Ask HN: Best Intro to Accounting/QuickBooks? | Hacker News Reader

Ask HN: Best Intro to Accounting/QuickBooks?

48 pointskogir15 comments

I'm bad and should feel bad and only do my corporate books once a year right before taxes. Each year I've completely forgotten everything about QuickBooks specifically and accounting in general, and have to rediscover everything.

Is there a quick, written overview somewhere of creating/classifying accounts, processing transactions from banks feeds, etc? Ideally it would also cover common things like what taxes we've paid (state, local, federal) I need to pull out and track separately from payroll and the like.

We only have about 100 entries a year right now, and mostly with the same few vendors. It feels silly to pay someone else to do this, though I'm willing to hear that I'm insane to be doing it myself.

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1. Wildly overpay someone now and save yourself some learning curve and errors. There is a reason we pay for tuition when we go to school.

2. Failing that, make your chart of accounts in Quickbooks be exactly equal to the tax return you are filing. If there is a line item on your tax return for "Rabbits" then make a "Rabbits" account in Quickbooks.

3. Only make accounts to match the expenses you have. Don't try to guess the future and pre-populate the chart of accounts.

4. Be willing to have 5% - 10% of your expenses fall into "Misc." It isn't worth being anal-retentive.

5. All of this advice is based on the assumption that you are tracking expenses for the purpose of preparing a tax return, not gratifying your inner MBA with all sorts of management-related financial reports.

> make your chart of accounts in Quickbooks be exactly equal to the tax return you are filing.

This seems obvious in retrospect but is actually super helpful. Since I'm trying to do the minimal work required to do taxes, it makes sense I should work backward from there.

2016 was all pre-revenue, and hopefully in 2017 it'll be worth taking option (1) :)

The "don't spend money before you have to" rule is in effect! Good work.

Seriously, you don't need to be really good with this tax return. Say you wildly miscategorize expenses. The net profit is the same, so the tax is unchanged.

And an auditor can swiftly go through 100 transactions to put them in the "right" buckets.

Greetings from TUS.

I feel pretty strongly that managerial accounting is a MUST have skill if you're running a business. Part-time book keeping is not very expensive and if you sit down routinely and review your chart of accounts, pull financial statements, AND have a professional cashflow projection setup for you it will save you an enormous amount of stress and time. It's also possible to learn as you go with this, especially if you have an advisor or someone that can check in on your books on a rolling basis. It takes all the mystery out of tax time and will enable you to operate the business with much greater confidence and clarity. I'm partial to Xero instead of Quickbooks FWIW, I find Intuit QB to be death by a million small charges...

I suppose I should clarify a bit: I don't ignore finances until tax time. On any given day, I can tell you what's left in the bank, outstanding obligations, where money is going, and how much runway we have.

Right now professional bookkeeping (even part time), would exceed the cost of offering our entire service, and likely be our largest expense except salaries.

So write it down in a version-controlled spreadsheet, keep auditable records. This should solve your problem and assist hugely if ever you wish to sell the business.

Book keeping takes no time at all.

The best accounting book I've read is called "Double Entry, a history of accounting." pay particular attention to chapter 4, if you want a good primer on basic double entry accounting.

The vocbulary you are looking for is "double entry accounting," google this and read a few tutorials. Understand the basic concepts of asset, liability, revenue, and expense. Understand the concept of income statement and balance sheet. This will get you by til you have the money to hire an accountant.

Accounting is miserable. We’ve had three accountants, and every one of them has been failing to offer a truly paperless workflow, with data exchange in the cloud (instead of e- or snail-mailing documents). They are using outdated, proprietary, arcane, obese accounting software, and each time we end up paying a lot for junior staff retyping invoices and entering data that is already available in a digital, structured format. FWIW, I’ve bookmarked some apparently very interesting plain text accounting tools. Though, I’ve no experience with using these myself (yet), I think they might interest some people here:

– http://plaintextaccounting.org – http://hledger.org/

Have you looked at https://bench.co?

They're provide a tech + manual bookkeeping service, where you have an actual accountant to talk to, aided by technology.

I use them for my LLC, and it's been pretty paperless so far. They can link directly to all my accounts (Chase, US Bank, Citi) for ongoing accounting work. For historical or one-off statements, I upload a pdf statement with highlighted items and notes (fairly simple to do in Mac Preview).

Any questions they or I have is communicated through their dashboard, including assumptions they're making and categorizing outstanding charges.

When you selected accountants #2 and #3, did you specify your requirements (paperless workflow, data exchange in the cloud, importing existing data)?

If so, did they say they could satisfy those requirements, and then later fail to do so? If so, did they give any reason why they misled you?

Yes we did, and they promised a completely paperless workflow, relying on Dropbox for upload of raw documents (invoices, bank and credit card statements), and proprietary accounting software which would ‘automagically’ fetch, parse (including OCR), categorize, and eventually book those.

They did not maliciously mislead us, but failed on their promise because apparently the ‘automagical’ part does not seem to work out so well. Yet, that, imho, is more the fault of the implementation and of its users (the accountants), than it is because such things are too hard to accomplish with the state of current software development (and ‘AI’).

For one, I found it beyond comprehension that any such software would blindly rasterize well-structured PDFs, as does the software used by our accountant, to then OCR the resulting low-res jpg, while wastefully of resources throwing away most of the relevant information, with obviously bad ‘detection’ results. Worse, duplicate uploads would differ, resulting in double bookings requiring the accountant’s assistant using the software to manually fix those errors produced by the software. In the end we end up with a much more expensive accounting bill than we would have had when we sticked to a paper-based flow.

But is doable, and I truly hope some startup grabs the opportunity to implement it well.

So they didn't mislead you, but it sounds like the service they sold you was something they had never delivered before. So perhaps they were optimistic, hopeful, or just thought "what's the worst that can happen if we can't deliver?"

I found Wave Accounting much simpler than QuickBooks. It can directly download transactions from your bank account, and you can email receipts and attach them to transactions.

The simplicity means that I'm more inclined to stay on top of it rather than leaving it all to tax time.

I have a business degree and took accounting in school, but I didn't feel comfortable doing my own books until I did 2 one-hour sessions with my accountant, who refreshed my accounting knowledge and taught me some of the wiles of Quickbooks. I'd recommend this approach to anyone who wants to do their own books.

I also like the strategy of classify your own transactions, but pay your accountant to reconcile your accounts quarterly, and to do your corporate taxes. This lets you stay close to the money and keep your books up-to-date on a weekly basis, which helps you forecast and manage cash flow. At the same time, it ensures your books are correct, and that your year-end tax filing are simple and quick.

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