QuickBooks For Investments

Many people do not know how to track investments in QuickBooks. If you are one of those people then this web cast is for you. When you think about purchasing stock and how to track it in QuickBooks you have to think in terms of what sort of transaction does this resemble? Well I am purchasing something in quantity, which I plan to sell later and hopefully at a higher price than what I paid for it. Doesn’t that sound a whole lot like inventory? Where my units are shares in the company, my customer is the bank where my trades are cleared, and the securities are “inventory parts” in my item list.

When you look at it this way and after you watch the web cast via the link below, you will see exactly how this works and exactly why QuickBooks has actually provided you with a GREAT platform for tracking and reporting on investments.

First we set up a Securities Account on the books. This is a bank account with 2 sub-accounts, Cash, and Securities.

Then we write a check from our regular checking to the cash account at the brokerage. When we record the trade you will see that we record a check from that cash. The item that we set up for the stock we purchase is mapped as shown to the Securities sub-account. This way when we record a check from the Cash account and use the item that is linked to the securities account the value will in effect be transferred to the securities account.

One of the pit falls of this is that your basis in any one stock will be average costed if you have more than one purchase of that stock before it is all sold. When you calculate profits / capital gains it is on a first in, first out basis. To accommodate this you can use a separate item for each purchase and append the symbol with a xxx-1, xxx-2 so that you know you have to use up the quantities of each in order and you can easily see this from either the “Securities” list or the report I set up. This is all illustrated in the web cast.


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