Web design an asset or an expense?

Dandylion1 · ‎February 18, 2023

We are a start-up and need clarification on accounting for the expenses associated with the design of our new web site. I understand the website itself is a fixed asset and is listed on the Balance Sheet. The payment made to the web designer shows up on the Cash Flow. But what about the P&L? Should the expense (payment made to web designer) appear there as well?

Kurt_M · ‎February 19, 2023

Great to have you here today, @Dandylion1. I'll share some details about what transactions show up in your Profit and loss reports inside QuickBooks Online (QBO).

Please know that all of your recorded income and expense transactions inside your company will appear in your Profit and loss reports. In case you're unsure what account to use when handling transactions inside QBO. You can reach out to your accountant. This way, they can give you detailed explanation on what accounts to use for specific transactions you're handling.

In case you don't have an accountant, I can help you get one. Feel free to visit this page to get a ProAdvisor that can help you handle your business: Find a QuickBooks ProAdvisor.

In addition, I've got you this article about modifying reports and adding extra details to it: Customize reports in QuickBooks Online.

You can also check this page to keep your current report settings: Memorize reports in QuickBooks Online.

I'll be more than happy to have you here again if you have any additional QuickBooks-related concerns, @@Dandylion1. Stay safe, and have a nice day!

Rainflurry · ‎February 20, 2023

@Dandylion1

When you record a cost as a fixed asset, it resides on the balance sheet and has no impact on your P&L. If it's recorded as an expense, it will impact your P&L. There is some uncertainty within the tax code as to the exact treatment of website design costs so the best way to record this, IMO, is to assign all of the costs (bills and/or payments) to a 'Website' fixed asset account and then allow your CPA/tax accountant to determine the appropriate classification and make any adjusting entries.

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Web design an asset or an expense?

Web design an asset or an expense?

Web design an asset or an expense?

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