Quicken & Other Budget/Accounting Software/Adding rental equipment

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Question
Hello,

I used to entering new product into quick books but, I'm adding a bicycle rental to my business. The products consist of bicycles, helmets, locks and baskets.

The bicycles and helmets will have a rental charge but the locks and baskets will be included.

So, I was unsure if the products listed would be inventory parts and how to account for the depreciation of the bicycles.

Thank you!

Answer
Hi Ben,

Quickbooks DOES NOT not do a good job of tracking rental items.

You should NOT use an inventory item as it will play havoc with your
gross margin.

You should NOT use a fixed asset item (list menu > fixed asset)as the
income when used on an invoice will NOT post to the income section of the profit and loss.

I suggest you set up a non-inventory item for each bike you rent, assigning an ID number to the bike using that ID number as part of the item name.
When you setup the item, check the box (this item is used in assemblies.......)
that will open up a 2 sided item. On the left side you could select a fixed asset type of account call "bikes purchased for rental" and on the right side select an income account called "rental income"

When you purchase a bike,  use the item tab and enter a new item including your ID number assigned to the bike.

When you rent that bike, select the specific bike that will be rented.

You will need to do a Journal entry to remove the bike from the fixed asset account when the bike is no longer rentable.

Set up the helmut as a non-inventory item as well called "helmuts for bike rentals".  I would not bother to track the purchase using an item as the shelf life is only about a year or so. You can if you would like, make it a 2 sided item as well and select an account to expense the helmut  when you purchase it.   Be sure you set up different helmut items for tracking the purchase of helmuts inventoried and resold as new as part of your stock.

Ditto on the bike locks.

You can add the noninventory item helmut and lock to any rental invoice and leave the sales price at zero so that you can track that the item was indeed taken with the rental.

You can include with your waiver that you get signed by the customer the surcharge for not returning a helmut or lock.


Depreciation will be handled by your tax preparer or at year end , when you prepare your return enter the assets into your tax software, get a depreciation total, then make a JE in QuickBooks.


Hope this helps,

Linda Saltz, CPA
Advanced Certified QB advisor
Http://www.qbalance.com

We sell and support QuickBooks Enterprise.
http://www.qbalance.com/enterprise_quickbooks.htm.  

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Linda Saltz, CPA, QBalance.com

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QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com

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Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
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