How do you include a portion of your P/L from your business as income in your personal budget?

thansen

I use Quicken for tracking (on and off for many years) and Excel SpreadSheets for budgeting and other more advanced things. The issue with Excel Spreadsheets is obviously that you (for the most part) have to keep them up-to-date manually. The issue with Quicken is that it may not do exactly what you want and/or the learning curve is steep. Now I'm trying to eliminate my Excel Spreadsheets to automate my workflow, get all my data in one place (Quicken DB) etc. Easier said than done!

I have a small rental business and I use Quicken to track income and expenses (this allows me to generate a schedule E like report that I send to my tax account). I also use the P/L statement from Quicken's rental property tab to keep an eye on the performance of my business throughout the year. And so on.

I have created a budget (in Quicken) for my rental business. It works fine.

Now I'm in the process of creating a personal budget that I do not want to pollute with all the rental income/expenses. It should be kept separate from the rental business budget. Every month I transfer an amount from my rental business checking account to my personal account (usually, a fix amount that is higher or lower than the actual profit for that particular month). This is sort of my salary from the rental business (or whatever you want to call it).

The budget feature allows you to include 'Transfer In' (from a particular account, the rental business checking acct in my case) as income but it doesn't really do the job. It is very rudimentary. It includes all 'Transfer In' into any account from my rental business checking account. And a lot of those transfers shouldn't be included as personal income. Unfortunately, I do need to include those other destination accounts in my personal budget for other reasons and thus I cannot just deselect those accounts which Quicken budget feature does allow you to do.

A category cannot be assigned to a transfer (the source/destination account is the category) so using category to report that income (more selective than just the transfer account) also isn't viable.

The budget feature (as far as I can tell) do look at tags. So doing some kind of filtering based on tags also isn't possible.

Then I tried to use the Paycheck feature (which can be used for an income row in your budget). But here you cannot specified a transfer account (the rental business checking account in my case) since a paycheck is really a deposit into your account (my person checking in this case). How do I 'marry' the transfer transaction (from my rental checking) with the paycheck transaction. This scheme also seems not to work.

How do I include a SPECIFIC transfer from one account to another account as income in your budget?

Don't tell me I have to go back / keep using Excel Spreadsheets for this kind of stuff!

Tom Young

"The budget feature allows you to include 'Transfer In' (from a particular account, the rental business checking acct in my case) as income but it doesn't really do the job. It is very rudimentary. It includes all 'Transfer In' into any account from my rental business checking account."

I got lost here.

I understand that you want your regular "paycheck" transfers from the rental checking Account to your personal checking Account shown as a form of "income" for your personal Income and Expenses reports and that certainly is doable.  (For many years I've excluded all activity in all retirement Accounts from our "personal" budget and I&E reports, except for contributions to these Accounts and distributions from these Accounts, which I've treated as "expenses" and "incomes", respectively.)

Specifically, I stumbled on "It includes all 'Transfer In' into any account from my rental business checking account."  Could you flesh this out with some specific (made up if necessary) examples of what you're talking about here?  When you say "any account" here are you referring to "personal" Accounts in your file, (I wouldn't think there would be any of those), or other business Accounts (e.g., a return of a security deposit against a business liability Account)?

Your problem may come down to the setup of "Transfers" under the "Advanced" tab.  Have you played around with those options to see if the reporting comes out right?

thansen

> @Tom Young said:
...
> I understand that you want your regular "paycheck" transfers from the rental checking Account to your personal checking Account shown as a form of "income" for your personal Income and Expenses reports…

Correct!


> Specifically, I stumbled on "It includes all 'Transfer In' into any account from my rental business checking account." Could you flesh this out with some specific (made up if necessary) examples of what you're talking about here?

Sure... the 'Transfer Out' / 'Transfer In' setting the budget feature offers only filters on the source or destination account... here are a few made up examples why this limited functionality doesn't work for me.

Let's say I have a business checking account, a business savings account and a personal checking account. The purpose of the business savings account is to get a bit of interest (personal income, ie. not really business related income - just trying to get the most out of it) and to deal with a lumpy business expense pattern.

Let's say I choose to report the 'paycheck' from my rental business in my personal budget as a 'Transfer In' transaction from my business checking account. Thus the transaction I want to 'tag' as personal income is the 'rental business checking -> personal checking' transfer. The budget feature settings you can choose under 'Transfer In' are the from accounts. You don't really specify the 'to account'. Let's say I have another transfer... this time from 'rental business checking -> business savings'. That's also a 'Transfer In' (this time into my business savings account) from my 'rental business checking' and thus it gets reported as income in my personal budget (but it is not personal income). Now you can say I could deselect the 'business savings account' to eliminate reporting of that last transaction but then interest collected from my 'business savings account' won't be reported in my personal budget as interest which I really want.


> Your problem may come down to the setup of "Transfers" under the "Advanced" tab. Have you played around with those options to see if the reporting comes out right?

I'm using the windows version of Quicken Rental Business R40.13. I don't really see any "Advanced" tab. I can select categories (incl. 'Transfer In from <account>' and 'Transfer Out to <account>' and the actual accounts to look at for budget purposes. Also, there is a 'Budget Preference...' pop up menu - is that what you are referring to?

Bob_L

If you are willing to use budget reports rather than the graphic display to monitor activity, then you can use tags to filter in or out the transfers you don't want.  I believe that would mean including your business savings account in the personal budget but only including its category of "business interest" that you want. Then tag the specific "from transfers" you want included as income as "personal budget" to get them to show up.  I may have your account/transactions messed up but the point overall is to try using budget reports plus tags on transactions.  Will that work?

Tom Young

OK, I was working from the "reporting" end of the stick since I don't use the budgeting feature - in my opinion Quicken messed it up several years ago - but I believe that anything that you do in a "report" you could also do in a "budget."  (Going back to my previous comment about only including transfers to/from retirement Accounts in my personal budget, when I was using Quicken's budgeting feature, this worked just fine from the "budgeting" standpoint, too.)

I set up a Test file with 3 Accounts in it, two checking Accounts and one savings Account.  The Account titled simply "Checking" I (mentally) designated as my personal Account and the Account titled "Checking 2" I (mentally) designated as my business Account.  The Savings Account I also considered to be a business Account, similar to your example.

In the Checking 2 (business) Account I transferred $2,000 to the Checking Account (the "paycheck") and transferred $1,000 to Savings.  In the Checking Account I recorded interest income of $150.00My "personal" Income and Expense report for the period looked like:

which is the outcome you want.  To get there the customization was:

1. Only Checking selected under the Accounts tab
2. Checking 2 was selected under the Category tab
3. "Exclude self-transfers" was selected under the Advanced tab.

I could do the exact same thing in the Budgeting process resulting in a Budget report that showed:

Setting up the Budget properly isn't the end of things.  You then have to customize the Budget report in the same fashion.

thansen

> @Bob_L said:
> If you are willing to use budget reports rather than the graphic display to monitor activity, then you can use tags to filter in or out the transfers you don't want.  I believe that would mean including your business savings account in the personal budget but only including its category of "business interest" that you want. Then tag the specific "from transfers" you want included as income as "personal budget" to get them to show up.  I may have your account/transactions messed up but the point overall is to try using budget reports plus tags on transactions.  Will that work?

Ah... budget reports... I tried that and, yes, if you tag transactions appropriately then you can achieve what I like to do. Thank you!!!

thansen

> @Tom Young said:
> OK, I was working from the "reporting"...

I think this example is a bit different than what I want. I want to see the interest from my business checking & savings as personal income... I believe in your example the interest is coming from the personal checking account?