Tuesday, February 23, 2016

Choosing a Start Date

To keep your entire financial history at your fingertips, you need to put every transaction and speck of financial information in your QuickBooks company file. But you have better things to do than enter years' worth of checks, invoices, and deposits, so the comprehensive approach is practical only if you just recently started your company.
The more realistic approach is to enter your financial data into QuickBooks starting as of a specific date and, from then on, add all new transactions to QuickBooks. The date you choose is called the start date . (The start date isn't something that you enter in a field in QuickBooks; it's simply the earliest transaction date in your company file.) You should choose it carefully. Here are your start date options and the ramifications of each one:
          The day you start your company. If you just started your business, the startdate decision is easy: it's the day you start your company.
    The last day of the previous fiscal year. If your business has been running for a while, the best approach is to fill in your records for the entire current fiscal year. To do that, use the last day of your company's previous fiscal year (or December 31, if you use the calendar year) as the company file's start date. That way, the account balances on your start date are like the ending balances on a bank statement, and you're ready to start bookkeeping fresh on the first day of the fiscal year.
Yes, you have to enter checks, credit card charges, invoices, payments, and other transactions that have happened since the beginning of your fiscal year (see online Appendix I available from this book’s Missing CD page at www. missingmanuals.com/cds ), but that won't take as much time as you think. And you'll regain those hours when tax time rolls around, as you nimbly generate the reports you need to complete your tax returns.
If more than half of your fiscal year has already passed, the best approach is to be patient and postpone your QuickBooks setup until the next fiscal year. (Intuit releases new versions of QuickBooks in October or November each year for just that reason.) But waiting isn't always feasible. In cases like that, go with the next option in this list.

    The last day of the previous fiscal period. The next best start date is the last day of the previous fiscal quarter (or fiscal month, at the very least). Because your company file won't contain a full year's worth of detail if you go this route, you might have to switch between QuickBooks and your old filing cabinets to prepare your tax returns and look up financial information.

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