I apologize for the long message, but hopefully others in this business have the same questions and concerns!

First I want to say this is a wonderful forum and people on here are very helpful (with their prompt and excellent responses to the questions!)! QB is a pretty sophisticted program, and getting it work the right way is not trivial! Though it is almost trivial to just start using it without taking advantage of its power and capabilities! So any help in getting it right is very much appreciated!

We want to start using QB beginning of the year (less than two weeks!). We have a chicken and egg problem; because we are using "Shoe box accounting" we don't have the right information to get started on QB, and because we can not get started on QB we continue to use shoe box accounting! :-( We have been in this dilemma for the last 6 months!

So I would like to take a dive and start using QB starting Jan 1 whether we are ready or not! The question I have is, what are some of the things in a Gas Station/Convenience Store business that we *must* get right as we start, and any wrong choices made can not be easily corrected?

For example, one of the recommendations I saw in a book is that we need to get a "Trial Balance" (sorry, I am not an accountant, so I am not exactly sure how to do it, and I don't think I will be able to do this before the end of the year!). In this business we can not "pause" to get a trial balance, and especially so because we are using "Shoe box accounting". We have set a huge ship in motion, and we don't know where we are headed, and we don't have the time to unfold the map!! (I know, we should have opened the map and charted a course before starting to set sail ... :-(

So I am thinking that if we start doing things in QB starting Jan 1, we will not likley have a trial balance, but hopefully we can do adjustments once we have the year end accounting done (with an accountant, of course) for tax purposes.

Q. So can we get started without a "Trial Balance" and make adjustments later?

I think I have gone through documentation, and given it some thought, but not actually having done it, I am not sure if I am thinking along the right lines!

Briefly this is what I am considering:

Will use "Classes" feature to track expenses for our two stores plus a common (we will call it "Head Office") class. We do have separate bank accounts, but I amassuming that that should not be a problem since both are under the same PA S corp.

We will be entering "Daily Sales Summary" for the store sales so we will *not* use the inventory feature. (Thanks for the earlier advice in this forum on this topic!)

We will have payments in Cash, Credit, Charge. We will also have Mfg Coupons and vendor coupons (for cigarettes, for example).

We will use "Holding Account" (of AR type, as "Other Assets"?) for our "Credit Card" funds. Once the clearing house sends us a statement indicating what their fees are and what will be the deposit (along with a deposit date), we "Deposit Funds" from this holding account into the appropriate bank account (The credit card remittances are done by EFTs). And when we do the "Bank reconciliation" we will be able to check if we have received all the payments that are due. This way we balance the "Holding Account"

Q: What do we do if there is a discrepancy? That is, we expect $5,000 of Credit Card sales based on our sales registers, and they say they have only received invoices (this happens automatically by the cash register once a day) for $4,500, and with a fee of $100, they will deposit $4,400 in to the bank. How do we keep track of the missing amount ($500 in this example) so that we can ask them for the difference, and in some cases it may not be possible to resolve it too. What is the best way to deal with this difference?

We will have payments to vendors both out of the cash registers, and also as bills. The cash register shows these payments as "Paid-outs", and I assume we put them into "Product Cost", a COGS type account, and we enter this when do the "Daily Sales Summary". Those vendors that we don't do "Paid-out" on, we would enter a bill and assign it to the same "Product Cost" account. Later on we will use "Pay bills' feature to pay the unpaid bills.

Q: Again, what do we if there is a discrepancy that can not be resolved? We think we owe them $1000, and they think we owe them $1200? I guess if it can not be resolved, then $1200 is the "cost!"

We will have huge fuel bills everytime there is a fuel delivery where they send a "Gas Invoice" where they indicate the date of withdrawal and the amount of withdrawal. I assume we enter these in the "Cost of Fuel" an "AP" type of COGS account? Then on the day the EFT happns, we do "Pay bills" and make a payment from our checking account to the "Cost of Fuel" account.

