Deciding whether to use Quicken or QuickBooks is a matter of your accounting needs and abilities. Some accountants suggest clients use QuickBooks; however, not everyone is comfortable with accounting terminology or procedures. The following paragraphs highlight some of the differences in Quicken Deluxe compared to QuickBooks Pro (these versions offer the most features and flexibility).
First, consider your computer and accounting skills. If you can navigate through basic computer programs, know what a file is, can operate a mouse, know the X in the corner of a window closes it, and know how to write a check, then you can learn to use Quicken. QuickBooks is also user-friendly if you understand accounting terminology. However, with QuickBooks, it is important to get the set-up right from the beginning. Quicken is a little more flexible and can grow as you learn to use it.
Consider your accounting needs. What do you expect from the program? If you need to track simple income and expense records on a cash basis then Quicken is easier to set up, simpler to use, and less expensive. QuickBooks can be used for single-entry cash accounting, but it is intended to function as a double-entry system for business.
Some important Quicken features that are not available in QuickBooks:
The ability to record and track investments (including the capability to download investment information from the Internet). QuickBooks allows for no investment record-keeping.
The capability to create an amortized loan that records principal and interest components of loan payments. This feature makes tracking loan amounts and splitting payments into the correct categories more precise.
The ability to easily generate cash flow reports as well as budgets based on past transactions.
QuickBooks has the following features that Quicken does not:
The ability to create invoices and track payments received. (If you only need simple and infrequent invoicing features, then you may want to look at the Quicken Home and Business program.)
The ability to create accounts payable and track the payments as they are made. Payroll features are provided as a for-fee service, ranging from downloadable payroll table updates to complete payroll services. Other payroll features include the ability to track time for employees and link the time spent with specific projects.
Inventory features. However, this feature is of limited value to most farmers and ranchers as it is designed for a retail business. It can be helpful to producers selling certified seed, for instance.
The ability to accept credit card payments (with the use of QuickBooks Account Manager).
What Quicken and QuickBooks both offer:
The programs are affordable. Quicken Deluxe is about $60 with a $20 rebate for previous users; QuickBooks Pro can be purchased for about $220.
Both have class features which allow you to track income and expense information by enterprise for better financial analysis.
Both include a variety of reports for tracking income and expenses and tax information. However, the QuickBooks reports are more business oriented and tend to resemble standard accounting statements.
If you still aren't sure which is right for you, go to the Quicken.com or QuickBooks.com websites. You can try a trial version of QuickBooks.
Where do I find technical support for my Quicken questions?
If you have internet access, check out http://www.intuit.com/support to see if an answer is posted to your question. You may also e-mail or call me and my assistants. If you e-mail a question, remember that you are describing your problem to someone who is unfamiliar with your file and computer expertise. Please provide sufficient detail with respect to your problem so that an outsider can understand and be as specific as possible with respect to your question.
How do I use the Help features within Quicken?
Choose Help from the main menu and click on Contents. Search the list or click on the index tab. Within screens, press F1 to retrieve the help menu.
How many files and accounts do I need? Should I keep more than one business in my Quicken file?
Most producers need only one Quicken file. Farm and non-farm expenses can be separated using classes. Hopefully, you have at least two checking accounts: a separate checking account for the farm and one for the family. In farm businesses, funds are often transferred between the personal and farm accounts. For transfers to be recorded, the personal and farm accounts need to be set up within one file.
More than one file is appropriate if personal and business transactions are kept entirely separate and money is never transferred between accounts. If you have a non-farm business (say a car wash or a franchise) in addition to a farm business, again it would be best if you had separate checking accounts for the two businesses plus one for personal use. You might want to have a separate file for the farm business to highlight its separateness for business management and tax purposes. But, if money is transferred between businesses and accounts, it is possible using separate classes and checking accounts within one file to create reports for the separate businesses for management and tax purposes.
If you are keeping financial records for a community or civic organization using Quicken, certainly you should have a separate file for those records. If your children are using Quicken to monitor their finances, you may want to set up a separate file for each to limit their access to family files. You can password protect files to prevent tampering (but this does not prevent moving, copying or deleting the file).
What are the problems with keeping my children's accounts in my file?
