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How Much Data Can QuickBooks Hold?

via QuickBooks Tip – How Much Data Can QuickBooks Hold?.

How much data can your QuickBooks company file hold before it becomes “stuffed”, overflowing like a file cabinet, and SLOW?  This is a very good question that most people don’t take into consideration — well because it’s software and should hold an unlimited amount of data.

QuickBooks Pro and Premier are designed for small businesses with 20 or fewer employees and annual revenues of less than $1 million per year, according to the latest information from the ProAdvisor certification study materials.  It is intended to store at least 2 years of detailed information in a company file – this allows you to compare your current business years performance with that of a previous year.

Quickbooks Enterprise is designed for larger businesses having 20-250 employees, needing up to 30 simultaneous users, stricter user access to financial information with 115 different permission settings, want to connect multiple locations, perhaps have remote workers, need to combine financial statements from multiple company files, and have more than $1 million in annual revenue.

How fast a QuickBooks file grows varies significantly from one company to another.  there is no “average” or “typical” company file size, since every business tracks different information.

How quickly a data file grows to “overflowing” will depend on the number of transactions that are entered, the amount of information entered per transaction, and the number of “links” per transaction.

For example, a company that enters 500 1-line invoices per month might find that their data file is smaller than another company that enters 100 5-line invoices per month.  Another example would be a company who usually receives 5 separate payments per invoice would have a larger data file than a company who receives one payment per invoice.

A good way to estimate the growth of your QuickBooks company file is to take the average number of monthly transactions (keeping in mind that an invoice, a payment and a deposit represent 3 separate transactions; while a bill and a bill payment represent 2 transactions), and multiply that by 2 KB to determine approximately how much your file will grow each month.  You can then take the monthly amount and multiply it by 12 to determine an estimated yearly data file size.

According to Intuit, QuickBooks can handle a maximum or 2 billion transactions, however, they do not state which version, (Pro, Premier, or Enterprise) this figure applies to.

In addition to estimated annual file growth and a maximum number of transaction that QuickBooks can handle, business owners must also take into consideration the maximum number of List items that QuickBooks can can accommodate.

The table below indicates the maximum number of items that can be held in individual and combines lists.

List Name
Maximum Number of Items
(Simple Start, Pro, Premier)

Maximum Number of Items
(Enterprise)

Chart of Accounts
10,000
10,000

Items, including Inventory Items
Group Items can contain 20 individual items
14,500
>100,000*
(29,000 in version 6.0 & earlier)

Job Types
10,000
10,000

Vendor Types
10,000
10,000

Customer Types
10,000
10,000

Payroll Items
10,000
10,000

Payroll Items per Employee Record
25
100

Price Levels
100
100

Classes
10,000
10,000

A/R & A/P Terms – TOTAL
10,000
29,000

Payment Methods
10,000
10,000

Shipping Methods
10,000
10,000

Customer Messages
10,000
10,000

Memorized Reports
14,500
29,000

Memorized Transactions
14,500
29,000

To Do Notes
10,000
10,000

Total Names – Employees, Customers,
Vendors, Unit of Measures and Other
Names – COMBINED
14,500
100,000*
(29,000 in version 6.0 and earlier)

Sales Reps
14,500
29,000

Sales Tax Codes
10,000
10,000

Billing Rate Levels
100
100

Fixed Asset Items
10,000
10,000

Ship Via
10,000
10,000

Templates
10,000
10,000

Units of Measure
10,000
10,000

Ship To Addresses
Unlimited (?)
Unlimited (?)

 

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Business Entity Types Explained

December 30, 2010 1 comment

Overview of Different Business Entity Types

If you are thinking of starting a new business, or restructuring or incorporating an existing one, you may be somewhat perplexed as to which corporate entity type to choose.  Since each type has its own pros and cons, let’s take a look at those to help provide some insight.

Sole Proprietor: A sole proprietorship is owned and operated by one person. This is the simplest and least expensive business structure to form. Many start-up companies choose this form until it becomes practical to enter into a partnership or to incorporate. As the sole owner, all profits go to you, as do the losses! Your business profit and loss is recorded and is transferred to your personal tax form.

Pros:

  • Easy to form, hardly any restrictions and very few forms to fill out.
  • Control of profits.
  • Control of decision making and flexibility.
  • Less government control and simpler taxation.

Cons:

  • As a sole proprietor, you are responsible for 100 percent of all business debts and obligations.
  • The death, physical impairment, or incapacitation of the owner can result in the termination of the business.
  • It is typically more difficult for sole proprietors to raise operating cash or arrange long-term financing.