We are planning to sign up for "Standard" payroll service so that we simply enter hours for each employee (split into "Reg" "OT" "Night Pay" "Holiday Pay" "Christmas Pay") "Payroll Items". Then for each week for each employee we enter the appropriate hours. Hopefully it will assign the the right taxes to the tax accounts and print a check for the employee!

Sorry asking such a detailed question, but I don't want to miss the Jan 1 deadline for using this, so I am putting in what ever issues I can think of! Hopefully this will be a useful summary for others in the Gas Station Business!

In the next few days I plan to create a "Trial Corp" and enter fictious data to see how it all works! So I have my work cut out for the holidays! There may be more questions once I try out a few of these things, and I hope not to post such a long message next time!

Thank you very much for advice and guidance you can provide!

Wish You All A Very Wonderful Holiday Season!

--Raghu

Raghu, I appreciate your position but the answers you need here cannot be done with a quick response. You have too many issues. You need to actually have someone that knows what they are doing set this up and get you started.
To answer the first question, Yes, you can start and then go back later and enter the beginning balances in most cases. And another thing you need to know, when you post in here, you must tell us what version of QuickBooks you are using. They are all different. We also cannot advise without knowing what kind of taxable entity your company is. The books are kept differently for a sole proprietorship as opposed to an S corporation or a regular corporation.

Joey,

Sorry about that ... I forgot to include that information. We have QB Premier 2004 Retail Edition. And our Corp is set up as Pennsylvania S-Corporation.

My main concern is that I want to get started on Jan 1st. I will have the required beginning balances only after we have our Taxes done. I have a feeling even after it is done, there will likely be some unpaid bills (or bills that have been double paid too!). So I hope we can get started and try to balance it later.

The rest of the details were to get a general idea if I was on the right track. I have a feeling this will always be a "work-in-progress" where we gradually learn more as we get familiar and find better ways of using the program.

Of course my consolation is no matter how badly we set it up, it will still be better than what we have now! :-)

Thanks again!

--Raghu

WOW!!!!!

I have a client doing what you are doing with six or seven stores, a lube, and a laundry. I talked to them last week, all is well (they have an intelligent daughter-in-law). Point being: it can be done.

You have demonstrated you have an idea as to what is going on. When you spoke of setting up a holding accounting for credit cards, that said quite a bit.

The big question is "what is your accounting system (accural or cash). You indicate the possibility of both. This is important (at least for me) to know.

The problem with the "paid-outs" is the tracking of the money back to the vendor as proof and directing it to the proper expense account. The possibility would be to track it by creating bank accounts for the cash drawers at each location, do the daily sales receipts and deposit those into the drawer at the bottom of the form. Then, transfer to undeposited funds (remember, I do not know your banking procedures). Then you could do the mass deposit. Then with the paid-outs, you could enter directly into the register the vendor and then direct the other side of the transaction to the appropriate expense account (COGS?).

The credit cards, tracking will be essential. Can you get a summary print out from the machines for each days transactions and match to the direct deposit by the card company.

Devil's Advocate; have you considered gas volume fluxuation and drive-offs? You have the billing and payment to the gas supplier figured out.

Corpal tunnel has sent in. Need to rest the arms. If you have more questions, post. Maybe consider finding a Certified ProAdvisor near you to help you out; it will be worth the investment.

You are right, this is a wonderful forum. This is a great place to learn more. We are blessed to have individuals like Joey and Jo here.

Good luck and keep posting.

Paul Falada
Certified ProAdvisor
Certified POS ProAdvisor

Paul,

Thank you for your response!

I will try to answer as many questions as I can, but please keep in mind that I have not yet entered even a single transaction into QB! Everything I say is only based on theory, excellent material from the discussions here and the QB help files. So it is very much possible that some of my concepts may be wrong.

The accounting system we will be using is "Accrual" method.