If you want to teach your children to be fiscally responsible, you may also want to encourage them to use Quicken to track their checking account and cash transactions. However, you may not want them to have access to the family file. One solution is to set up their accounts in a separate file and to password protect your file. Adding a password is an easy way to ensure that your financial records remain private and tamper proof. If a password is placed on your file, it is not possible to gain access to or change any information unless the password is known. (However, the file can be copied, moved, or deleted without the password--make sure you have a backup disk!) Care should be exercised if passwords are used--if you forget the password, you cannot retrieve your financial records!
To add a password to control access to your file, choose:
File Password File Quicken File Password New Password: Confirm Password:
Enter the combination of letters and/or numbers that you have selected.
Click on OK.
Now, anyone who wants to open your file must use the password.
You may want to occasionally change the password to protect your records. To change a file password, choose:
File Passwords File Change Password Old Password: New Password: Confirm password:
Type in the appropriate responses and choose OK. To remove the old password and return to unrestricted access to the file, simply type in the current password and leave the New and Confirm Password fields blank.
What is the difference between a class and a category? How do I use subcategories?
When using the Quicken register, you can record detail for each transaction that will help you sort information for reports. The category is the type of income or expense. Tag is used to identify a transaction independent of the income or expense label. The tag can be used for instance to name the enterprise (wheat, cow/calf, stocker, alfalfa, etc.).
Categories are used to designate the kind of income (for example, crop sales, salary or insurance proceeds) or expense (for example, seed, groceries, auto, or feed). The category list may be designed to be useful for both tax purposes and financial analysis. The user can then evaluate how money is spent and how income is generated.
A subcategory is an additional level of identification. It enables the user to note more detail while keeping the information grouped. For example, you may wish to track fuel costs separately from vehicle repairs. Auto:fuel records gas and diesel costs and Auto:repairs tracks expenses for repairs such as tires, starter, or fuel pump. Reports can be created to list totals for subcategories individually or fold them into all auto expenses.
The tag feature adds an additional level of information to financial records. The tag specifies the where, what, or to whom the transaction applies. For example, a check written to the local supply store is for feed, fertilizer, and tires. Within that transaction, you categorize the feed as Feed Purchased and the tires as Auto:repairs. Those items could then be attributed to an enterprise (tag) that was the cause for the expense. Feed Purchased could be assigned the Cow/calf tag, Fertilizer the Wheat tag, and Auto:repairs a Family Living tag.
Reports can be arranged so that columns show the total amounts by tag. Choose
Reports Banking Cash Flow by Tag
The inflows and outflows will be separated for each tag plus an overall total will be given. The user can begin to evaluate whether an enterprise is making or losing money.
Users will have to determine how best to sort information using a subcategory or tag along with a category. It is those designations that make the use of a computerized record keeping system like Quicken useful for analysis.
Note: A subcategory could be used to designate an enterprise, but don't use it that way. Most enterprises have many income and expense categories in common. For instance, all crops may have seed, fertilizer, and pesticides. Using sub-categories to separate wheat and alfalfa seed causes a lot of redundancy in the category list. In most situations, the best way to track an enterprise is to use the tag feature.
How should I separate farm and family expenses?
Keeping farm and family expenses separate is important for budgeting, controlling costs, and determining if the farm operation is self-supporting. People are often tempted to set up a farm category with numerous subcategories and a family category, also with numerous subcategories. But, there is a better way! Using classes in combination with categories for transaction identification provides the greatest flexibility for sorting and summarizing information.
Use the default Quicken categories, an imported farm category list, your customized chart of accounts, or some combination of these to label income and expense transactions. Use the "class" feature to denote whether the transaction is farm or non-farm (personal, family living, or whatever you want to call it). Rather than having all "farm" transactions lumped together, you may want to identify different enterprises, projects or profit centers as classes (for example, wheat, cattle, pasture, alfalfa, stockers and overhead). This allows you to create reports that have labels along the left side for the income and expense categories and class names (for example, wheat, stockers, and non-farm) across the top (see sample report).
To create a class, from the main menu, choose:
To create a class, from the main menu, choose:
Finance Class List (or press Ctrl+L) New (located in "My Finances:Class List" menu) Set Up Class Name: Family Living Description: Copy Number (optional): (Used if you are filing multiple copies of a tax form.) OK
To denote the class for a transaction, in the check register put a forward slash following the category. For example, in the category line of a transaction for groceries attributed to family living enter as Grocery/Family Living.
