accounting question--need help

[twinsfan48]

Guys,
I track all of my purchases and sales but up to this point haven't been using a seperate checking account. I now have set up my own checking account and will be using it for all of my sports cards debits and credits.

However, I'm having a tough time relating my transactions to my bank account. For example, let's say I start my new account with a deposit from my personal account for $100.

Well, if I've made several purchases and haven't sold them yet prior to opening my seperate acct, I'll show myself being in the whole in regards to my transactions.

This doesn't match up to what my bank account shows...so how do I relate the two so they match up better??

There's different programs out there for doing this, but nonetheless I need help figuring out how to do it.

Thanks in advance! All replies are welcome!

[thepavshow]

If you put $100 in and purchased cards, you are correct, you are in the hole at this point. You will stay there until you sell the cards for more money.

If you want to know where you stand, just take your bank balance (ex: $80) and subtract the initial $100. Now your balance is -$20 which is your true balance..

[sivjosh]

Your $100 in checking is just operating cash. It's an asset of your "company," but not really related to an income statement where you record sales and expenses.

[NYDevilsFan]

If memory serves me correctly... Your cash is your initial "asset" which is your investment in the "company". When you buy cards you convert the cash asset to inventory asset. You should keep track of the cost value of your inventory assets. In the future when you sell that card you reduce the inventory by the original cost of the card and you increase your "cost of goods sold" by that amount. You also increase your cash asset by the amount you sold the card for and your sales account for the amount you sold the card for. The difference between the sales account and your cost of goods sold is your net income.

Hope this helps a little.

[twinsfan48]

It does guys...thanks for the replies.

I don't have seperate accounts, i.e. my cash account, operating account, etc.

I just have a transactions table (basically like a spreadsheet in excel) that shows every transaction I make from cards bought, cards sold, business cards purchased, paypal fees, shipping fees, etc.

I was tracking all of this for the past year and just using my personal funds...now I have set up a seperate account which I will invest some money into from my personal account to get started.

Like I was saying though, my checking account will not match my transactions table (my expenses subtracted from sales) because I've had a few too many expenses so I'm in the hole at this point in my ACTUAL TRACKING of my sports cards business.

However, my checking acct shows only the $100 investment deposit from personal.

SivJosh) I like what you said...is it not really necessary to tie my checking into my transactions. I have no idea how I'd be able to match those two up.

As of now, I just figure if I record everything (expenses and income from sales) that will show me where exactly I'm at. Depending on how well I do, I'd just deposit my earnings and profit into the checking account to use as I wish or invest back into my business right???

Appreciate the replies...please share your advice with me!

Thanks,
Brady

[sivjosh]

Yeah, I think you should not worry about making your transactions record match the bank statement.

Aside from that, my main advice is to not let your accounting get in the way of running the business (buying/selling cards). I'm not saying don't do it, but don't let it eat up too much time and effort.

Since you are the sole "shareholder," you'll get to make the decision about either paying yourself a "dividend" with the profits, or reinvesting it to grow your operation. Or maybe a little of each.

[twinsfan48]

really appreciate your thoughts sivjosh...thanks!

I do want to know how I am doing as a business...losing money? making money? That is why I record all my transactions in my Access database. I see what you're saying though...instead of trying to make it match up, my seperate bank account that I set up will just be where the funds are held or deposited into until I decide what I want to do with them.

As long as I record everything, I should be able to figure out the rest. Main reason why I set up the seperate account was not to get the funds mixed in with personal.

Anybody else got anything to add?

[jdawg]

simple answer...hire an accountant..mine charges 200 a month for 2 businesses

[norberjr]

Twinsfan- I operate my own tax and bookkeeping business. Send me a pm so that we can chat. The answer that you are looking for is pretty easy.

[twinsfan48]

jdawg) appreciate the reply but really not doing enough to justify paying an accountant at this time.