For the "Paidouts", as far as QB is concerned, we *only* need to know the amount, and not so much about the details about the vendor to whom it is paid. The reason for this is that as part of the Franchise Agreement, we need to keep track of this anyway and we are using a different program for this. Now this may seem crazy (using two different programs), but from a data entry perspective, a lot of the data entry for products received is done by the managers at the store, and it has a very simple interface, it provides a complete breakdown of all the merchandize ordered and whether it was "Paid-out" or to be paid later. Now the only thing we need to match is that the paid-out amount from that program over a period of specified time has to be the same as what is shown as "Paid-out" item in QB. Hope this is reasonable and makes sense! We don't want to track too much vendor detail in QB. In QB we will have a few vendors (only those who bill us later, and these are only a few) for whom we need to track when the bills are due etc.

So what I was thinking was "Paid-out" will be expense account, and I want to be able to compare and check with the paid-out as reported by the other program. By the way, all paid outs are for products, so "Paid-Outs" would be a COGS type of expense account.

As you said, the biggest problem is tracking Credit Card remittances. That is where we are spending a signficant amount of time now. Everyday, we get a report (Z-Report) which has "BankCards" and "ChargeAccounts" from our sales register. I plan to have these as "Payment Items" that transfer into two different holding accounts (AR type) when I enter the "Daily Sales" as summarized sales. Usually the next day, we get a FAX. The FAX has the information on what they see as the amount of "Credit Card" transactions, and "Charge Transaction" (usually the same as what we see in the report mentioned just a moment ago), and a "Credit Card Processing Fee" and the amount to be EFTed to our account. This is where I am hoping I can go the appropriate holding account and "Deposit" items from these holding accounts into the bank. Obviously the amount deposited will not be what is in the holding account (because that does not have the fees deducted), so I deposit the EFT amount indicated in the FAX to the bank account, the "Credit Card Charges" to a "CCP Expense" account (not sure what to do about the discrepance between what we think were the sales and they said were the sales according to the FAX). Does this sound reasonable?

About the "Gas volume Fluctuations", that question was answered in these very bulletin boards in the "Inventory" section! Again instead of doing inventory in QB (we don't have scanners, so we can only do "summarized sales", and as part of the Franchise Agreement we need to track what is called "Retail Inventory" which is the "Retail Cost" of all the products in the store for each day), we figure out how much inventory has changed over the accounting period outside of QB (say every month) and make general ledger adjustment to add this to the COGS (may be positive or negative)! Again, not being an accountant, that adivce for doing the correct way without messing up credits/debits was very helpful! (I will never understand Credit/Debit!!)

Paying Gas Invoices is another big issue. We get an invoice on the day of the delivery for the amount and the date on which our account will debited (or is it credited? Anyway, amount is removed from our account :-). I plan to enter it as a "Bill". Then on the day the EFT is supposed to occur, I "Pay Bill" in QB so that it is removed from my AP with the amount from my checking account.

About your carpal tunnel problem, I sympathasize with you. After having worked on the computers for over 15 years, I have the same problem, and sometimes it is very debilitating. The only problem is, working on computers is my livelyhood ...

I plan to work on entering fictitious data for a fictitious company in the next couple of days, and I am sure I will have more questions. Hopefully we will be ready to do real data entry starting Jan 1!

Sorry about the long message! There are two main reasons for posting such detailed messages. One is so that I can get some feedback (which has already happend, and I very much appreciate the help), and the ohter is I am assuming with so many gas station businesses around, I am sure many others face the same issues and am hoping it will be beneifcial to others too. Actually I have a feeling these may have already been addressed, but in my check through the archives I did not find them. That is why I started with a subject line that makes it obvious if someone is looking for this information.

But it is important to keep in mind that everything I am saying here are not "solutions" but just what I think is the way to go about it. And if the experts can comment and make suggestions it will benefit a number of people!

Thank again.

And Wish You All A Very Happy Holiday Season and A Happy New Year!

--Raghu