How do I record overhead expenses?
Hopefully you are aware of the "classes" feature that enables sorting income and expenses by enterprise (or project or partnership). Some expenses are hard to allocate to individual enterprises, however. For those expenses, add a class called Overhead. Overhead expenses are the costs necessary to run the operation that are not directly attributed to a specific enterprise. Examples are the farm portion of utilities, insurance, and real estate taxes.
At the end of the year, you may want to evaluate enterprise profitability by allocating as much of the overhead costs as possible to each enterprise. This allocation process can be simplified by printing a cash flow report with the columns sorted by class. The categories in the Overhead class can be allocated to the appropriate enterprises that created that expense item. For example, electricity may be used by the cow-calf operation for the watering system and electric fence charger and by the hog operation for heating lamps.The cost of electricity could be allocated based on their estimated share of the total use (say 90% and 10%) or the proportion each of the enterprises contributes to the total expenses for the year. For other enterprises, overhead expenses may be allocated based upon the total number of head produced for like enterprises such as summer and winter stockers or the number of bales produced from prairie grass and bermuda hay. Allocations can also be made based upon acres produced or the number of tillage operations needed for various crop enterprises. Choose the method of allocating overhead expenses that seems appropriate for the situation.
To create a class, from the main menu, choose:
Finance Class List (or press Ctrl+L) New (located in "My Finances:Class List" menu) Set Up Class Name: Overhead Description: Copy Number (optional): (Used if you are filing multiple copies of a tax form.) OK
To denote the class for a transaction, in the check register put a forward slash following the category and optional subcategory. For example, the category in a transaction to record insurance expenses might be: Insurance:liability/Overhead
Help! My category list is a mess. How do I clean it up?
Have you checked your category list lately? You may need to "clean it up" or eliminate unused categories and be sure that there is no duplication so that your reports are clear and meaningful. One way to determine which categories have been used is to print a cash flow statement with the categories as rows. You may discover that you have two (or more) similar names that should be combined. For instance, you may have Int Exp and Interest Paid categories when only one is needed.
With your Quicken file open, choose:
Reports
Spending Cash Flow Report and customize the dates to Include all dates.
Print the report and have it at hand while you view the category list on screen (choose Finance, Category & Transfer List or press Ctrl+C). Delete any categories in the list that do not appear in the printed Cash Flow report. Highlight the cateogry, then click on
Delete Delete Category OK
If an unused category contains subcategories, the subcategories must be deleted before the category can be eliminated.
Let's say that you want to delete the Interest Paid category but want to be sure that any transactions with this category would have Int Exp substituted. Highlight the Interest Paid category in the list and click on Delete. Then, select Replace Category and scroll through the list to select Int Exp (be sure that you don't select an interest category in the income section), then click on OK.
Checking your category list is sort of like spring cleaning; it's not something you enjoy doing, but it provides longer run benefits. If your category list is in order, you will have fewer corrections and changes to make when you want to print a cash flow statement for a lender or work on a budget for the coming year.
How do I record a line of credit in Quicken?
If you have a line of credit, you may want to keep a close watch on the limit. In Quicken, the best way to record transactions for a credit line is to create a credit card account (not a liability loan account). Choose:
Finance Account List New (in top middle of "My Finances: Account List" window). Credit Card Click on Next.
Credit Card Account Setup
Enter a name and optional description Account Name: Line of credit Financial Institution: 1st National Bank Description (optional):
Click on Next.
Enter the starting point information.Statement Date: 4/10/02 Balance Due: 75,632.24
Click on Next.
Enter the credit limit for this account: Credit Limit, if Applicable: 100,000
Click on Done.
If you want to monitor the balance closely, Quicken has a credit limit alert that will warn you when the amount approaches the limit. Choose:
Finance Alerts
Select Actions in the upper right corner of the alrets window and select Set up Alerts.
Click on OK.
Recording the transfer of funds into the checking account from the line of credit is easy. Open the Line of credit account and click on Transfer (top left corner of the register screen). If $20,000 is advanced, enter:
Transfer Money From: Line of Credit To Account: Checking Date: 1/12/01 Description: Transfer Money Amount: 20000 Click on OK.
