbooks Laura 12-20-2007  Re: @ small business accounting in Quickbooks lo 12-21-2007
Posted by lo on December 20, 2007, 11:54 am Please log in for more thread options On October of this year, a friend of mine and I accepted to run a small advertisement magazine that publishes every 4 weeks (13 times per year). The type of service we provide doesn't require us to collect sales tax. We have around 7 vendors to pay, and about 40 clients, most of them are repeat clients. (No employees) We pay the owner of the magazine a set price per page. We created an S Corporation, two shareholders total and we both own an equal number of shares. We were told that QUICKBOOKS was the best choice for us to organize our business, create invoices, etc. We got QUICKBOOKS PREMIER EDITION and entered the company information in the program. Our cycle is as follows: every 4th week we accept the ads from our clients, present them with a graphic proof of the ads, do corrections and bill them at the same time. We get their payment before everything goes for printing. About 13 days later, the magazine is out for distribution. During these 13 days, we pay all the vendors involved. We have few questions about the subject: 1-) To distribute the income between us, every 4 weeks we withdraw some money. On the chart of accounts, we created one account called Owner's Draws (type: Equity) that we use for this purpose. Is this the correct way to collect the "profit"? We always make sure that we leave in every draw, enough money in the bank account that what we begin with to make sure we can cover ourselves in case of unexpected expenses. At the end of the year, will that additional money be shown as profit as well? 2-) We incurred in expenses to open and run the corporation, here are some example of expenses: Fees for in Corporation Professional fees for help forming the corporation. P.O.Box rental. Basic office supplies. Order of checks and stamp. Telephone line. Software, etc. Can we get reimbursement for these expenses from the corporation, and if yes, show those specific expenses but the check made to us personally? Under what accounts that would be classified? 3-)As far as I understand, from the second year on of existence of the corporation, either my partner or I have to be an employee of the corporation, is this correct? Do we need an employee? 4-)Of the initial money we use to open the bank account, now that there is additional monies in the account, can we withdraw the initial money back to us and if yes under what account would that be classified? 5-) In an accounting book that we bought, it says that from the very beginning we have to decide if we are going to run the business in an accrual or cash basis, but searching Quick Books, it seems that you can do either, it is just matter of setting the reports one way or another, is that correct? 6-) We use 3 people to distribute the books, we pay them as independents under a distribution account (Type: expense) but my partner and I do few distribution stops as well (only about $150 each, every 4 weeks) how do we pay ourselves for that activity? 7-) We pay to the owner of the magazine every 4 weeks, a set price per page, I created an account for it called "Page rent, John Smith" (Type: Expense) Is this correct? Thank you in advance for your replies. Lo Posted by Allan Martin on December 20, 2007, 12:37 pm Please log in for more thread options This newsgroup is not a substitute for getting an accountant. The first thing he/she will tell you is that Sub S stockholders do not take draws. You should issue regular payroll checks and file payroll returns. That's all the advice you will get from me, your post has way too many questions. > On October of this year, a friend of mine and I accepted to run a small > advertisement magazine that publishes every 4 weeks (13 times per year). > The > type of service we provide doesn't require us to collect sales tax. We > have > around 7 vendors to pay, and about 40 clients, most of them are repeat > clients. (No employees) We pay the owner of the magazine a set price per > page. > > We created an S Corporation, two shareholders total and we both own an > equal > number of shares. We were told that QUICKBOOKS was the best choice for us > to > organize our business, create invoices, etc. We got QUICKBOOKS PREMIER > EDITION and entered the company information in the program. > > Our cycle is as follows: every 4th week we accept the ads from our > clients, > present them with a graphic proof of the ads, do corrections and bill them > at the same time. We get their payment before everything goes for > printing. > About 13 days later, the magazine is out for distribution. During these 13 > days, we pay all the vendors involved. > > We have few questions about the subject: > > 1-) To distribute the income between us, every 4 weeks we withdraw some > money. On the chart of accounts, we created one account called Owner's > Draws > (type: Equity) that we use for this purpose. Is this the correct way to > collect the "profit"? We always make sure that we leave in every draw, > enough money in the bank account that what we begin with to make sure we > can > cover ourselves in case of unexpected expenses. At the end of > the year, will that additional money be shown as profit as well? > > 2-) We incurred in expenses to open and run the corporation, here are some > example of expenses: > Fees for in Corporation > Professional fees for help forming the corporation. > P.O.Box rental. > Basic office supplies. > Order of checks and stamp. > Telephone line. > Software, etc. > Can we get reimbursement for these expenses from the corporation, and if > yes, show those specific expenses but the check made to us personally? > Under > what accounts that would be classified? > > > 3-)As far as I understand, from the second year on of existence of the > corporation, either my partner or I have to be an employee of the > corporation, is this correct? Do we need an employee? > > 4-)Of the initial money we use to open the bank account, now that there is > additional monies in the account, can we withdraw the initial money back > to > us and if yes under what account would that be classified? > > 5-) In an accounting book that we bought, it says that from the very > beginning we have to decide if we are going to run the business in an > accrual or cash basis, but searching Quick Books, it seems that you can do > either, it is just matter of setting the reports one way or another, is > that > correct? > > 6-) We use 3 people to distribute the books, we pay them as independents > under a distribution account (Type: expense) but my partner and I do few > distribution stops as well (only about $150 each, every 4 weeks) how do we > pay ourselves for that activity? > > 7-) We pay to the owner of the magazine every 4 weeks, a set price per > page, > I created an account for it called "Page rent, John Smith" (Type: > Expense) > Is this correct? > > Thank you in advance for your replies. > > Lo > > Posted by Laura on December 20, 2007, 12:45 pm Please log in for more thread options I agree. All of those questions would be best answered by an accountant.. Best to get the company file and processes setup by an accountant in the very beginning rather than discovering tons of errors at tax time. Then come back with specific Quickbook questions. > This newsgroup is not a substitute for getting an accountant. The first > thing he/she will tell you is that Sub S stockholders do not take draws. > You should issue regular payroll checks and file payroll returns. That's > all the advice you will get from me, your post has way too many questions. > > > > >> On October of this year, a friend of mine and I accepted to run a small >> advertisement magazine that publishes every 4 weeks (13 times per year). >> The >> type of service we provide doesn't require us to collect sales tax. We >> have >> around 7 vendors to pay, and about 40 clients, most of them are repeat >> clients. (No employees) We pay the owner of the magazine a set price per >> page. >> >> We created an S Corporation, two shareholders total and we both own an >> equal >> number of shares. We were told that QUICKBOOKS was the best choice for us >> to >> organize our business, create invoices, etc. We got QUICKBOOKS PREMIER >> EDITION and entered the company information in the program. >> >> Our cycle is as follows: every 4th week we accept the ads from our >> clients, >> present them with a graphic proof of the ads, do corrections and bill >> them >> at the same time. We get their payment before everything goes for >> printing. >> About 13 days later, the magazine is out for distribution. During these >> 13 >> days, we pay all the vendors involved. >> >> We have few questions about the subject: >> >> 1-) To distribute the income between us, every 4 weeks we withdraw some >> money. On the chart of accounts, we created one account called Owner's >> Draws >> (type: Equity) that we use for this purpose. Is this the correct way to >> collect the "profit"? We always make sure that we leave in every draw, >> enough money in the bank account that what we begin with to make sure we >> can >> cover ourselves in case of unexpected expenses. At the end of >> the year, will that additional money be shown as profit as well? >> >> 2-) We incurred in expenses to open and run the corporation, here are >> some >> example of expenses: >> Fees for in Corporation >> Professional fees for help forming the corporation. >> P.O.Box rental. >> Basic office supplies. >> Order of checks and stamp. >> Telephone line. >> Software, etc. >> Can we get reimbursement for these expenses from the corporation, and if >> yes, show those specific expenses but the check made to us personally? >> Under >> what accounts that would be classified? >> >> >> 3-)As far as I understand, from the second year on of existence of the >> corporation, either my partner or I have to be an employee of the >> corporation, is this correct? Do we need an employee? >> >> 4-)Of the initial money we use to open the bank account, now that there >> is >> additional monies in the account, can we withdraw the initial money back >> to >> us and if yes under what account would that be classified? >> >> 5-) In an accounting book that we bought, it says that from the very >> beginning we have to decide if we are going to run the business in an >> accrual or cash basis, but searching Quick Books, it seems that you can >> do >> either, it is just matter of setting the reports one way or another, is >> that >> correct? >> >> 6-) We use 3 people to distribute the books, we pay them as independents >> under a distribution account (Type: expense) but my partner and I do few >> distribution stops as well (only about $150 each, every 4 weeks) how do >> we >> pay ourselves for that activity? >> >> 7-) We pay to the owner of the magazine every 4 weeks, a set price per >> page, >> I created an account for it called "Page rent, John Smith" (Type: >> Expense) >> Is this correct? >> >> Thank you in advance for your replies. >> >> Lo >> >> > Posted by lo on December 21, 2007, 3:04 pm Please log in for more thread options Friday, December 21, 2007 Hello there: Thank you for your help, and you are correct, a newsgroup wouldn't necessarily be a substitute for getting an accountant. I have very little knowledge about accounting, taxes, etc. but at the last minute I had the opportunity to get into this business and I am trying to ask questions and read as much as possible about the subject to prepare myself before I go to an accountant which should be in about 2 weeks from now. Happy Holidays and thank you again, Lo. =========================== ============== > I agree. All of those questions would be best answered by an accountant.. > Best to get the company file and processes setup by an accountant in the > very beginning rather than discovering tons of errors at tax time. > > Then come back with specific Quickbook questions. > > > This newsgroup is not a substitute for getting an accountant. The first > > thing he/she will tell you is that Sub S stockholders do not take draws. > > You should issue regular payroll checks and file payroll returns. That's > > all the advice you will get from me, your post has way too many questions. > > > > > > > > > >> On October of this year, a friend of mine and I accepted to run a small > >> advertisement magazine that publishes every 4 weeks (13 times per year). > >> The > >> type of service we provide doesn't require us to collect sales tax. We > >> have > >> around 7 vendors to pay, and about 40 clients, most of them are repeat > >> clients. (No employees) We pay the owner of the magazine a set price per > >> page. > >> > >> We created an S Corporation, two shareholders total and we both own an > >> equal > >> number of shares. We were told that QUICKBOOKS was the best choice for us > >> to > >> organize our business, create invoices, etc. We got QUICKBOOKS PREMIER > >> EDITION and entered the company information in the program. > >> > >> Our cycle is as follows: every 4th week we accept the ads from our > >> clients, > >> present them with a graphic proof of the ads, do corrections and bill > >> them > >> at the same time. We get their payment before everything goes for > >> printing. > >> About 13 days later, the magazine is out for distribution. During these > >> 13 > >> days, we pay all the vendors involved. > >> > >> We have few questions about the subject: > >> > >> 1-) To distribute the income between us, every 4 weeks we withdraw some > >> money. On the chart of accounts, we created one account called Owner's > >> Draws > >> (type: Equity) that we use for this purpose. Is this the correct way to > >> collect the "profit"? We always make sure that we leave in every draw, > >> enough money in the bank account that what we begin with to make sure we > >> can > >> cover ourselves in case of unexpected expenses. At the end of > >> the year, will that additional money be shown as profit as well? > >> > >> 2-) We incurred in expenses to open and run the corporation, here are > >> some > >> example of expenses: > >> Fees for in Corporation > >> Professional fees for help forming the corporation. > >> P.O.Box rental. > >> Basic office supplies. > >> Order of checks and stamp. > >> Telephone line. > >> Software, etc. > >> Can we get reimbursement for these expenses from the corporation, and if > >> yes, show those specific expenses but the check made to us personally? > >> Under > >> what accounts that would be classified? > >> > >> > >> 3-)As far as I understand, from the second year on of existence of the > >> corporation, either my partner or I have to be an employee of the > >> corporation, is this correct? Do we need an employee? > >> > >> 4-)Of the initial money we use to open the bank account, now that there > >> is > >> additional monies in the account, can we withdraw the initial money back > >> to > >> us and if yes under what account would that be classified? > >> > >> 5-) In an accounting book that we bought, it says that from the very > >> beginning we have to decide if we are going to run the business in an > >> accrual or cash basis, but searching Quick Books, it seems that you can > >> do > >> either, it is just matter of setting the reports one way or another, is > >> that > >> correct? > >> > >> 6-) We use 3 people to distribute the books, we pay them as independents > >> under a distribution account (Type: expense) but my partner and I do few > >> distribution stops as well (only about $150 each, every 4 weeks) how do > >> we > >> pay ourselves for that activity? > >> > >> 7-) We pay to the owner of the magazine every 4 weeks, a set price per > >> page, > >> I created an account for it called "Page rent, John Smith" (Type: > >> Expense) > >> Is this correct? > >> > >> Thank you in advance for your replies. > >> > >> Lo > >> > >> > > > Similar Threads Posted Before You Buy Accounting Software for Your Small Business July 13, 2006, 3:15 pm Does QuickBooks Premier 2007 work on Windows Small Business Server? 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