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Frequent Explorer *

Dog Breeding initial setup, Invoices, COGS vs Costs

I have previously used Excel to keep records for selling/costs, but now I have Quickbooks Online, and am contemplating using the Quickbooks Pro 2019 standalone software. 

 

What I am looking for is how to correctly set up the books from the start.  We have several female and male dogs that we breed, and the females will have litters.  We also have to pay for a stud service from overseas, for the line that we are choosing to continue next generation. Each litter would/could have a different male (our own stud or we outsource), so I am wondering how to correctly set up the vendors/jobs/general costs/costs of goods sold/etc. There are tests and fees for showing our dogs that we breed, but would that be COGS or something else because we are not selling the mother dogs, and only the puppies? If so, are those costs divided into the litter pups individually? So to that point, would we set up a new client for each puppy we sell to, or as a litter as a whole (say 10 puppies) and then that mother/father combo as the job, and that job had 10 invoices connected to it?

 

The other thing in question would be the costs that we have for any dog that does not pass 100% of their tests, at which point we will not breed with that dog unless it is 100% passing all our testing.  Therefor there will be no income from that dog, and only expenses. What would that be classified as or how to mark it?  If never sold, it cant be a COGS, so how would I record it on the books?  We would have ~2 years of expenses before they can get fully tested and certified.

 

We also had to build things, which is used by all the dogs, and of course dog food and other items.  What I am unclear about is what is the difference between COGS and general costs, as well as how do we correctly set up the sale of the puppies (invoices) from a female dog's litter. Does it make sense to separate each individual litter, or each puppy, or each mother dog?

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Best answer 02-21-2019

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Established Community Backer ***

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

You need to review your operations with your own CPA, if you intend to do your own Bookkeeping. They will help you learn what is Expenditure as Asset, or COGS or general operating Expense. That is important for You to know, not us. And your Tax Entity Type also matters. Get the tax form this entity files; there is the Accounting reference for your chart of accounts.

 

For using QB, I would do "Job Tracking" like this:

 

The Mother is a Customer Name. The Litter is Job Name, subcustomer. There are Fields, so you can assign Job Type as Sire. Then, if you need to track costs specifically allocated to each animal, that is called Job Tracking. When you Sell that little one, you will Edit Job name and fill in the real owner address info and list this name for the Sales Receipt, top Left = Customer and Job (the puppy) and Name and Address = the Buyer/Owner. Now you have all the record keeping. You also have Account #, if you need to track AKC info, for example. You can use Job Type and Customer Type, such as:

 

Customer Type = mother is a German Shepherd or Collie (breed), and Subtype can even be Toy or Miniature and Subsubtype can be Longhair or Wirehair. Now the puppies listed under the Mother are able to be reported on by using, for instance, List report, for Puppy name, mother name, sire, breed and size and other conformation issues.

 

Customer type and Job Type allow for 5 levels, each.

 

And then you can use that in reporting: How many Collie puppies did we sell in each of the last 5 years? How many of them were sired by Rover and which mothers (customer name)?

10 Comments
QuickBooks Team

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

Appreciate the complete details of your concern, @SleepyMorningGoldens.

 

Whether you need to track income and expenses, send invoices, or set up Cost of Good Sold you can count on QuickBooks to make these tasks easier. Let me share some information on how you can unlock the different accounting features in the program to its full potential.

General cost (expenses) and cost of goods sold (COGS) are both expenditures that companies or individuals incur with running a business.

There are different ways you can to track your income and the expense incurred for each dog you have. For a more detailed information, you may check out these articles:

Also, I’d recommend consulting with your accountant to make sure your books are set up to suit your needs.

 

If you need further help with the steps above, I’d suggest contacting our Customer Care Team. A specialist will be able to further assist you via secured remote access session.

 

Here’s how to contact us:

  1. Go to the Help menu.
  2. Click Contact Us.
  3. Under How can we help?, type in a keyword about your concern.
  4. Hit Continue.
  5. Click Get our phone number to contact us.

Feel free to visit our Community page if there are any accounting and bookkeeping features you’d like to get more familiar with. I’m always here to answer your inquiries about managing your account and navigating around QuickBooks Online.

Established Community Backer ***

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

You need to review your operations with your own CPA, if you intend to do your own Bookkeeping. They will help you learn what is Expenditure as Asset, or COGS or general operating Expense. That is important for You to know, not us. And your Tax Entity Type also matters. Get the tax form this entity files; there is the Accounting reference for your chart of accounts.

