Does anyone have suggestions for setting up Quickbooks to track income / expenses for an existing business that is currently using pen & paper along with the Wave app for reoccurring invoices that we mark as paid and how they were paid. Would like to be able to break down each client / horse as a “job.” Is it easiest to start fresh with this year and create journal entries for previous years? I have accounting & quickbooks experience but not setting it up nor using it in the equine business. We need to figure out income vs expenses as we are trying to buy another farm not to mention get organized. Honestly we weren’t really expecting the business to grow like it has, this was only supposed to be a hobby. Any advice is much appreciated!! Thank you
I’m not sure that setting up each client/horse as a job is needed. Job costing is useful if you can compare revenue and the matching expenses, but isolating expenses for each horse would be a huge PITA I would think. Imagine splitting up grain, shavings, or barn labor expenses up by client/horse. And even if you did, would it be meaningful?
As to prior years, yes, I would probably just do journal entries so that you could do comparative financial statements. Ideally, you would want a journal entry for each month but if you currently only have annual numbers available, just go with that. If your business is experiencing crazy growth, entering detail back to Jan 1st of 2022 will be hard enough without going back and entering detail for prior years unless the volume of transactions is low enough.
Thank you! I do understand what you’re saying about the breakdown by horse. Especially since those bills do vary month to month. I guess I am trying to see if there is a way to track lesson horses income vs expense since no one is paying board for them. The plan is to start with this month, I would like to at least get things going this week… Just a little overwhelming when starting from scratch & as of now I’ve definitely been slacking with bookkeeping in general
Unless your lesson horses are field boarded, the monthly cost of a lesson horse is roughly the same as a boarded horse. Since the number of boarded horses and lessons horses could change by month, I think I would be tempted to just do an Excel spreadsheet to see profitability of your different income streams. You would definitely code lesson income separately from board income in QB. In an Excel spreadsheet, you could manually do job costing by keeping track of the number of lesson horses vs boarded horses and multiplying those numbers by a fixed estimate of the monthly cost of keeping a horse. Maybe keep this up for a few months and see if you’d prefer to have actually costs broken down by horse in QB?
Alternatively, you could do a journal entry to assign costs by horse in QB rather than in an Excel spreadsheet. That way, you could actually generate reports from QB.
I’m much more familiar with QB than Excel but I could definitely learn. It may be easier to use something less permanent at first since I’m having a difficult time finalizing a chart of accounts - it seems like every day I remember another expense & a barn is so different than any business I have worked for.
You should definitely learn Excel!! I can’t imagine trying to do any accounting without Excel. And once you have data in QB, you can also download any data or report you want into Excel so that you can manipulate the data further for reporting or analysis purposes.
something you might want to read is the IRS Farmer’s Tax Guide
If you put the data in Excel you can sort it, filter it and run all sorts of pivot tables. Easy to do once you set it up.
I have used QB while managing a couple farms with a mix of boarders and lesson horses. I have expense accounts that I know are “lesson horse only” accounts (vet, farrier, supplements) and expense accounts that are “all horses” accounts (bedding, hay, feed). To get a rough hard-cost-per-horse, I divide the totals by the correct number of horses. Vet/total lesson horses. Bedding/total horses in stalls. And so on.
I have to say, I run several businesses that the books are kept in quickbooks, it is great. that said, I have started using quicken to manage my own farm, it is way simpler, it connects directly to your bank account for most banks and as a whole is much less complicated, it allows me to allocate all my expenses to categories as well as income and gives me the amount of insight I need vs a lot less work that keeping an actual reconciled chart of accounts. IF I had a book keeper I would use quickbooks, quicken is good enough for what I need to do.
I guess I am about to show my age once again, but one can easily track the expenses for the school horses in a ledger. Really does not take a software program and it is easy today to control bank accounts from whatever electronic devise you favor. I do have a minor in accounting and a MBA but as I was with older daughter yesterday helping her prepare the neighbor’s barn for coming blizzard for their goats… she had electric staple gun in one hand cell phone in the other while she attempted to text a message and staple plastic to the wall at the same time.
I pretty much know just what each of our animals cost to keep, even that white cat…but I do not do multiple tasks at the same time. (but I could if really needed, I once was a combat air traffic controller who could keep 30 or 40 aircraft separated in 11 approach/departure patterns at the same time answer the phone)
I finally had to stop daughter, make her give me staple gun and hung the plastic
Using Quick Books would allow one to easily transfer the task to another person or allow you to review the data that some one else enters… but once again a ledger could be handled the same way… even Scrooge had Bob Cratchit do his ledger entries
Clanter you sound like my first accounting boss. We were SO unproductive - he hated computers and had us do everything on green ledger paper and then the admins typed the results into a computer using it like a word processor. So slow, inflexible and too much manpower for the limited output. This was many decades ago and I am sure he was put out of business by the more computer savvy.
I am telling you - learn basic Excel and enter the data in a spreadsheet with labeled columns. You can easily do pivot tables that will combine the data in any way that you want it. I am not a computer whiz but I used pivot tables so much in my job. There are plenty of basic Excel and Pivot table classes available. I could learn most of what I needed to know in one 8 hour class for CPE. Hey - maybe this is what I need to do part time to supplement my retirement benefits - set up small businesses with basic excel and pivot tables for those that don’t want to be a whiz but just get the job done. Since I am not a high powered whiz and need basic steps to learn I can probably relate to ( and teach) those sorts of users. I hate taking a computer class and the instructor ASSumes you are more knowledgeable than you really are.
oh I know how to use Excel, I was a regional sales manager (responsible for 13 states) . I was on 100% commission sales having seven different levels of commission with the various clients. My region constantly did over $6M in Gross Sales. Excel was the way to maintain tracking of when and if I was paid for a specific order.
But honestly tracking the cost of a specific horse is not much of big deal, it could be kept in a note pad
please dont use excel, it sounds like a great idea now, But I have taken over several accounting projects that have been kept in excel for years, often by a string of different people. it seems simple, until one day you wake up and no one understands it.
