I run 2 home based business and am looking for PC accounting software
that can help organize both my businesses and personal finances. The
first is a retail internet store and the second is computer repair and
web development services. These are both considered sole
proprietorships operating under 1 social security number.

Particularly there are many costs that are not either personal or
business, but both. Utilities for instance- I need the software to be
able to attribute these costs to both personal and business use. I
also need to be able to input W2 income from my spouse. The goal is to
have all income and expenses accurately defined so that when tax time
comes I will just have to pull some reports from the software.

I also need to be able to input customer invoices, but don't need
payroll capablities. I'm sure there are other considerations, and if I
have missed any important ones, please just ask for clarification. I
would like a well known piece of software so it will be easy to find
information should I have questions.

If you have particular expertise on accomplishing what I would like to
do, I would also like to get help setting things up. Thanks!

Dear I-Nerd. 

I get the impression that you don't have separate bank accounts
for each business? You're running them all out of your personal
account?

First of all, I'd really, really, really like to urge you to open a
separate account for each business. If you shop around a bit, you'll
find a bank that will be very happy to take your business - and give
you free checking. 

Then, I would suggest that you get QuickBooks Pro. 
It will let you set up as many distinct companies as you like
within the same software, at no additional charge. 

So, you'll be able to set up three 'companies'. Two of them will
be your businesses, and one of them will be your personal accounts. 

When you do that, built into QuickBooks are charts of accounts for
many different kinds of businesses. You'll find one for RETAIL,
and another one for CONSULTING or REPAIR businesses. 

And I have no doubt there is one for personal, as well. 

See if you can get your tax professional to set up the companies
for you, so they are done right the first time. It will save you
so much time in the long run. 

Once you have all these QuickBook accounts/businesses set up, 
do this with your expenses that are common to all the businesses:

Write a check from each business's bank account to pay their share
of the common expenses. For instance, 

utilities - send in three  checks to the utility company. 
credit cards - send in three  checks to the credit card company 
   OR use a separate credit card for each business. 

And so forth. I am able to do this, running three businesses or so
out of my own home. 

You'll give your tax professional a disk with the QuickBooks files
on it. Just about all tax pros can read those files. 

If you need anything cleared up - please ask me. 

Best wishes with your new businesses - it sounds like you're
starting out right. 

Your TaxMama-ga

P.S. You would really benefit from reading Jan Zobel's book
Minding Her Own Business: 
The Self-Employed Woman's Guide to Taxes and Recordkeeping
http://www.amazon.com/exec/obidos/tg/detail/-/1580622003/
(It's good info - even if you're a man.)

---

Request for Answer Clarification by internetnerd-ga on 05 Dec 2004 20:29 PST

Hello, I saw this answer back in August, but was disappointed enough
not to ask for clarification then. Hopefully I'll get some more
answers now.

I had all ready tried Quickbooks Pro 2003 prior to asking this
question, and it did not suit my needs. I am not looking to set up 3
*autonomous* companies within a program (as QB requires I must) that
forces me to enter a check 3 times in order to attribute it to my 3
companies. It is not efficient to do the same task 3 times, which is
why I specified wanting software that can attribute a single cost to 3
businesses on it's own. QBPro 2003 also, unfortunately does not have a
"personal" business choice, as you hypothesized that it would.

Taxes and finances are NOT areas I am particularly skilled in, so
although I was disappointed when I couldn't find an ideal piece of
accounting software myself, I wasn't overly surprised. If no
accounting software exists that is smart enough to really cater to the
home business owner (as I have described) then I will be surprised. If
you are not aware of a program that does what I desire, please just
say so. I appreciate that your set up is acceptable to you, but it's
not I am looking for.

---

Clarification of Answer by taxmama-ga on 16 Dec 2004 05:58 PST

Dear internetnerd,

When you're not happy with an answer, THAT is the time to ask for clarification. 

The problem you are describing is not a limitation of QuickBooks. 

It is a limitation of the fundamental rules of accounting. 

You do not use ONE check to pay for bills for three businesses and 
expect any accounting program to spread those costs across three businesses. 

You WILL have to make a separate entry into each business. 
And I also recommend that you make copies of that check and that invoice
or bill for each business's paid bill file. 

When and if you get audited, each business stands alone. 
IRS will want to see that you did not deduct the expense three times, 
once in each business. They will want to see proof that you only deducted
the appropriate portion of the invoice in each business. 

And, yes, QuickBooks, or Peachtree, or One-Write, or whatever, WILL let
you set up several separate files, one for each business. You may have
dozens of such files. One of those files may be used to track your 
personal expenses. 

I think, internetnerd, that some of your discomfort relatest to terminology. 

I do recommend that you drop in at your local city college and take a 
course in bookkeeping. They often have weekend workshops that run one
or two Saturdays, or a few evenings, to help small business-owners
set up their businesses. They are often quite inexpensive - and well 
worth the trouble. 

Good luck with all your businesses - and may you have many deposits to enter. 

Best wishes

Your TaxMama-ga

P.S. This question expired many months ago.
To continue this discussion, please post a new question.

Have you considered Peachtree or Quickbooks?

Some times you can use Microsoft Money Deluxe, which includes a
business module. It might help to know what other modules are
important to you:

General Ledger, Accounts Payable, Accounts Receivable, Statements,
Inventory, Invoices, Point of sale, Sales tax collection, etc.

The personal finance products (Money Small Business
http://www.microsoft.com/money/business/, Quicken Premium Home and
business http://www.quicken.com/quickensw/hb/) are cheaper, but may
not necessarily give you fine control over certain areas of business.
BUT they're very good when combining personal and small business.
Also, you may not need the Peachtree's and Quickbook's full feature
set.

Money or Quicken work well with tax programs, like TaxCut
www.taxcut.com or TurboTax www.turbotax.com.

I use quickbooks BASIC.  It's the cheapest of the two version.  I'd
stay away from Quicken.  I use that for my personal stuff and don't
really care for it.  Quickbooks is accounting software. Quicken is to
keep your checkbook balanced.

Respectfully to the clarification, you didn't say in your question
that you tried QB2003, so the answer wasn't off the table.

Also, any accountant would probably grumble at trying to figure out
which of three companies a check went to, and, frankly, if all three
companies get the same check, then you only have one company with
different departments.

Respectfully to both the answerer and other commentors, QuickBooks
really isn't   accounting software, or not proper accounting software
anyway.  This is the result of its attempt to make everything a single
entry, rather than proper double-entry bookkeeping.  (And yes, I have
used QB to manage the finances of a business).  Thus I can see why it
might not have been satisfactory.

That said, Inerd-ga creates a nearly impossible situation if one check
is a payment to two companies.  If they are two companies, they should
be issuing two invoices and recieve seperate checks.

Anyway, Peachtree and Cougar Mountain (now owned by Microsoft and
possibly with a name change) are both full-featured but entry-level
accounting programs.  Inerd-ga would be well served to pay his
accountant to set up the general ledger structure initially, as it is
hard to recover from a bad schedule of accounts.  The two companies
would likely need very different schedules...the retail side needs
more in the way of inventory tracking, COGS, etc. while the web side
needs more labor costs, job costing, etc.  More robust packages, like
MAS-90, cost more and require more skill, but can do more stuff.

A site like <a href=http://www.findaccountingsoftware.com>this</a>,
though a little commercial, might help you find software that is more
specifically tailored to your needs if the general packages don't fit.

Hope this helps.