Quicken. (computer program) (Home Office) (evaluation)
by Peer L. Plaut

FOR PERSONAL ACCOUNTING, PORTFOLIO MANAGEMENT, OR KEEPING TRACK OF THE PROFITS AND EXPENSES OF A SMALL BUSINESS, QUICKEN DOES IT ALL

To be comprehensive, an accounting program must have several important features for personal, business, or investment use. Intuit has managed to bundle all of these necessary accounting modules into a single inexpensive software package - Quicken 4.0. Quicken allows you to change, review, or generate financial reports without leaving the program. With its pull-down menus and hot-key calculator, Quicken is a real time-saver. Practically anyone can set up the software and use it.

Because the checking and budgeting features are so well integrated, you can easily generate a report indicating whether your cash flow is in balance. If you show a surplus, you can easily setup an investment account and add it to your Quicken reports.

Here's an example of how the checking and budgeting modules work together: If you have budgeted $525 per month for rent and you pay it by check, the $525 will automatically be debited from your Quicken checking account. But you can also set up Quicken to generate various kinds of reports. You can generate a budget report to show that rent has been paid for the month. You can also generate reports at the end of the week, month, or year showing expenditures in a variety of categories. If, at the end of the year, you were unable to put any money into savings and the year-end report shows that you spent $5,000 for entertainment, you have suddenly found a place to cut back.

You can use Quicken to set up an account with Check Free (not affiliated with Quicken) and use its electronic bill-paying feature to save money on postage and per-check charges. (Some institutions may charge for electronic debits, however, so confirm this with your bank.) If you choose to print your checks, Quicken has special checks and window envelopes so you won't have to address each envelope by hand. (This feature can be quite expensive; consider whether paying nearly $60 for 250 envelopes and checks is worth the time saved.)

Quicken is packed with other timesaving features. For example, it can memorize transactions, so if you use Quicken checks, the address and amount are automatically filled in when you print your checks every month. Just slip the check into the Quicken envelope - no wrong addresses, incorrect payees, or account numbers.

Using Quicken to set up income and expense categories will help you find out where your money is going. You can set up broad categories such as taxable income and utilities while having subcategories like spouse's income, electricity, gas, and telephone. Quicken allows you to give your personal categories names you'll recognize and set up your business categories in accounting format. Once again, Quicken makes it easy for you to operate your personal and business affairs in the same software package, saving you time and money.

Another feature is split transactions. If you have six rental properties (six is the maximum number of splits per transaction) and your annual hazard insurance is due, then, using the split function, you can assign the appropriate amount of insurance premium to each property by using the ditto mark instead of retyping each category six times. Quicken will use the same category in all six split transactions.

Quicken can also handle credit card accounts, lines of credit, mortgages, investment properties, savings accounts, investment accounts, and tax reporting. The only requirement is that you initially set up the accounts with Quicken. You'll be prompted for the correct account-type information, allowing your new savings, investment, or tax accounts to be set up in no time. Quicken even asks you for your credit limit, so you can determine quickly how much available credit you have. This feature can be used on any type of revolving line of credit - just enter the account as a credit card account. For fixed-period liabilities such as mortgages or automobile loans, enter them as any ordinary liability.

Quicken can even remind you to pay your bills. Billminder, another of Quicken's features, can be installed in the AUTOEXEC.BAT file on your hard drive, so each time you turn on your computer, Quicken will search your financial information and alert you to bills that are due or nearing their due dates. This should help eliminate late charges. It's a good idea to set Billminder in advance of when your billsl are due - Check Free needs a couple of days to process the information, and the postal service needs a couple of days to deliver your check, if you decide to use first-class mail.

To make handling your finances even more effortless, reports can be generated that compile all the information you've entered into Quicken into a usable and understandable format. Generating reports using Quicken is so simple that anyone could do it. Quicken comes with a set of financial reports, and you can generate your own. For example, if you use Quicken for personal and business accounting, you may not want to include certain business assets and liabilities in your personal net-worth statement. Quicken will ask you which accounts are to be included in the report; then the software does all the dirty work - addition and subtraction - and lays the information out neatly on your screen or on paper.

Taxes. Everybody hates them, but Quicken can do many of your tax accounting chores for you, saving you time and headaches. Furthermore, your accountant will be impressed by the precise tax reports you send in at the end of the year. However, Quicken does not fill out tax returns. If you do your own tax returns, you may be able to export tax information stored on Quicken to the tax software program you currently use (Turbo Tax is compatible with Quicken). When using Quicken for tax reporting, simply set up categories for each type of transaction you expect to use (for example, medical expenses for personal use and payroll tax for business use). At the end of the year, you can print the reports and send them to your accountant, saving time and money.

Quicken's Investment Account management abilities are the icing on the cake. As with most other investment management software, Quicken handles many common types of transactions for stocks, bonds, mutual funds, long accounts, short accounts, margin accounts, and more.

Quicken's custom investment reports are a real asset, too. If you've had a security many years and want to find the annualized return of the investment for the past 15 years, Quicken allows you to get this information quickly and easily.

Quicken ha the ability to import ASCII file security price quotes, but I would prefer to be able to dial the quote vendor directly from the Quicken program. Using Quicken's method, stock options traders won't be able to enter option contract prices the way they're used to. I overcame this by entering the number of contracts traded and the total amount. Using this method, a three-eighths price contract shows as 37.50 per contract, which is its true worth.

If you're a bond buyer, you'll be happy to know that you can enter your prices they way you're accustomed to seeing them. Just enter the price of your latest bond purchase (such as 95.00, 85.00 100.00, or whatever purchase price your confirmation shows) and then enter the quantity of bonds you bought - say ten. Quicken will then automatically multiply the price by 100, giving you the final purchase price.

Quicken can also handle the reinvestment of dividends and interest on your securities - a definite advantage when you sell. By using Quicken to calculate the cost of your reinvested dividends, you won't have to spend hours poring over five years of mutual fund statements. This reinvestment feature can help you figure out your cost basis for five years of quarterly - or worse yet, monthly - reinvested mutual fund dividends. (This feature can also be used with reinvested stock dividends, but far more people reinvest mutual fund dividends.)

Mutual fund statements can be difficult to understand. As an investment broker, I discovered that many clients had been misreporting their mutual fund dividends to Uncle Sam's advantage. The latest mutual fund dividend-enhancement gimmick includes a return of capital along with the ordinary dividend. Quicken is there to handle this return of capital. For anyone who owns high-income funds, this will be a valuable tool for figuring out true returns at the end of the year.

Another of Quicken's advantages is its ability to integrate its investment modules with the net worth, income, budget, and tax reports. Many investors have their investment information in one software package and tax information in another. When they want a financial report, they must compile all the information by hand and enter it into a third software package. I have seen (and paid for) far more expensive portfolio-management software that does less than Quicken.

Quicken is like a lump of clay on a potter's wheel. It can be molded to fit just about any accounting project your individual needs dictate. The documentation is the key to Quicken's power. Although the software is designed for the computer illiterate, you must have some idea of the goal you wish to accomplish using the software. There are many useful examples in the text to get you started. When you use them, you'll easily grasp the documentation and get good ideas in the process. The bottom line: Quicken will help your bottom line.