Comments apply to Quicken 2000 Deluxe for Macintosh (9.0.0 R2) and assume some familiarity with the program.
Since I pursue two free-lance businesses and receive income from a number of different clients, I wanted to set up Quicken to track payments received by business and client. I wanted reports showing total income for:
Quicken provides four types of "labels" that you can define and assign to transactions to track and organize income and expense transactions: categories, subcategories, classes, and subclasses. The organization of your labeling system determines the kind of reports you can generate and the amount of detail your reports will contain. It's important to base your labeling decisions on the kind of reports you want so you don't over- or under-classify. (There's really no reason to label transactions at all if you aren't going to generate reports.) The task was to decide what mix of categories and classes would provide a simple yet flexible system.
Perhaps the simplest arrangement would be to create one income category for each client. For tax reporting, each income category is assigned to either Form 1040 or Schedule C, depending on whether I receive a W-2 or a 1099-MISC. With this arrangement, reporting on a single client is easy, but there is no way to report on total income from just one of the businesses save by selecting every client individually (using the "Content" tab in the "Customize Report" dialog). Another problem arises when both businesses provide services to the same client; there is no way to split up income for the two businesses once they are assigned to a single income category.
If categories alone don't cut it, then maybe adding subcategories to the design would provide the desired reporting flexibility. Instead of creating an income category for each client, create one for each business. Then add each client as a subcategory under the main business category. Those clients who buy services from both businesses will have to be added under both main categories, but this is an unusual situation so it is no hardship.
You can still report on a single client easily, except for those few clients in both main categories. Hmm... that's messy. Even so, this is much better. Now I can categorize all my transactions by both business and client. Now it should be easy to report on total income from either business, right? Wrong! If you select one main category (representing one of the businesses), your report won't show any transactions! The reason is that none of the transactions were entered under just the main business category; all were subcategorized by client as well. If you want to report total income for one of the businesses, you'll need to select each and every client under the main business category. This system is barely better than using main categories alone. What to do?
The solution is to add classes to the mix. Use the same two main business categories, but create a class for each client. Then you can assign each transaction to both a business (the category) and a client (the class). Now you can report on total income from a business simply by selecting one category. The report will include all the transactions from all clients. To report on a single client, select that client's class; transactions from both businesses will show up. Another advantage to using classes is that you can use them to track expenses as well.
Posted: February 16, 2000
Last Updated: February 16, 2000