OT: Accounting and Quick Books Pro Software

[Chris Elston 79]

Ok so this isn't really automation related but is there any accounting people here? I've got quick books pro, and I would like to show in quick books that I am investing money into the company. So I need to make it show that I put cash into the business. How do you make it do that in Quick Books? Normally cash is inserted as you invoice people and they pay their bills. But in this case, I want to put cash into the business myself, so there is no invoicing, however I should of course see the checking account of the business increase because I personally put cash into the business. I do have "stock" in the business but wasn't sure how to do this? Any accounting pointers? Which way is the best way without getting taxed for it, or uncle sam raising a red flag?

[TimWilborne 108]

Now I have an LLC but I believe that it is the same. What you are trying to do is make a capital investment in your company. Do a search in Quickbooks for "capital investment" and "recording capital investments" will come up. But basically you need to create another equity account, separate from you Owner Equity account. The go to Banking, then Make Deposits. Make the deposit against the "Capital Investment" or whatever you call the account. DO NOT make it against the Owners Equity account! This is for your initial investment in the company. I have already made that mistake and had to fix it. Is that what your looking for?

[TimWilborne 108]

Ok, had a chance to look into it a little more. It appears to be the same for a corporation as it is for a LLC, only the account should be called Capital Stock instead of Capital investment. See the last item in the help search from the previous post. Also, while I'm not a CPA, I can't see where this money is taxable anyway. This money will not show up on you Profit & Loss, it will just increase your cashflow and show up on your balance sheet. It is an investment. Only returms on your investments are taxable. You don't pay yourself a regular salary do you?

[geniusintraining 2]

I may have done it the wrong way but... I just opened the check register and used the drop down arrow then selected "Partner One Equity", not sure if thats the correct way (EDIT: I also use Simple Start not Pro) What you get paid??? I thought I was only to pump money in... at what point will it go the other way? Let me answer that, Chris has been doing this for years... and he is still "investing money into the company" sure we can call it that :) Edited 29 Sep 2007 by geniusintraining

[TimWilborne 108]

The reason I ask is that I have a friend who is obsessed with making sure his salary gets paid. He won't deviate from it and will loan his company money to pay his salary. If you need to invest your own funds into a company that pays you a salary then cut your pay and do a lower investment. In other words if you need to invest $15,000 over a month period and you would normally get a salary of $5,000 during this time, cut your pay off and invest $10,000. It is the same amount of money but when you invest it into the company and then pay yourself with the same money that was already yours, you have to pay taxes again.

[Chris Elston 79]

My CPA, the dude I pay $550 to each year to do my corporation taxes told me it looks better to the IRS, if I do take a wage, which I do. I however am different than your friend, in that if I want to make an investment in something, I generally take a lessor wage that month. And if I am doing well, I will take a higher wage that month. But bottom line I was told by my CPA to take a wage, then if there is alot in the business to take a distrubtion if I want. The IRS raises a red flag and audits companies that only take a distrubtion at the end of the year and no owner wages.

[TimWilborne 108]

Do you use the Inventory and Purchase Order modules? TW Controls sales is 90% in the service industry and I hate to bother with tracking inventory in Quickbooks for that 2%. However, I would like to use the purchase order module of Quickbooks?