|Forum topic by Mark Smith||posted 435 days ago||1739 views||1 time favorited||27 replies|
435 days ago
Tax season is upon us and I’m trying to get my books all straight so I can get my big refund check. I started the business this year and I went to an accountant when I started out and spent about an hour with her getting advice on setting everything up and using Quickbooks. Now that I’m starting to try and get everything together for the end of the year I’m finding Quickbooks is a lot more complicated than I originally thought, and also a lot more complicated than I probably need for a small one man shop like I’m running.
Anybody else using Quickbooks? Is it working for you? Is there better software out there that isn’t as complicated for the very small business? In reading through the IRS instructions on Schedule C, I actually probably could have kept all my records on a spread sheet. It’s really not that complicated. The one thing I do like about Quickbooks is I can make an entry for an expense and then scan the receipt in and attach the image of the receipt directly to that expense. Then the original receipt gets filed away hopefully never to be needed again. As long as I don’t lose my digital image I should never need the original receipt again. I do backup my Quickbooks to Dropbox, but I’m saving the original receipts anyway.
The on thing I don’t like about Quickbooks is the way it figures expenses on the costs of goods sold. I actually messed up my entries this year and all the raw materials I purchased to make things I classified as Cost of Goods Sold. I’m now seeing that I should have classified them as Inventory and then when I made something and sold it from the items in inventory you put down the sales price and then Quickbooks deducts Cost of the Goods from that. The problem being, when you are working with raw materials if you want to track costs in this manner you have to be exact in your entries. For example if I buy 500 BF of wood for $500 I have to make sure than when I list it as inventory I break it down to indicate that the cost was $1 per board foot. And then when I make an item from that wood and sell it you have to list how many BF you used for each item in order for an accurate figure of cost of goods sold. So basically, that’s way too complicated and I’m not going to do it. I’ll just track that another way.
Anyway, I thought I’d make this thread to discuss tax issues related to the wood business. Since I just started the business this year and I spent a lot of money doing so, I have a nice huge loss this year that I get to write-off against other earned income. So it will make for a nice check back from the tax man.
-- Mark Smith, Tracy, CA., http://www.markscustomwoodcrafts.com