Quickbooks users

[RunningRoan]

I currently use Quickbooks for my retail business. I like the program and would like to continue using it when I eventually start selling the leather items I make. I am a stickler for accurate accounting...I like to be able to look at my reports and see where I'm at profit and margin wise.

I have made and sold a few small items and I have been receiving in my hardware (conchos and buckles) and selling them out individually when I sell an item. For example, when I sell a headstall I put together, my books show I sold the headstall and each concho and buckle individually. I can see where setting the books up this way may come back to bite me.

I'm thinking I may need to come up with my own item numbers for the items I make. The numbers would reflect the amount/type of leather made and the cost of the hardware (i.e. base priced hardware versus sterling silver hardware). Am I totally overthinking this process?

Does anyone else use Quickbooks for their leatherworking biz? Have any tips for keeping it all straight so you can tell if you're making money or not?

[TwinOaks]

If you make your own item #'s for items you make, you STILL have to account for the components that went into them. At that point you can call them raw materials, as they are part of a larger piece, and you could include them 'at cost' to enhance the sale, but I'd never give them away. Even selling at the retail price for add-ons, you're losing money unless you make a separate entry to show your labor....or price them to include installation whether they're installed or not.

And don't forget you'll need to include entries for 'consumables', such as thread, needles, beeswax, pattern paper, etc. Plus, you need to work out a depreciation schedule for your tools and set aside an escrowed account for tool purchase/replacement.

As far as which program...any should be fine and it's up to personal preference across the board. I'm not busy enough to need it yet, so I don't use one.

Edited July 12, 2008 by TwinOaks

[IanCantwell]

Quickbooks is so simple and should be great for this and it does help you keep track of hardware etc. I use the program (2001) for my pump business in which I assemble pumps from loads of bought in items and a few that I manufacture from raw material. You'll probably have a way of doing this but just in case this is how I do it.

I'd give each individual item you buy a stock part number and also the items you make (or intend to, you just keep on adding to the list). For raw materials (as leather is somewhat evenly priced (swings & roundabouts) I'd use one number. When I purchase items Quickbooks will average the cost price over time so long as you always buy and enter leather by the sq foot or at least convert it before you enter it into Quickbooks, but you can adjust if you need. I go through the usual create purchase order, receive items, receive bill and then Quickbooks will have a record of the stock and it's cost. To track manufacturing costs I set up two new accounts;

1) Other Expense,

Name 'Stock Used In Manufacture', 8030

Sub Account of 8010 Other Expense,

Tax Line 'Unassigned'

2) Other Income,

Name 'Manufactured Stock, 7040

Sub Account of 7030

Tax line 'Unassigned'

Say you make some chaps. Open Item List, click 'Activities, click 'Adjust Qty/Value on hand, for the adjustment account use your 'Stock Used' account. Run through your stock items reducing the quantity by the required amount i.e. -6 nickel conchos, -22 (sq ft of leather if you choose to buy and cost by sq ft), -1 buckle etc. Make a note of the cost price in the bottom corner, save and open new. Change the adjustment account to your 'Manf Stock' account then tick the value adjustment box. Add the number of chaps you've just made and enter the value you noted down, save and close.

Quickbooks now knows you've used all those bits you bought and that you've 'x' pairs of chaps in stock at an average price of 'y'. If you go to 'Chaps' in you item list and double click it you'll have all the info available, don't worry about the purchase price of manf items as you'll not be creating a purchase order for those anyway. Hope this is clear and I'm not teaching you something you already know. PM me if you want.