This account can be reconciled with a loan statement in the same way that checking accounts are reconciled with the bank statement. Information that will be needed from the loan statement includes charges and cash advances, payments and credits to the account, and the ending balance.
Note: If you have a credit card account, but did not specify a credit limit when you set it up and now want to do it, choose your credit card account from the account list (press Ctrl+A to get the account list or click on Finance, Account List), then choose Edit (from the account list window), enter the Credit Limit and then click on the X to close the window. Click on Yes to save the changes.
Why should I reconcile my Quicken accounts?
If you are not currently reconciling your bank and credit card statements in Quicken, you should be! Here is why:
Opportunity to make sure the bank is handling your money correctly.
Catches duplicate entries, switched numbers, or transactions you forgot to record.
Helps discover someone has stolen checks from your checkbook.
Allows use of the "Start New Year" feature.
During the reconciliation procedure, items you check are marked as clear ("c" in the Clr column between Payment and Deposit in the check register) until the reconciliation is completed, then the column is changed to an "R." Any unreconciled transactions will transfer to new files created using "Year-End Copy, Start New Year."
How many years of data should I keep in my active Quicken file?
I personally like having access to as many years as possible; therefore, I keep all years in my file, even though I had to back it up on 5 diskettes at one time (I now use CD-ROMs). Unlike shoe boxes, computer files don't take up much space in the office and with newer computers the size of the file rarely causes memory problems. If you insist on periodically reducing the size of the file, keep at least three years of data in your file for historical comparisons.
I have 5 or 6 years of records in one file and it's too big to backup onto a floppy. How can I remove a year or two of data and save a new version?
First, you should be aware that you can backup your file onto multiple diskettes without a problem. This allows you to keep several years of data in your file so that you can create reports using several years of data. I personally like having access to as many years of data as possible for comparison purposes. However, if you insist on reducing the size of the file to say three years, Start New Year, is an option. If you don't reconcile your accounts with bank and credit card statements, this feature doesn't work well, because all unreconciled transactions remain in the file. (If this is the case, you may want to export accounts and transactions for a specific time period to a QIF file. Create a new Quicken file and import the transactions in the QIF file to this new file.) Start New Year saves a copy of the current file, while creating a new file to contain only the data from the date you set and forward. You aren't "losing" any data entered--previous years' data stays in the copy file. You are simply making a new file to include transactions only for the most recent specified year(s) (plus any unreconciled transactions and all investment transactions). To get to Start New Year, choose:
File File Operations Year-End Copy Start New Year OK Click on OK. Select File for New Year and click on OK.
How often should I backup my Quicken file?
To protect your financial data, make a backup copy on a regular basis. If you enter data once a week, you may want to back your file up every other week or monthly. If you enter data monthly, you may want to back it up each time you enter data. The purpose of backing up a file is to minimize the amount of pain and anguish that would be caused if you had to re-enter data added since the previous backup. Think about backups as a strategy to minimize your potential regret. They don't take long to do. If you've ever had a problem with a file, you'll become a believer in frequent backups.
As an added level of protection against data loss, it is wise to keep more than one set of backup disks and alternate their use. Diskettes can be damaged by rough handling, exposure to magnets, dust, or extreme temperatures. A damaged diskette may make it impossible for a user to restore a backup file. Data that is backed up can be recovered in the event that a computer is disabled or files need to be moved.
How many backup sets of my file should I keep and how do you recommend that I backup my data?
Data that is backed up can be recovered in the event that a computer is disabled or files need to be moved. The purpose of backing up files is to minimize the amount of pain and anguish that would be caused if you had to re-enter data added since the previous back-up. Think about backups as a strategy to minimize your potential regret. Keep more than one set up backup disks and alternate their use. Buy a new box of diskettes every two or three years as diskettes are intended to be temporary storage and may be damaged by rough handling, exposure to magnets, dust, or extreme temperatures. A damaged diskette may make it impossible for a user to restore a backup file. Finally, to protect your financial data, make a backup copy on a regular basis.
What is the difference between Start New Year and Archive?
If you have a large Quicken file you may want to consider making an archive file or starting a new file that retains only one year of data (or two or three if you want to retain the capability for comparisons).
