Accounting & Bookkeeping & Small Business Forum

[chuckp]

I own a small design agency and do all my own books using MS accounting. We have an internal project that we're doing and will go to market with it next year and start selling licenses to use the product. It's being done under my main company and we're using those funds, but I want to keep track of it seperately somehow. I don't want to make a whole new file in MS accounting b/c I can't use the funds from the main company then. so how do i do this?

I thought of creating a "job" and then just saying every cost for the new product is part of that job. Is that the best way, or is there a way to make a sub-division? We will likely eventually make it a sub division of our company or it's own company.

Just looking for advice how to record the costs for the next several months so that I can go back and keep track of everything that had to do with this new product development.

thanks.

[scotti445]

chuckp wrote: I own a small design agency and do all my own books using MS accounting. We have an internal project that we're doing and will go to market with it next year and start selling licenses to use the product. It's being done under my main company and we're using those funds, but I want to keep track of it seperately somehow. I don't want to make a whole new file in MS accounting b/c I can't use the funds from the main company then. so how do i do this?

I thought of creating a "job" and then just saying every cost for the new product is part of that job. Is that the best way, or is there a way to make a sub-division? We will likely eventually make it a sub division of our company or it's own company.

Just looking for advice how to record the costs for the next several months so that I can go back and keep track of everything that had to do with this new product development.

thanks.

well if you want to create a whole new company eventually you may aswell start the books for it now. You can create a new "job" and this would work well in teh short term, but eventually if this new project takes off you will need to migrate this data across.

You may not want to do this but i would create a new MS File for the new company. You are still able to use the funds from the old company to finance the new one. It is done through the use of loan accounts.

When you are setting up the accounts for the new company with the new MS file make sure to create a liability account called "[old company name] Loan Account". And in the old company create a new asset account called "[New company] Loan Account".

When you report at the end of the year you will have to consolidate these accounts. The only problem is making sure that you have all the transactions flowing right through the companies. (since you have two files and nothing will be automatic).

Example: Moving Funds from Old Bank to New Bank File

in OLD COMPANY FILE
DR New Company Loan Account (asset)
CR bank

in NEW COMPANY FILE
DR bank
CR Old Company Loan Account (liability)

This way you can charge interest on the loan for when the new company starts making profits.

Either way a "job" is less technical but for ease of consolidation the seperate file would see fit.