Slightly More Than Ten FAQs About Quicken 2013 - dummies

Slightly More Than Ten FAQs About Quicken 2013

By Stephen L. Nelson

Here are slightly more than ten of the most frequently asked questions (FAQs) about Quicken 2013. But what good is listing the questions without the answers, too?

What are Quicken’s best features?

As far as what’s best or most valuable, its checkbook feature is still clearly the most valuable. If you should use one feature in Quicken, it’s the checkbook stuff.

Intuit, the maker of Quicken, provides pretty neat stuff at its Quicken website.

The Quicken financial calculators are also really valuable. If you’re willing and able to do just a bit of planning right now, you’ll be truly amazed by the positive impact that planning has on your financial affairs a few years down the road.

What are Quicken’s least valuable features?

The answer really depends on the person. It depends on the way you’ve organized your finances.

The bottom line is that the least useful features depend on what you don’t need to do. But what you don’t need to do will probably differ from what the next person doesn’t need to do.

Does Quicken work for a corporation?

Sure. (Just for the record, this applies to regular corporations, to Subchapter S corporations, and to limited liability companies that have elected to be treated as regular corporations and as S corporations.)

In addition to recording assets (such as bank accounts and receivables) and liabilities (such as mortgages and trade payables), a corporation often needs to track stockholder equity. Accounting for stockholder equity of a corporation is mighty complicated at times. It’s so complicated, in fact, that Quicken can’t track a corporation’s stockholder equity.

Fortunately, the financial information you collect with Quicken provides, in rough form, much of the information that your poor accountant needs in order to do things manually.

What happens to stockholders’ equity in Quicken?

Quicken doesn’t exactly ignore a corporation’s stockholder equity. In an Account Balances report, the difference between the total assets and the total liabilities actually represents the total stockholder equity. (Quicken labels this total Net Worth.) So, to the extent that your total assets and total liabilities figures are correct, you know your total stockholder equity.

Does Quicken work for a partnership?

Yep, it does. But a partnership that uses Quicken faces the same basic problem as a corporation that uses Quicken. In a partnership, the partners want to track their partnership capital accounts (or at least they should). A partnership capital account simply shows what a partner has put into and taken out of a business.

Quicken calculates a net worth figure for you by subtracting total liabilities from total assets. So, to the extent that your total assets and total liabilities are accurately accounted for in Quicken, you know roughly the total partnership capital.

To solve this problem, you (or someone else) need to track what each partner puts into the business, earns as a partner in the business, and then takes out of the business. You can also just use the Quicken loan accounts for partnership equity accounts.

You just need to not get freaked out when your net worth shows as zero, and you need to remember that the partnership equity accounts aren’t really loans — they’re capital.

Can you use Quicken for more than one business?

Yeah, but be very careful. You must be especially diligent in keeping the two businesses’ financial records separate.

Quicken provides a handy tool for keeping them straight: You can work with more than one file. Each file, in effect, is like a separate set of financial records. You can’t record automatic transfers between accounts in different files; instead, you must record each side of the transaction separately. You can, however, keep truly separate business records.

What kinds of business shouldn’t use Quicken?

Quicken is a darn good product. Quicken works especially well for service businesses: consultants, contractors, personal service providers, and so forth. But it doesn’t work in every situation.

Can you use Quicken for real estate investing?

Absolutely. All you need to do is set up an income category to track your rental income and then some expense categories to track your rental expenses.

To see which rental expense categories you need, either look at the Schedule E tax form that went with last year’s tax return or grab a Schedule E tax form from the IRS.

The Schedule E tax form on which you report your real estate income and deductions requires you to segregate your income and deductions by property. If you have two rental properties, you’ll need to break down your income and expenses by property.

Can you use Quicken retroactively?

Yeah. And the idea is better than it may seem at first.

Entering one year’s worth of transactions doesn’t take long in Quicken (as long as you have decent records to work with).

After you enter all the information into a Quicken register, you can easily monitor your spending in various categories, track your income and outgo, and reconcile your bank accounts. It’s not the most efficient way to do things. And it’s not a very good way to manage business or personal financial affairs. But it works.

Can you do payroll with Quicken?

Yes. If you have only one or two salaried employees who always earn the same amount, you can rather easily use Quicken for payroll.

But if you have a bunch of employees or even a single hourly employee, you’ll probably want to either purchase a full-featured, real-live, small business accounting program (such as QuickBooks) or use a payroll service (such as Paychex or ADP) to take care of the whole thing for you.

Can you prepare invoices?

Not with Quicken Premier or Quicken Deluxe, but you can (very nicely, thank you) with Quicken Home & Business and with Quicken Rental Property Manager. If you want invoices, at least step up to Quicken Home & Business.

Can you import data from an old accounting system?

Yes, you can import data from your old accounting system. To do so, export the old system’s data into a file that matches the Quicken Interchange Format, or QIF, specification. (A QIF file just neatly organizes financial information in a well-documented structure so that other programs — and even people — can read and understand the data.)

Then import this file into an empty Quicken file. Keep in mind, however, that this process isn’t for the timid or fainthearted. If you’re really determined, look for a QIF conversion tool on the Internet.