This is super helpful, is there a way to batch add the locations and classes to all existing transactions before I start a second location? Or import one? Also, adding the location or class to an old invoice updates the customer maybe? That seems unecessary if it no changes to dollar amounts are being made, is there a way to just get groups of existing transactions classed and located in a batch?
Hi! Thanks so much for watching! You can use a third party "import" tool to batch update transactions in QBO. This is a good one! www.saasant.com/app-saasant-transactions-quickbooks-automation.html I demonstrate this in the end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Thank you so much. I have two businesses, and you solve my problems of wanting to group the expenses into its group without purchasing another program.
Hi! Thanks for watching! No, you would have one COA for the entire subscription. If you find yourself thinking that each business could benefit from a separate COA, it would probably make sense to investigate separating out into a different set of books. That's a good litmus test: If you can use one COA, one subscription makes sense. If not, you might want to consider two. We discuss this in great detail in our end to end course: Real Estate Accounting Bootcamp. Definitely check it out! www.incomedigs.com/reab2
Hi! Thanks for watching! Sure! All we are doing is ensuring the accounting is accurate. We can surely use "Location" to differentiate the foreign subsidiary from the parent company.
This has been a super helpful video. Question.. How do you give a "location" to wage and taxes in employee payroll? I have one employee that is a personal assistant for one of my locations and al of her payroll stays in the "not specified" column. Thank you!
Hi! Unfortunately I do not believe this can be coded/ setup "behind the scenes". I am not aware of a way to setup rules to assign payroll/ wages to specific locations. I am looking into this!
Hi! Thanks for watching! No...not technically. QBO will not allow accounts to be "business-specific". But, you as the user can try to force that rule. By this I mean only allocate expenses for a certain business to certain accounts. This is an area where you have to be diligent. QBO does not know the "rules" you are trying to follow.
I would personally advise to have them switched primarily if you have a vendor bill that breaks out the line item by property. You will then be able to select "Rental" as the business and identify each property charges by line item.
Are you saying to do this instead of his suggestions or you mean instead of choosing the business you choose rental? I was wondering what I would do if I had an expense that was used by each property across multiple businesses. Is that what you mean? To use Rental instead of Business Entity so it can go across all?
Unfortunately no. The best mitigation is to create saved reports for Business = Not Specified. You can run that report and it should be empty (everything is assigned). If any transactions appear, you can drill down to correct them.
Thanks for sharing this, just wondering if we have multiple entities in different countries, with different accounting specialist (local), is it possible to use 1 subscription as well, or better to have each separated ?
Hi! It is definitely possible to have all in one place. The big question is: Can you create separate balance sheets for each business. If so...you are in good shape. That being said...just because it can be done does not necessarily mean it should be done. You should consider how the business work together....But yes! You certainly can.
Thanks for watching! Unfortunately, No. QBO will not allow you to restrict access to specific locations/ business. Definitely something to think about while considering this strategy.
Hi there. Very informative video. I believe this feature is available for their plus plan only. I’ve the basic membership and my quickbook do not have it.
HI There...that is correct! However, the Plus subscription and this strategy will end up saving you big time compared to multiple subscriptions. Thanks for watching!
This is very helpful. Thank you! Is there a reason not to just use "Customers" as each business? With the tenants as sub customers? P&L's by Customer etc. The main question is what does Location tracking provide that just using "Customer" tracking does not provide?
Thanks for watching! Yes, Customer gets a bit messy. The main reason is that customer is applied on a line by line basis (as opposed to the transaction as a whole). Therefore, QBO will only track Customer for "1 side" of a transaction. E.g. If you record an expense...paid out by your bank. You record the category "Repairs" and the business in the customer field. When you go to your balance sheet by customer (business). Your Bank account will show a value for "not specified". Location or Class at the transaction level is the only way to capture the business on "both sides'. We discuss in detail in our end to end course, Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Amazing content! This is just what I need right now. I am a real estate agent, an investor who wholesales, and I have rental properties and will be owner financing homes very soon. I am trying to decide the best way to setup my levels. If I setup my "businesses" as realtor or investor, then I can setup my "class" as: wholesale, commission, rental, or owner finance, and then my "customer" can be the property. Am I thinking about that correctly? The downfall I see here is that I won't be able to invoice my tenants directly. Any thoughts on structure are greatly appreciated!
Melanie Daigle wanted to copy my Facebook answer here so that all can benefit from this great question! You are doing everything right with the business/ class/ customer split. Don’t forget about sub customers! You can set up your properties as customers and set up specific tenants as “sub customers”. You get the best of both worlds! Thanks so much for the question!
Good question! WE would likely need to use category to accomplish this. At this time, I'm not aware of a way to indicate Location on inventory...but I'll explore a bit!
Hi! Technically, as far as QBO is concerned, Each "company account" or "Login" has completely separate banking feeds and bank accounts. However, if you use the technique that I outline here, all of the bank accounts COULD be used for any "business" that's in your set of books. It would be up to you to ensure that the transactions for a specific bank account are attributed to the correct entity.
Thank you for this video. I am working with 10 LLCs and they all have their own EINs and ban accounts. How do I attach the accounts to the correct LLC? You do not show how to put more info in to the created business. Is there another place to go to assign the win and bank account? I’ve tried to look this up and I can not find it. Thanks in advance for your help!
