I'm considering combining my 2 small business & personal budget in to 1 budget

I would love feedback from Todd  Emily  or Jen  and anyone else who is struggling with juggling multiple budgets as to whether or not you think it is a good idea to combine my 2 business  and 1 personal budgets in to one budget.  

 

I already keep separate books for the purpose of book keeping in Quickbooks and Quicken.

 

The objective is to simplify the budgeting in to one place where I can track all income and expense and have a single place to view our net worth.   I'm pretty good at keeping personal spending separate, but my husband isn't and I think knowing how much we have in all accounts, and how much is being spent in each category across all accounts is useful.

Can you think of any reason why this is a bad idea?

 

Thanks!  Marilynn

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 3 yrs ago
    • Reported - view

    If you are really running a business and are serious about it, then you are keeping things sequestered by having separate business banking accounts. When you have a budget in YNAB, all dollars within all accounts in the budget are fungible, which means any dollar can be used for any purpose. The thing is, that's not the case when you are mixing personal and business accounts in your budget.

    Keep them separate.

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  • Hi Nolesrule, thanks so much for your response.  I'm not sure if you noticed that I don't do my official book keeping in YNAB.  I do that in Quicken and Quickbooks, so that is where I'm doing my serious business stuff.

     

    I use YNAB for business, more to budget the money coming in.  I use the money jars system, so I use a calculator that I created to split up my income by % to each financial "jar".  I can easily run reports to separate business and personal income for the purpose of budgeting it.

    I'm still tossing the idea around, but it would be really nice to have my whole net worth in one place.

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • 2
      • Reported - view

      Marilynn Taylor I use Quickbooks too. I just don't see the value in keeping my business in my personal YNAB budget because I don't want them mixing. It clouds the funds from each because they are not fungible.

       

      If you want to see the total net worth including your businesses, I suggest you create a tracking account in your personal budget for each business and update it with the net worth from your business budgets at the end of each month. A quick reconciliation adjustment will do the math for you (that's how I keep my retirement accounts updated).

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      • Lars A
      • Online Marketing Consultant
      • lars_a
      • 2 yrs ago
      • Reported - view

      nolesrule  I have a separate budget for my small business (LLC-partnership) in YNAB which has been working for us for more than a year, although, I have been using YNAB4 since 2014 for personal and nYNAB currently. I am considering looking into QBO for the business but I am wondering if it's worth it when my LLC has a very small capital or monthly income (no inventory, service based). I tried QBO Self employed last year and spent hours setting it up, only to realize it doesn't have the budgeting page to allocate all monthly operating expense, so I ditched it and stuck with YNAB.

       

      do you think QBO would be better for my LLC's situation and how do you budget through accrual basis coming form a YNAB mindset?

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      • KD603NH
      • KD603NH
      • 2 yrs ago
      • Reported - view

      Lars A I find YNAB inherently accrual based. If I write a check, YNAB considers it spent on the day I write it, not the day it's cashed. For accruing income, create a separate On Budget account called AR and enter the invoice amount as a transaction. Then, budget that amount to an "AR" category so it isn't spendable in your budget. When the payment comes in, do a transfer from your AR account to your actual account and WAM the money to TBB. Follow as normal from there.

      I don't think QB is necessary for service businesses at all UNLESS you have a lot of depreciable assets, and even then it's pretty easy to track those outside YNAB.

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  • That's actually a great idea about the net worth.  Hmmm.  I do still want to see all of my budget balances in one place and creating separate categories for the businesses should keep them separate.  I am maintaining YNAB4 budgets separately, but I may experiment with all in one budgeting with the online version.  You have great advice!  Thanks so much!

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      • Sabrina G.
      • Hot_Pink_Lobster.3
      • 2 yrs ago
      • Reported - view

      Marilynn Taylor I'm curious what you decided to do and how it's working? I was thinking of doing the same thing for the same reasons. Thanks!

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    • Sabrina G. Hi!  I ended up putting all business accounts (banking, liabilities, credit cards, etc.)  all in the one YNAB account.  Since I don't use YNAB for book keeping purposes and I only use it for tracking budget, it is working out great!  I love having everything in one spot so that I can quickly see my actual net worth.  I have a separate Quickbooks account for each business and Quicken for personal book keeping, and that is where I generate reports for tax prep.

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      • Sabrina G.
      • Hot_Pink_Lobster.3
      • 2 yrs ago
      • Reported - view

      Marilynn Taylor thank you so much for replying!!! I think I will do the same, except my concern is that I don't use Quicken for either personal or biz. My biz is a one-person LLC, doing investment properties, and I keep track of everything on a spreadsheet that both my investment partners and I can access. Then, I also enter everything into YNAB for each property (under an Assets category). I am hoping that, since it's essentially a sole-proprietorship, this will be enough for bookkeeping. If you think this might be a problem, lmk and I'm open to suggestions. Happy Thanksgiving!

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    • Sabrina G. Hi!  I'm happy to help.  I would highly recommend that if you have an LLC, even a single member LLC, that you have a Quickbooks file.  In the case of an audit, the IRS will look to make sure that you are acting like a business, which includes annual minutes & board member meetings (you, you and you, lol....basically that you're corporate binder is kept updated annually), plus a legit set of books.  YNAB won't cut it in this case.  It works for me to combine personal and business in YNAB because I strictly use it for budgeting purposes.  I keep a Quickbooks file for proper book keeping purposes as a corporation.  

      If you need something your partner can access you may want to consider Quickbooks online.  I believe it's about $15 a month.  I hope that helps!

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  • There isn't a need for a quickbooks program for an "official" set of books in case of audit. The IRS will work off of what you have - even if it is hand written. YNAB files can be exported to show registers and a p & l, etc. The only reason you would need a more robust software is if you have a lot of depreciable equipment, do a ton of journal entries or needed REALLY detailed inventory tracking. (Simple inventory tracking can be done in YNAB). Many small businesses can work amazingly well within YNAB only. I even set people up using the profit first system using YNAB with no issues.

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