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Recording of Shares in Hosted

Bruce

I'm hoping somebody has experience with recording shares in Hosted. (I have a client company who holds a number of share investments in addition to their normal operations.)

I would like to be able to:

purchase shares and record quantity; do I do this by writing a cheque and treating each share as a separate item?
how would you record brokerage so that it is allocated to each individual share (rather than a common brokerage account). By and large shares will be held rather than actively traded
show each holding on the balance sheet, (perhaps Other Assets)
how would I then report sales
how would I be able to run a single report which shows each share and the quantity currently held

Comments

Rav

Hi Bruce,

Fellow Community members may be able to provide some insight on how they may have approached this but just from my own understanding, I don't think Hosted is right solution for this type of activity. There isn't a provision in Hosted to record securities or download share price info etc.

The Personal Range software (Personal Plus & Home & Business) on the other hand is more designed for this type of functionality and has the ability to track investments and download ASX & NZX prices.

I don't think I've come across this type of setup being used in Hosted but lets see if there are any folks who have other ideas.

John Graetz

Bruce, it is possible but as Rav suggested, it is not the ideal platform to use. I have done this in the past, You can use the Other Asset class to do this, but you cannot get the type of report that you are looking for to happen automatically, but there are ways around this. This was my approach which is not all that dissimilar the purchase of other types of capital assets:

Create an Other Asset heading called say INVESTMENTS
Create a separate sub account underneath that for each separate investment Company purchase.
Create a separate Bank Account to mirror your (Online) Broker Account
When you purchase shares, transfer the funds from whichever bank account you use to pay the broker, but in this case the value will go to your separate Broker Bank Account. As I said, this then mirrors the account that is held with the Broker.
As part of step, you then need to write a cheque on your Broker Bank Account and code it to the Asset Account that you have set up for tracking the investment. As part of this step, use the memo section to record the number of shares purchased. If further shares are purchased or sold for this Company, again you can only use the memo section to update the holding total. The value that you use would always be the cost plus brokerage charges as it needs to mirror your account with your Broker.
When you sell shares, you can then book the profit to whatever income account that you want to use for this purpose or an expense account if your want to book a loss. By doing this you will be able to clear the value in the asset account back to zero. This can get a bit complicated if your are only selling say part of the holding. The main thing here is that each transaction will show in Reckon and the asset shows on your Balance Sheet and the memo section is update to provide details of the current holding.
If shares are say sold and the proceeds used to purchase a new investment, you would again be just recording the transactions through the Broker Bank Account until such time as further funds were injected into the (Online) Broker Account or were brought back to you normal bank account.
Again, the purpose of the separate Broker Bank Account is used to reflect the funds which might be held with the actual Broker.
There is another option that I did not bother to look at and that would be to use Inventory for the purpose, but I thought that could get a bit complicated, but on the other hand, it might be able to produce the reports that you want and could potentially work better. The approach I used though was to specifically mirror the Broker Account.
No doubt there could ways to simplify some of the above process, but it worked for me.

John L G

Acctd4

Agree with John however I have Set up the Shares as Inventory Parts in order to accurately track quantities. You can link each Share Item Asset to a relevant (& separate if preferred) Inventory Asset account as well as setting the sale & purchase sides to applicable (Other) Income/Expense accounts & using Sales Receipts when you sell.

Setting them up this ways also allows you to utilise the many available financial, sale, purchase & inventory reports really effectively too! ☺️

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John Graetz

Shaz. I can readily accept your way as being the alternative that I mentioned that could be used in this circumstance. The only reason that i did not use it at the time was because of only very limited exposure to Inventory and to be frank, I did not even think of that as being the way to go at the time. There are certainly advantages in going down your path.

John L G

Bruce

Thanks everyone for your responses - and I totally agree that Hosted is not the ideal fit for this.

However, I have explained this to my client but she is adamant that she wants all the Company's details in one file and accepts that reporting may not be elegant and that it will take me extra time to work out how to do this. So I am continuing on, and getting paid for the privilege 🙂

My initial thinking had been to use @John Graetz 's approach but I wasn't keen on it because the only way to record the number of shares was in the memo field. This concerned me as it would become fiddly keeping track of the size of holdings - particularly as the plan is to reinvest dividends.

I hadn't thought of @Acctd4's inventory approach and will give it a try. Shaz, on this point, using inventory usually means amounts appearing as COGS when stuff is sold. This won't be a huge issue as by and large the client has a buy and hold strategy but without doubt some shares will be sold over the years. However do you approach this?

Thanks again for your help

Bruce

PS As an aside, I use Home & Business 2013 for a couple of SMSF's; are there any recommendations on an upgrade path?

John Graetz

That is the key to this, Bruce, having everything integrated into the one package. Finding innovative ways of doing this part of the joy we have in doing our jobs.

John L G

Acctd4

“ … using inventory usually means amounts appearing as COGS when stuff is sold …”

This is only when the user has mapped the purchase side to a COGS account. If you link it to an expense account, it will reflect there instead 😁

Bruce

@Acctd4 , Shaz I've been thinking further about how to map the purchase side.

In my case where the client is not a going to be a trader of shares, would it make more sense to map the purchase to an "other asset" (for each security)? It seems to me that this has the advantage of not appearing on the p&l and provides a starting cost base for the security. Of course, the starting base can change over time, but this is the accountant's problem.

Acctd4

It will still automatically show in the Bal Sheet that way. If you utilise the “Other” Income/Expense accounts, you can eliminate these from the P&L by selecting “All Ordinary Income/Expense” under the Accounts filter.

You should still be able to see the starting Cost Base in the Asset account(s) along with any value increases/decreases accordingly.

Bruce

Thanks Shaz, time for me to get to work.

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