Archive is similar to making a backup copy. The current file is copied onto the hard drive under a different name. Since all transactions remain in the original file, you can create reports and graphs that include historical data.
For example, let's say that you have been entering financial records in Quicken since 1997 in a file called FARM. Now you want to archive the data prior to and including December 31, 2001. Choose:
File File Operations Year-End Copy Archive OK
The prompt for a cut-off date for archiving is 12/31/01, the end of the previous calendar year. You can choose a different date by clicking on the calendar or typing in a date.
Click on OK.
You will receive a message that the file has been copied successfully, and will be prompted to choose whether you want to use the current file or the archived file. Since the archive file is simply for preserving historical records, continue to use the original file for recording transactions.
Click on OK.
The other alternative, Start New Year, is recommended if data files are getting so large that your computer's memory is taxed or file backups are a problem. If you don't reconcile your accounts with bank and credit card statements, this feature doesn't work well, because all uncleared transactions remain in the file. (If this is the case, you may want to export accounts and transactions for a specific time period to a QIF file. Create a new Quicken file and import the transactions in the QIF file to this new file.)
Start New Year saves a copy of the current file, while creating a new file to contain only the data from the date you set and forward. You aren't "losing" any data entered--previous years' data stays in the copy file. You are simply making a new file to include transactions only for the most recent specified year(s) (plus any uncleared transactions and all investment transactions). To get a Start New Year, choose:
File File Operations Year-End Copy Start New Year OK Click on OK. Select File for New Year and click on OK.
In summary: Archive retains all historical information in the current file. Start New Year helps you to reduce the size of the current file by moving older information to a copy file.
Should I buy the latest Quicken update?
In recent years, the improvements in Quicken are primarily in investing and online banking features. For the tasks covered in our farm financial record-keeping instructions, there are rarely any compelling reasons to buy a new version. In fact, file conversions associated with updates occasionally have problems and some of the "time-saving" features are an annoyance if you have a system you like and with which you are comfortable. Unless you see a feature in the new version that you simply must have or believe would greatly enhance what you are currently doing, consider waiting until your software or hardware necessitates a new purchase to minimize your frustration and headaches.
What additional tools are available to assist me in farm financial management?
OSU's Integrated Farm Financial Statements (IFFS) software is a spreadsheet to
facilitate farm/ranch financial planning and analysis. You can import Quicken financial data into a whole farm cash flow or a series of enterprise cash flow budgets. IFFS can generate customized enterprise budgets, a monthly cash flow statement, a debt worksheet, balance sheet, income statement, and financial ratios and other measures. The initial year plan can be rolled forward one or more years with the same or altered budgets, additional information, and capital sales and purchases.
IFMAPS provides free, confidential individual assistance in financial management and planning to Oklahoma producers.
A trained professional will consult with you to develop individual enterprise budgets and whole farm financial statements. Call 1-800-522-3755, contact your local Extension Educator for more information, or visit the IFMAPS website.
OSU's budget spreadsheets provide users access to important agricultural references during an "interactive" budget
building process. Through links and pop-up menus, the user enters data to customize a budget to fit a particular operation.
The budget set includes spreadsheets for wheat, cow/calf, forage (pasture or hay), stockers, grain sorghum, soybeans,
alfalfa, barley, corn, corn silage, rye, cotton, sudan, oats. A one-page report summarizes key production items and prices,
operating and fixed costs, plus breakeven prices and yields. Supporting reports, such as fertilization or feeding practices
specified, may also be printed Sample budgets and supporting reports may be viewed at
http://www.agecon.okstate.edu/budgets.
Links to Internet databases and references point users to additional information. In addition to estimating the full economic
costs and returns for an agricultural production activity, OSU enterprise budget software may also be used to generate cash flow budget files for IFFS software. this compatibility provides an integral link to whole farm and ranch financial statements and plans.
To learn more about other resources available through the OSU Agricultural Economics Department, see
http://www.agecon.okstate.edu.
What do I need to know about sending Quicken files electronically?
