What specific QuickBooks entry do I use for the following?

Hello CharmX,

I know how important it is to make sure you're entering data into your books correctly and will do what I can to explain the different options in QuickBooks Online.

The transactions you're describing sound like purchases made for your company. In QuickBooks, there are three main options for entering these kinds of transactions: expenses, bills, and cheques. Which you use depends mostly on how the transaction occurred in real life.

An expense is a single transaction where you paid for the item you're receiving or service you're using immediately.

A bill is a two-step transaction, whereby you've received an invoice from your vendor (such as a phone bill), and have a period of time before the bill payment is due.

A cheque is much like an expense in that it's a single transaction. You can use this if you paid for something via cheque.

I've got a few articles here that explain each of these in more details.

• How to enter, edit, or delete expenses
• How to enter and pay bills
• How to write cheques

Please consult an accountant if you're looking for a more in-depth consultation on which you should be using. While I'm able to tell you the options in QuickBooks Online and how they work, I'm not able to advise on which to use for your scenarios. You can even connect with an accountant through the program by inviting one you're already working with as an accountant user or by using the Find a Pro to Help tool through the My Accountant tab. Finding an accountant is as easy as clicking the button and entering your postal code to search for QuickBooks-savvy accountants in your area.

Read the Invite or remove an accountant article to learn how to add one as a user.

I hope that helps!

Thanks LauraAB for your response. While I'm already familar with the difference between expense, bill, and cheque its always good to get a refresher.

As for the suggestion of an accountant, I hear you but it's not worth my while if these are the only clarification I need.  This is why I'm just trying to get a quick answer. The items I have listed are common expenses for e-commerce business and was hoping someone would quickly know where these transactions would fall under. I know the easy answer is speak to an accountant and I will do so in the following year when business picks up but for now, I'm, not insterest in spending a high minimum for a few straight forward transactions. I'm hoping someone in the community will have an answer for it. 

Gotcha. I hear what you're saying about looking for a quick answer. Luckily, we have a number of accountant users and other users like you who may offer their insight into what you can use in this instance. I'll leave this to them. :)

1. Domain name purchases on GoDaddy? Also is a domain name treated as an asset as well as an expense?

Some would argue it should be treated as an asset, and amortized over the life.

My point of view is, if you paid $99.99, or even 999.99 I would take it as expense:

DR Computer & Internet Expense

CR Bank

2. Shopify's monthly fee for hosting my online store?

DR Shopify Charges (i would define near Bank Charges, Merchant fee, but keep it seperate)

CR Bank

3. Purchase goods on AliExpress used to resell in my Shopify store?

DR Asset (Inventory)

CR Bank

4. Pay Pal expense?

If Purchase goods for used to resell, then I would 

DR Asset (Inventory)

CR Bank

If items are for Office use or warehouse:

DR Office/Warehouse Supplies

CR Bank

If its just Paypal fee:

DR Paypal charges

CR Bank

5. Canva monthy fees (Canva is a tool used to edit images)?

DR Computer & Internet Charges

CR Bank

I hope this helps,

Thanks

Hi CharmX. Your question is quite old now, but I came across in doing some Shopify integration research.

As a bookkeeper at an accounting firm with a variety of clients, we have seen a couple of trends. 

- Create and expense account called Online Software, Online Software Fees, or Software and Subscriptions.

- Some people like to also create a separate line for Memberships so that they are breaking out the cost of monthly service fees as opposed to software costs.

- If you are buying things that you are reselling, if you are not using the inventory function of QBO, those can potentially be Cost of Goods Sold (or Cost of Sales). That is something that would be good to get advice on for sure.

- I would not capitalize domain renewals as another person suggested. First, with our firm, we generally do not capitalize anything that is 499.99 or less. Second, domain renewals are an annual recurring cost. It would be like capitalizing your monthly rent fee, which is essentially what a domain fee is. You are paying rent to use that address. As well, your domain could cost $500 per year while your website is worth $1,000 as an asset, or you could be paying $29.99 per year for your domain with a website that is worth $20,000 as an asset. The domain really is not equal to the value. Again, that is something I would seek advice on to help you determine the correct value and depreciation schedule.

This was helpful - like the software and subscriptions new expense category - but would be the detail type for GoDaddy, domain or email, Canva etc. and would the new name be Software & Subscriptions and is it tied to a sub-account?

I'm not sure I fully understand your question, but I mean you would add an Expense account with the name of your own choosing, like Software and Subscriptions, or Online Software, or something along those lines. It woudl be an Expense type, and for the detail type, it could be the other general admin costs, or something like that. Choose the best detail type that speaks to you. For the subaccount, that really depends on how you set up your own chart of accounts. I tend not to have headers and subaccounts, but if you have a header account like Office Expenses, or maybe General Admin, something like that, and you have subaccounts under those, then I would think that would fit. 

As to GoDaddy, Canva, etc., those are the payees, or suppliers. you don't put them as the category. you would put them in the payee field, select Software and Subscriptions (or whatever you created) for the Category, and you could put details in the Description line, like domain renewal, or software, or something that means something to you that might be helpful when looking at the expense in the future or for retports.

HI JR

For name would be Software & Subscriptions and is NOT tied to a sub-account.

Account Type is Expense.

Thanks, AK

Hi! 

Silly question, but what is DR and CR?

Thanks!

Hello,

In Accounting:

DR stands for Debit (transactions)

CR for Credit (transactions).

Regards, 

When I purchased/registered a domain name on my credit card, I expensed it under my category "hosting/Domain names." I have never resold one but have now received an offer to purchase one. I have long since expensed it as a business expense above.

Because I am now selling it, conceptually is now inventory whereas before it was an expense.

Could I 

a. Leave the original entry as an expense (long since reconciled account etc --not wanting to mess with a reconciled account).

b. Create an invoice for the item (but then this would be an invoice for an expense that is not in inventory so isn't that counterintuitive?)

c. Receive the funds as if a payment against an invoice?

When I do my year end P&L this seems like a real problem as I will have an expense, but a sold item against an expense, not against a service rendered.

My business is never an inventory sold business. I only sell consulting services. I must do this by year end to pay only income tax vs. capital gains so I need to work it out