 

For using QB, I would do "Job Tracking" like this:

 

The Mother is a Customer Name. The Litter is Job Name, subcustomer. There are Fields, so you can assign Job Type as Sire. Then, if you need to track costs specifically allocated to each animal, that is called Job Tracking. When you Sell that little one, you will Edit Job name and fill in the real owner address info and list this name for the Sales Receipt, top Left = Customer and Job (the puppy) and Name and Address = the Buyer/Owner. Now you have all the record keeping. You also have Account #, if you need to track AKC info, for example. You can use Job Type and Customer Type, such as:

 

Customer Type = mother is a German Shepherd or Collie (breed), and Subtype can even be Toy or Miniature and Subsubtype can be Longhair or Wirehair. Now the puppies listed under the Mother are able to be reported on by using, for instance, List report, for Puppy name, mother name, sire, breed and size and other conformation issues.

 

Customer type and Job Type allow for 5 levels, each.

 

And then you can use that in reporting: How many Collie puppies did we sell in each of the last 5 years? How many of them were sired by Rover and which mothers (customer name)?

Frequent Explorer *

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

Is there a graphic somewhere that shows the hierarchy of levels for jobs/vendors/customers/classes/etc?

Moderator

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

Hello SleepyMorningGoldens,

 

Yes, we have an option in QuickBooks where we can change how the lists are displayed. Though, the Hierarchical view is only applicable for customers or jobs, classes, and accounts.

 

Here's how to do it for the customer list:

  1. Go to the Customer Center.
  2. Right-click on the customer or vendor names.
  3. Select Hierarchical View.
  4. Choose Yes to confirm the action.

You can also refer to the screenshots below for reference.

 

Feel free to add details if you need anything else.

Capture.JPG Capture 1.JPG Capture2.JPG

Frequent Explorer *

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

Thank you. Maybe that is the actual answer, but I was moreso thinking of a pictographic of how things 'could be' connected in quickbooks in a hierarchy chart for me to see what category has sub categories below them. Such as top level is a Job Name, and a level below that is a sub job, and below that is sub sub job. Something along the lines of:

President > VP > Sr. director > Director > Sr. Manager > Manager > contributor...

Hopefully that makes sense. I'm just trying to learn about what things correlate to one another and how they can interact in Quickbooks.

Moderator

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

Thanks for getting back, SleepyMorningGoldens. That's a great pointer.

 

Currently, we can only sort the lists by Name, Balance Total, and Attachments. I like the idea of being able to sort the list by name titles. You can share this to our Product Development Team. They'll put your suggestion into consideration for future product updates. 

  1. Click Help at the top menu and select Send Feedback Online.
  2. Choose Product Suggestion and enter the details.
  3. Click the Send Feedback button.

I appreciate you for sharing your thoughts about the product. This will help us know what improvements are needed to suit your business needs. Feel free to drop by again if you have other concerns.

Established Community Backer ***

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

@SleepyMorningGoldens 

 

You can see it in my attachment from a Construction firm.

Customer = Owner of the project

First Sublevel ("Add Job" using QB-ese) = Project

Third level (second sublevel) is used for Change Orders

 

And you see this in the Sample Files. Close your Company file, leaving QB open at the No Company Open screen. bottom right are Sample files. Use them to learn from.

Frequent Explorer *

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

This is fantastic!! I had to do a org chart to understand it. Have you done QuickBooks for breeding before?

 

I am not seeing customer type in my version online. Is that not available in 'Simple version'? I will be buying/using Quickbooks desktop Pro 2019 since I think I will be saving me money in the long run. 

 

So when I have a stud fee that I have to pay someone else, to get a new line introduced, is that a vendor?

 

Also, if I stud out my dog, then he is a Customer as well, like the female is, right?

 

I also read somewhere that I shouldn't be deducting costs from the dogs until they are breed. Is that true? If so, how do I get that to work in quickbooks, because it is all dated 2017/2018, and our litters are in 2019.

Frequent Explorer *

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

And if I have a general business expense/meal expense, then do I not select a customer when entering the receipt or do I make a new customer as My Business name or General Expenses or General Business, and assign it to that?

Established Community Backer ***

Re: Dog Breeding initial setup, Invoices, COGS vs Costs

First, don't Job Track something that is not direct and specific; you are making your Business Entries, already, as expense or whatever. There is no Customer Assigned to office supplies, for instance.

 

Next, what do you consider is a Business Meal? Are you getting proper guidance from your own CPA? Nearly everything about these rules changed with the Dec 2017 TCJA. Lots of people had this wrong all along, as well.

 

Example: Meals while out and about on business errands are Personal and always were personal. Meals on overnight trips for employees are 50% deductible; for a more than 2% shareholder, that is Taxable Fringe Benefit and runs through Payroll.