General Partnership: General partnerships are formed by two or more legal entities (any kind of legal entity can be partner), and each of those entities are individually responsible for the partnership. Each partner is personally liable for the partnership’s debts and legal liabilities. For tax purposes, all partners are considered self-employed and claim their share of the partnership’s income on their individual tax.

PROS:

  • Combined assets and expertise and flexible decision making.
  • Partners, not partnership, taxed at the individual level.
  • Business expenses deductible.
  • Ease of formation and low startup cost.
  • All the income generated by the business flows through to the owners.

CONS:

  • Partnership terminates on death or withdrawal of any partner.
  • Each partner is individually liable for agreements made by any partner.
  • The partners are held personally liable for business debt or damages.
  • Both income and management is shared among all the partners.

Limited Partnership: A limited partnership is much like a general partnership in structure. The main difference is that in a limited partnership, there are two different kinds of partners: general and limited. A limited partner does not take part in the management of the partnership and is not liable for any more than his individual capital investment.

Pros:

  • Limited partners are not personally liable for the partnership’s debts and obligations.
  • Partnership does not dissolve with death of limited partner.
  • Number of partners/owners unlimited.

Cons:

  • Transfer of interest usually requires general partner approval.
  • Complete and separate paperwork filings.
  • Limited partners have little, if any, control over daily operations.

Limited Liability Company: A limited liability company (LLC) is essentially a hybrid of a corporation and a partnership. An LLC provides the same kind of tax and liability benefits as a corporation, but has the same management structure as a partnership.

Pros:

  • Lacks the formalized requirements of a C-Corp but has the same liability protection.
  • Taxed on your personal income only.
  • No limit on the number of LLC members, and anyone can be an owner.
  • Under IRS “check-the-box” rules a limited liability company may choose whether to be taxed like a partnership or a corporation.
  • Members are compensated using either distributions of profit or guaranteed payments.
  • Possible to convert an LLC into a corporation.

Cons:

  • LLCs cannot go public or issue stock.
  • Active members are subject to self-employment tax for Social Security and Medicare.
  • It cannot raise money through the sale of stock.
  • Each member’s pro-rata share of profits represents taxable income–whether or not a member’s share of profits is distributed to him or her.
  • As a member of an LLC, you are not allowed to pay yourself wages.
  • Some states do not allow the organization of LLCs for certain professional vocations.

S-Corporation: An “S” corporation is much like a “C” corporation in that it is also its own legal entity, protects its shareholders from legal liability, and requires a significant amount of effort and money to start and maintain. However, an “S” corporation allows shareholders to claim their share of the corporation’s income directly on their personal tax return.

Pros:

  • The profits and losses of the business pass through to the corporation owner’s personal income tax. Like a Limited Liability Company, the tax “pass through” allows you to avoid “double taxation”.
  • Reduce Taxable Gains: Selling your business can be part of your retirement strategy. An S corporation could have reduced taxable gains when the business is sold.
  • S corporations offer protection against liabilities. However, liability protection is not complete protection.

Cons:

  • One Class of Stock: Not having the ability to issue different classes of stock affords a business less control over the company and limitations on the stock value.
  • Passing income through to shareholders can be a disadvantage in some instances. If the business is profitable, shareholders will be required to pay income tax on their share of the profits, even when not distributed to them.
  • Even though losses pass through to shareholders in an S-Corporation, those losses aren’t deductible by shareholders who don’t materially participate in the business.
  • May not own subsidiaries, which can make expansion difficult.

C-Corporation: A “C” corporation is a standard state-formed corporation. It is a legal entity once it is formed, so it files its own taxes and is responsible for its own dealings. A “C” corporation can have unlimited numbers of shareholders, and those shareholders can be any kind of legal entity. Corporations are the most expensive kind of business to begin and maintain.

Pros:

  • Ideal for a business trying to attract public acquisition and venture capital.
  • Can have an unlimited number of shareholders.
  • Shareholders are protected from the corporation’s liabilities.
  • Health insurance premiums and group life insurance up to $50,000 in benefits are fully deductible by the corporation and not taxable to the employees.

Cons:

  • C-corps have to abide by many requirements, such as holding meetings of a board of directors and keeping minutes, maintaining bylaws, and filing formal paperwork.
  • Taxed as a separate corporate entity, so in addition to your personal income taxes, you will have to pay corporate taxes.
  • Double taxation-the corporation pays taxes on its income and the shareholder pays taxes on dividends.
  • Shareholders cannot deduct the losses of the corporation.

If you are unsure which type is right for you, speak to a qualified accountant, consultant, or tax professional to help you make the right decision for you and your business.