Hi @jendylee could you provide a few more details so that I can answer your question more thoroughly? Which types of expenses and which report are you referring to? Keep in mind that the forum is public, so I'd recommend not including any personal or identifying information in your responses.
I did start my buisiness. Im a electrician.
Bookkeeping is new for me and i hoped Wave could make it more easy for me but im having dome difficultys with the following:
-when i scan a recipe for materials that i bought cash why it doesn't show up in the reports.
i also cant find a category materials when i scan a receipt.
I also bought a lot off machinery new to start the business. I scanned the receipt but it doesn't show up as investment.
You see its not clear to me how to start.
Maybe somebody can point me out somewhere in this community to help me out?
Sebastiaan,
Sometimes it's best to start off simple rather than adding layers to the bookkeeping process such as receipts. Rather than trying to match items up I would set up the chart of accounts with what is appropriate for an electrician. Next connect your bank and credit cards that you use for business. Use banking and credit card transactions to do the actual bookkeeping but keep your receipts. Scan and save them somewhere if you want to be digital. To get equipment on the books that you have purchased to start the business you would do a journal entry. You would debit equipment (asset) and credit owners equity at cost, if new.
Mike G, CPA
www.mgfinancial.net
Affordable Solutions For
Your Small Business
I have a question related to this. After reading some forums on here I created an asset account for equipment purchased for business use. Ive been labeling imported expenses that fall under this category as such. Recently I made two larger purchases, one of a laptop and one of a drone. The laptop is it's own can of worms I will figure out but in regards to the second purchase...
Its not showing up in a profit loss report as any kind of expense. I figure I'm not understanding asset accounts correctly but I'm hoping that these larger purchases act as expenses for tax time. So I'm trying to figure out what I'm doing wrong or what it is I don't quite understand.
Sure, an asset is shown on the balance sheet of the business. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales. Typically, purchases of equipment, furniture etc have this characteristic and a useful life of greater than 1 year. Hence why they are not an expense but classified as an asset on the balance sheet. Because these types of assets have a limited life, the concept of depreciation comes in to play. The business will annually expense a portion of the cost of an asset that has a limited life such as a computer. There are varying rules for tax purposes that allow for the complete expensing of a purchase. I'll give you a quick example. I buy a laptop for 1500 for my business. I classify it in Wave under Computer Equipment. An account I created under Property Plant and Equipment in the chart of accounts. I also create an account called Accumulated Depreciation under the asset section called Depreciation and Amortization. Next, I categorize my purchase on the transaction journal to Computer Equipment. Now I have the choice for tax purposes to depreciate the Computer Equipment. If I opt to expense the purchase because I meet the requirements, I would create a journal entry. I would debit Depreciation Expense and Credit Accumulated Depreciation.
jendylee
Member Posts: 1
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Hi @jendylee could you provide a few more details so that I can answer your question more thoroughly? Which types of expenses and which report are you referring to? Keep in mind that the forum is public, so I'd recommend not including any personal or identifying information in your responses.
Hi,
I did start my buisiness. Im a electrician.
Bookkeeping is new for me and i hoped Wave could make it more easy for me but im having dome difficultys with the following:
-when i scan a recipe for materials that i bought cash why it doesn't show up in the reports.
i also cant find a category materials when i scan a receipt.
I also bought a lot off machinery new to start the business. I scanned the receipt but it doesn't show up as investment.
You see its not clear to me how to start.
Maybe somebody can point me out somewhere in this community to help me out?
Thank you all.
Sebastiaan
Sebastiaan,
Sometimes it's best to start off simple rather than adding layers to the bookkeeping process such as receipts. Rather than trying to match items up I would set up the chart of accounts with what is appropriate for an electrician. Next connect your bank and credit cards that you use for business. Use banking and credit card transactions to do the actual bookkeeping but keep your receipts. Scan and save them somewhere if you want to be digital. To get equipment on the books that you have purchased to start the business you would do a journal entry. You would debit equipment (asset) and credit owners equity at cost, if new.
Mike G, CPA
www.mgfinancial.net
Affordable Solutions For
Your Small Business
Mike G,
I have a question related to this. After reading some forums on here I created an asset account for equipment purchased for business use. Ive been labeling imported expenses that fall under this category as such. Recently I made two larger purchases, one of a laptop and one of a drone. The laptop is it's own can of worms I will figure out but in regards to the second purchase...
Its not showing up in a profit loss report as any kind of expense. I figure I'm not understanding asset accounts correctly but I'm hoping that these larger purchases act as expenses for tax time. So I'm trying to figure out what I'm doing wrong or what it is I don't quite understand.
Any help clearing that up appreciated.
Sure, an asset is shown on the balance sheet of the business. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales. Typically, purchases of equipment, furniture etc have this characteristic and a useful life of greater than 1 year. Hence why they are not an expense but classified as an asset on the balance sheet. Because these types of assets have a limited life, the concept of depreciation comes in to play. The business will annually expense a portion of the cost of an asset that has a limited life such as a computer. There are varying rules for tax purposes that allow for the complete expensing of a purchase. I'll give you a quick example. I buy a laptop for 1500 for my business. I classify it in Wave under Computer Equipment. An account I created under Property Plant and Equipment in the chart of accounts. I also create an account called Accumulated Depreciation under the asset section called Depreciation and Amortization. Next, I categorize my purchase on the transaction journal to Computer Equipment. Now I have the choice for tax purposes to depreciate the Computer Equipment. If I opt to expense the purchase because I meet the requirements, I would create a journal entry. I would debit Depreciation Expense and Credit Accumulated Depreciation.