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ITGuy
Level 2

Expense category for computer software

I have to buy computer software to perform my services for clients. Which type of expense account should I create to track these purchases?

 

Computer software is a depreciable asset according to the CRA (https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...). Even though it's 100% per year, it's subject to the half-year rule so depreciation still needs to be tracked. So, what kind of expense account can I use that can track depreciation?

 

Thanks!

1 Comment 1
LauraAB
QuickBooks Team

Expense category for computer software

Hello ITGuy,

 

Great job finding that article from the Canada Revenue Agency website about how to handle these kinds of things for your business. When it comes to entering them into QuickBooks Online, I recommend checking with an accountant. This will ensure that you've got the details right and will be able to appropriately track the depreciation in your books.

 

QuickBooks Team members such as myself can show you the ropes of the program, including where to go to create accounts and the mechanics of entering the details. When it comes to knowing which details to enter and the finer points of configuration, it's important to touch base with an accounting professional for help.

 

There are some accounts in QuickBooks Online, such as the property, plant and equipment Account Type that have Detail Types that can track depreciation, but whether this is what you'll need to use to set up an account for your situation is something you can work out with an accountant.

 

If you already have an accountant you're working with, it's easy to add them as a user on your QuickBooks Online account. Simply go to the My Accountant tab and enter their email in the invite field to invite them as a user. You can also use the Find a Pro to Help feature in the same tab to discover QuickBooks-savvy accountants in your area.

 

Stop by again if you need anything else.

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