If you are e-mailing your Quicken file to a financial advisor or accountant, be sure that you e-mail all the computer files associated with your Quicken file. For instance, in Quicken 2002, a file named MyFarm would have these files to send: MyFarm.QDF, MyFarm.QEL, MyFarm.QPH, and MyFarm.QSD. Be aware that your advisor must have a version of Quicken that is the same as yours or newer to be able to open your file. If the advisor opens the files you send with a newer version, the file will be converted in the process and cannot be returned to you in a form that can be used by the older version.
Can I prepare accrual-adjusted farm financial statements with Quicken?
Quicken is a cash record-keeping tool, with some features that allow you to track liability balances and a
lot of features to assist you in tracking investments. As such it does not easily lend itself to preparing
accrual-adjusted farm financial statements (for more on farm financial statements, see OSU
F-751, Developing a Cash Flow Plan;
F-752, Developing a Balance Sheet;
F-753,
Developing an Income Statement; and F-790, Evaluating Financial Performance and Position).
If you are very determined you can set up a series of asset and liability accounts in Quicken in which you can
record cost and market values for assets owned and the periodic changes needed to keep them up-to-date.
However, it may be easier to use another software package (for example,
OSU's Integrated Farm Financial Statements or
the University of Minnesota's FINPACK)
or a spreadsheet or even a hand-record keeping system to track changes in cost and market value of assets to
supplement your Quicken accounts.
I want to start reconciling transactions, but it is the middle of the year. How do I start?
The first time that you use the Quicken reconcile feature, it will prompt you to begin the reconciliation with an opening balance that matches the amount you specified when you set up the account. If you used a bank statement in specifying that amount (which is recommended), you can begin the reconciliation process using your bank statements in chronological order (see Reconciliation instructions for an example of reconciling one month). Go one by one through your statements reconciling each month. If you are interrupted or need to stop while in the middle of a reconciliation, click on Finish Later. You may have to re-enter information on the first screen, but transactions you have marked as cleared will be retained for a later session.
If you did not use a bank statement in establishing the opening account balance or want to begin reconciling mid-year, choose a bank statement with which you will begin. You may have to mark as clear all historical transactions and allow Quicken to make an adjusting entry to balance the account. From this point forward, you should be able to reconcile monthly with your bank statement.
How do I find a transaction?
It is easy to find transactions entered in Quicken, whether you are looking for a check written to a specific store or all checks written for more than $500. Start by choosing:
Edit Find & Replace Find (or press Ctrl+F)
You will get the following screen:
In the Find field, you can type the word or number for which you are looking. With Search, you can specify where to look for the word or number. Search options include All Fields, Amount, Cleared Status, Memo, Date, Category/Class, Check Number, and Payee. You can further define the search using a criterion specified with Match if: Contains, Exact, Starts with, Ends with, Greater, Greater or equal, Less, Less or equal. Once you have defined your search, click on Find All.
For example, to find a check written to Steven's Feed Store, enter the following information:
Find: Steven's Feed Store Search: Payee Match if: Contains
Note that the spelling in the Find field must be the same as it was when entered in the check register. If you are not sure whether it was Steven, Stephen, Steven's or Stephen's, you may have to try all four spellings. If you have new entries automatically memorized (Edit, Options, Memorize, QuickFill, Auto Memorize New Transactions), another option for finding a payee is to scroll through the memorized transactions list to find the Payee. Choose Banking, Memorized Transaction List (or press Ctrl+T) then click on Report.
To find checks written for amounts over $500, choose Edit, Find & Replace, Find and enter:
Click on Find All.
When and where are workshops offered?
The Oklahoma Cooperative Extension Service offers “hands on” computer workshops to producers interested in becoming more familiar with financial record keeping software. Contact your local Extension Educator-Agriculture to request a workshop and to find out when a workshop is scheduled in your area.
No previous experience with Quicken is needed. Because the number of computers is limited, pre-registration for workshops is required.
A $25 registration fee is charged per computer station. Couples, business partners or friends may choose to share a computer (and thus the registration fee). The registration fee includes one notebook with CD-ROM with all files plus video instructions.
If interested in attending a workshop, please call the local OSU Oklahoma Cooperative Extension Service Office.
Materials may be purchased independently of the workshop from the OSU Agricultural Economics Department for $25 (See Download the Manual). Workshop participants or notebook purchasers continue to get tips and financial information through the quarterly QuickTips newsletter. It contains reviews of commonly used Quicken® tasks and shares financial management tips.
