Cash account not linked to investments: Is this accounting software? (Q Mac)

smuseby

The sale of an investment generates cash. With Quicken for Mac, with no link to the cash account, when entering the sale of an investment, the cash proceeds disappear.

Ever since the 13th century when the Italians invented double entry accounting, fundamental to all accounting is the system of double entry for all transactions, balancing credits with debits.

How can Quicken claim to be accounting software when its design includes one-sided entries - i.e., in this case, no debit offset to the sale credit?

Jon

Quicken does not do double entry bookkeeping. If that's what you're looking for, you need to look elsewhere.

Also, Quicken Mac doesn't currently support having a separate cash account associated with an investment account the way Quicken Windows does. When you sell an asset, the cash shows up in the investment account. The cash should not simply "disappear", if it does then your sale transaction is probably not entered correctly.

NotACPA

Well, actually, Q DOES do "double entry accounting". When you create a transaction, and properly input a category or "transfer account", Q will create the offsetting transaction automatically.

It just doesn't do "double data entry accounting".

Boatnmaniac

Quicken is a personal financial management software for tracking account balances/transactions, doing financial tracking/planning and budgeting (all of which is how Quicken promotes itself) and should be thought of in that way rather than as an accounting software. If you want or need a comprehensive/robust accounting software you might want to explore other softwares that will better meet that requirement. Most of those other softwares are more aligned with business applications where compliance with GAAP principles are necessary for both legal and tax purposes.

Chris_QPW

How can Quicken claim to be accounting software

I would like to see where Quicken Inc have ever called Quicken "accounting software".

I have never seen it. The word they always use is "finance". And usually "personal finance" at that.

Even Quicken Business geared mostly to Schedule C businesses.

The word difference makes a world of difference. Quicken "can do double book" if you realize that categories are in fact "books". But it doesn't enforce this practice, transactions don't have to have categories. What's more there is no audit trail, and there isn't anything stopping the user from changing anything they like. So, it certainly can't be used as a "strict accounting system".

But to the main point about linked cash accounts. There isn't any requirement for them in Quicken Mac like there is in Quicken Windows. This system wasn't put in for any "double book" purpose. Quicken mostly models off of the real world. Is I look at my brokerage account I won't find a double book system. Quicken is mirroring that system (as best it can).

The main reason linked checking accounts were created in Quicken Windows is because of a limitation in Quicken Windows to mirror what is going on the brokerage account. Quicken Windows investment registers weren't designed to handle banking like features, and that was the case for the brokerage accounts when it was created, but the brokerage accounts online can now do this. So, what they did is come up with the concept of a virtual checking account linked the investment account. Transactions really still downloaded into that investment account, and the "cash" transactions are pushed to the virtual/linked checking account. This isn't a double book system at all.

In the case of Quicken Mac the register was designed to be more flexible, and the banking transactions can be done in the same investment account. So, there is no need for a virtual linked checking account.

jacobs

The sale of an investment generates cash. With Quicken for Mac, with no link to the cash account, when entering the sale of an investment, the cash proceeds disappear.

The cash proceeds of a sale do not disappear; the cash shows up in the Cash component of that investment account. Click on Portfolio view to see Cash as the last item in your list of holdings for the account:

If the cash moves someplace else in the Real World, then you need to enter a transfer transaction to move the cash from the investment account where the sale was made to whatever other account it landed in.

smuseby

All this makes sense.

My problem arose from moving my my two data files from Windows to Mac, one of which is devoted to a charitable fund, and all entries are manual - there's no online data transfer for my account. The numbers transferred to the Mac made no sense. I called Quicken support, and the first 2 Mac reps (in hindsight) did not understand the limitation of the Mac version. On the third call, I spoke with a rep that works on both versions, and he explained that there is no linked cash account with the Mac version, and that I should use Parallels to capture the cash. Fortunately, I have a PC and don't need to fight with Parallels. (I was also confused by the fact that in my other Quicken file where I do have on-line investments data transfer, there is no problem with the cash balances).

On this forum, I now have a better understanding. After I have everything reconciled with no outstanding transactions, I'll try again to move the data from the Windows to the Mac versions, and with a cash transfer, I should be able to make it work.

Thank you for all the replies.

Chris_QPW

Yes, the conversion between Windows and Mac can cause problems in this area, just because the conversion doesn't do this right, not because there is anything wrong with either approach.

One thing that might be tried to get around a conversion error would be in Quicken Windows tell it to stop using the linked checking account. That will force it to put the cash transactions back into the investment account.

But be aware of the fact that even this doesn't work right all the time (which sort of shows that doing a conversion to Quicken Mac isn't a simple thing). Be sure to have a backup and to check the results.

If there are no problems in the Quicken Windows copy without the linked checking account, then the conversion over to Quicken Mac should be correct.