QuickBook accounts

[RSmith2.]

We're a small business using QuickBooks and have just taken out a mobile phone contract. I was hoping for some clarity on which account this would be best listed in.

 

[numbersrule]

Some mobile phone contracts have two components.

1. Airtime
2. Device Purchase

My view would be that the Airtime should be allocated to 'telephone expense account or whatever the equivalent is in your QuickBooks Chart of Accounts.

The Device Purchase is technically a loan, so I would say that component of the monthly charge should be allocated a Long Term Liability Account called something like 'mobile phone contract', assuming of course the contract is more than 12 months, or if not then a Current Liability. You would need to record the Loan Principal as

DR mobile phone asset
CR mobile phone contract

You could depreciate the asset as a straight line reduction over the term of the contract.

There may be alternative views from other posters.

 

[MyAccountantOnline]

We're a small business using QuickBooks and have just taken out a mobile phone contract. I was hoping for some clarity on which account this would be best listed in.

As Numbersrule says it may be that the contract includes airtime and the cost of the phone - can you give us some further details on what the payments are and what they include.

 

[MyAccountantOnline]

Also you say 'we' are you a sole trader or is it for a limited company?

 

[syedsheraz]

We're a small business using QuickBooks and have just taken out a mobile phone contract. I was hoping for some clarity on which account this would be best listed in.

For QuickBooks, it’s usually best to split it into two parts if possible:

• Monthly airtime/usage → post to an expense account such as Telephone & Internet (or Utilities > Telephone).
• Handset cost (if it’s a separate charge or financed) → record as Computer/Office Equipment (fixed asset) or Office Equipment and depreciate if material.

If it’s all bundled into one monthly fee and the handset value is small, many small businesses simply expense the full amount to Telephone & Internet for simplicity. Also worth checking the VAT treatment, as handset and airtime can be treated differently.