Quicken® vs QuickBooks® for Farm Financial Records Damona Doye [email protected] Extension Economist and Regents Professor OSU Agricultural Economics Department

Lori Shipman Extension Assistant

Computer use for business purposes by region 50 45 40 35 30 25

2005 2007 2009

20 15 10 5 0 Northeast

North Central

South

West

US

Source: USDA/NASS, Farm Computer Usage and Ownership, August 2009

Computer use for business purposes by b f farm sales l class l 80 70 60 50 40 30 20 10 0

2005 2007 2009

Source: USDA/NASS, Farm Computer Usage and Ownership, August 2009

Off-farm work by principal operator 70 60 50 40 30 20 10 0 Under 25

25 to 34

35 to 44

45 to 54

55 to 64

65+

Principal occupation is farming Principal occupation other than farming http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_ 1_US/index.asp

Farm organization 0.4

1.3

3.9 7.9 Family or individual Partnership Family held corporation

86.5

Corporation, other than family held Other: co-op, estate or trust institutional, trust, institutional etc etc.

Source:http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_ Chapter_1_US/index.asp

Recordkeeping suggestions… Start simple

Be consistent

Be disciplined

Get assistance

Be enthused!

Everyone should use Quicken.*  Some should also use QuickBooks* QuickBooks .

* Or a similar product. No endorsement of a specific commercial product is intended or implied.

Quicken features… and QuickBooks?  Inexpensive  Flexible  Easy to use  Able to “grow” with the business  Allows for both farm and familyy records g  Cash accounting

 Not expensive  Less forgiving and less easy to use  Able to “grow” with the business  Allows for more sophisticated business use  Double-entry

Quicken

QuickBooks

 Cash accounting  Personal finance

 Accrual accounting  Small business finance

 Family living expenses  Off-farm income  Investment income and expenses

Use

 Invoicing  Accounts payable/receivable  Payroll

Quicken  File  Accounts  Categories  Tags y  Payee  Paid by

QuickBooks  Company  Chart of accounts: asset,, liability, y, equity q y  Chart of accounts: income/expense p  Classes e do  Vendor  Customer

Terminology

QuickBooks Organization Choice (examples of impact on accounts/tax line) Account name

Multi-member LLC, Partnership or LLP

Accum. depr.

B/S-Assets: buildings/other

B/S-Assets: buildings/other

Unassigned

Capital stock

n/a

Unassigned

n/a

Payroll Iiabilities

B/S Liabs/Equity: B/S-Liabs/Equity: other current liab.

B/S Liabs/Equity: B/S-Liabs/Equity: other current liab.

Unassigned

Dividends paid

Unassigned

Unassigned

n/a

Draws

Member/partner

n/a

Income: Gross Crop sales receipts

Regular or C Corp S Corp Corp,

Income: Gross receipts

Sole Proprietor, Single Member LLC

Sched. F: Sales of Sched livestock/products raised

Quicken

QuickBooks

 Enter transactions in register  Write checks: personal  Enter payment  Enter deposit  Passwords: file, transactions

 Enter transactions in forms (e.g. invoice)  Write checks: business with voucher  Enter bill, pay bill, assign check #  Estimates, invoices, & payments or receipts  Multi-level passwords

Data Entry

Quicken  All manual  Create categories, accounts  Calculate

QuickBooks  Payroll subscription service  Employee p y records  Manual can be enabled

Payroll

QuickBooks Payroll Products  Online Payroll Software  Basic: $25 per month+ (no state tax forms)  Plus: $39 per month+

 QuickBooks Payroll Software  Up to 3 employees, $129 billed annually  Unlimited employees, $229 billed annually

 Intuit I i Enhanced E h dP Payrollll  Up to 3 employees, $199.20 billed annually  Unlimited U li it d employees, l $279 $279.20 20 bill billed d annually ll

 QuickBooks Assisted Payroll Service  $60/month+ $60/ th

Quicken

QuickBooks

 Memorized transactions  Financial calculators

 Lists  Items  Vendors  Customers  Employees

Other

Quicken

QuickBooks

 Banking  Comparison C i  Spending  Tax  Easy Answers  Graphs  Also, customized folders for reports

 Company & Financial  Customers C stomers & Receivables  Sales  Jobs, Time & Mileage  Vendors V d &P Payables bl  Employees & Payroll  Banking B ki  Accountant & Taxes  Budgets

Reports

Quicken

QuickBooks

 Videos  Forums, blogs  Quicken Inner Circle

 Online assistance  QuickBooks coach  Videos  Live Community

Facebook Twitter Youtube Linked in

Assistance

Cool things in both Quicken and QuickBooks  Date: Y, R, M, H, T  Find/replace  Attach  Download transactions  Import/export  Graphs  Backup

Possible motivations for keeping farm records  Keep what is needed for tax purposes  Be prepared for the unexpected  Planning g ahead  Communications  Employee p y management g  Business analysis  Be able to accurately identify shares of income and expenses  Determine cost of production per unit  Know where profit (and/or loss) centers are in the operation

Records for farm tax purposes Quicken

Farm income and expenses

QuickBooks

Advantage

1099

Advantage

Employee payroll

Advantage

Asset sales and purchases

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“It is easier to do a job right than to explain why you didn’t.” … Martin van Buren

?

Records for being prepared

Knowing cash reserves, cash flow, margins

Quicken

QuickBooks

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Employee records List of accounts, credit card numbers A Assets t and d inventories i t i

Advantage =

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Records for planning ahead Quicken

Budget features

Advantage

Budget to actual comparisons

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Financial calculators Retirement planning Investment analysis Estate planning

QuickBooks

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Ad antage Advantage Advantage Advantage ?

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Records for communications Quicken

Business p partners Family

QuickBooks Advantage g

Advantage

Lenders

=

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Landlords

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Heirs

Records for employees Quicken

QuickBooks

M Manual lP Payrollll

Advantage

Payroll y taxes

Advantage g

Employee payroll

Advantage

Records for business analysis Quicken

Enterprise analysis Tracking costs, returns for multiple years

QuickBooks

Advantage =

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Analysis by customer

Advantage

Analysis by item

Advantage

Financial statements

Advantage

Quicken workshops  3 hours Set up file Add accounts Add/edit categories, import farm categories Create classes Enter transactions View sample p reports, p ,g graphs p Backup

www.agecon.okstate.edu/quicken

QuickBooks workshops p (expected)  Dayy 1

 Company setup  Chart of Accounts  Lists  Vendors  Customers  Items

 Enabling classes  Other bank accounts  Paying bills  Recording R di iincome

 Dayy 2

 Liability accounts  Asset accounts  Reports  Budget features  Introduction I t d ti to t payrollll

Our plans for QuickBooks  1 day in-service in service for Extension Educators Educators, April 13  Basic instructions online in departmental publication database  Pilot workshop(s)  Workshops at national flower growers conference in Tulsa Tulsa, November

QuickBooks Resources for Ag Online  Flagship Technologies http://www.goflagship.com/products/cbkhome.htm

Everyone should use Quicken.*  Some should also use QuickBooks* QuickBooks .

* Or a similar product. No endorsement of a specific commercial product is intended or mplied.

Questions? Damona Doye [email protected] 405 744 9813 405-744-9813