Hi There! Technically, you will not be "connecting" businesses to specific bank accounts. You have to maintain any of these correlations/ connections outside of QBO. The "Location" field is simply another dimension by which we can categorize transactions. This allows us to maintain the records of multiple businesses in one set of books. While this is a huge positive...the actual maintenance requires a bit of discipline on our part. QBO will not know which bank accounts belong to which LLC. It will also not know which properties belong to each LLC. It is up to us to ensure we are categorizing everything properly.
In this type of scenario, can I connect the different banks for each company in the one QBO Account and split up transactions based on what we know which bank goes to what company? But I would imagine maybe we can see the Balance Sheet correctly this way. No?@@Incomedigs
I really enjoyed this video. I am a CPA who has two new companies. One is a subsidiary of the other. I suppose I can combine them at year-end and delete all intercompany transactions to come up with a consolidated P&L and Balance sheet. My question has to do with the banking feature with the bank (Chase). Both companies have separate bank accounts with Chase but I have only one access to both accounts. When I bring in the transactions from Chase, will I be able to separate the transactions from each account to the appropriate bank account in the appropriate company?
Hey Lewis....thanks for reaching out! Yes...you should be able to separate out the two Chase Accounts. When you setup the Banking link, QBO will likely ask you which account(s) to bring in. As you bring them in, you will map them to the appropriate, separate accounts in QBO.
I've watched many QBvideos and whenit comes to inventory tracking, accounting QB is the best in the market I've 4 separate business where I need to track inventory and expenses. Also I need to do internal inventory transfers among business. I want all this to happen in one place. Which QB version will suit my requirement. Any suggestions would be very helpful
Hi! Thanks so much for watching! This is a good question...and I'll need to investigate it a bit further. I'm not sure the best way to establish, maintain and transfer "inventory by business"....stay tuned!
I'm a virtual assistant. I just took on a new client that wants me to do the bookkeeping and payroll, taxes, etc. (everything QBO - Quickbooks Online does). I bought one subscription of QBO to manage the books, banking and payroll for one of my clients. Would I be able to have those separate businesses link to separate bank and credit card accounts. I understood this video pretty good. Thank you for being so concise! But basically, I want to manage bank and cc accounts for two completely separate entities.
Hi There...thanks for watching! Yes...you can link bank accounts owned by separate businesses. There is no magic to this...just make the connection. However, the confusion can arise if and when you use the "wrong" bank account for an expense. You would need to reconcile the transaction with an inter-company loan. But generally..yes, I suggest connecting as many accounts as QBO has connections for.
@@Incomedigs Thank you for the reply! I should be good then. The two entities don't know each other and I'm only going to access their separate accounts for reconciling anyway. I won't be the one charging anything to the accounts. Thank you again. I liked your video and will keep watching as I have a lot to learn.
Hi Leslie...thanks for reaching out! I don't have anything specific on this as of yet. However, generally, you'd probably make use of "Open Balance Equities" at the start of a fiscal year. This would establish a "starting point" for your businesses. You could potentially use an import tool like www.saasant.com/ It really depends on how much historical data you would want within your new, consolidated QBO account. If you are okay "starting fresh" from a point in time, journal entry would be the easiest route. If you wanted that historical data, you would want to spend some time prepping an export/ import. I would be happy to help this with a custom project...please email if interested! nick@incomedigs.com
This was very helpful. My husband and I are both artists and I do the bookkeeping for both. I understood that the location would be a good way to maintain two businesses within one QBO subscription but that it wouldn’t work for separate invoicing. Could I simply change the company name each time I wanted to send an invoice to get the correct artist name on the invoice? We are in Canada so wondering also about tracking hst tax separately. We remit separately to the government.
Hi Deb...thanks for watching! You certainly can change the invoice name. However, you can edit the attributes of each location. Go to your list of locations, select one...and click "edit. You will see the option to click "Use a different title for sales forms". This should help to automate the process!
Hi Mari...thanks for watching. Not that I am aware of. QBO doesn't treat these entities as truly "separate". I believe all your users would have the same access to all businesses/ transactions.
Hi Brenda...thanks for watching! We go into this strategy in great detail in our end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2 Generally speaking, the cons of this method are as follows: - Auto-issuing 1099s from QBO - You can only issue 1099s from one EIN - Payroll - You can only issue payroll from one EIN - Keeping your Balance Sheet in Check - It's possible for mistakes in data entry to cause "Balance Sheet by Business" to be inaccurate. Assets do not equal Liabilities + Equity.
I had the same question about the cons since you mentioned them but I couldn't find any other video where you go into detail about that. Can you go into more detail about how to do 1099s and also the balance sheet issue. That seems like it could be a big problem...@@Incomedigs
Hi! Thanks for watching! This will work for the balance sheet as well. We go into this topic in extreme detail in our end to end course: Real Estate Accounting Bootcamp. We also discuss the potential pitfalls of this technique: www.incomedigs.com/reab2
Locations vs Classes. Client has two shipping terminals. Want to track income and expenses, P&L separately. If they write one check for expenses for both terminals, I don't see how you can use "locations" but it seems that classes would work for two terminals and split out the transaction. Is that correct? thank you
Super helpful. What about if each of your entities has a different checking account? Do you get into a big mixup there? I have one "parent" LLC with 4 dba's. Each dba has a separate checking account. Trying not to make a monstrosity out of my QBO.
Hi Carine...thanks for watching! In fact, the more you separate your accounts, the better! This avoids potential hiccups with your balance sheet: E.g. Entity A owns a checking account but pays for an expense for Entity B....that creates a hassle. I encourage separate accounts...you just need to be disciplined in using the correct account for the correct business.
@@Incomedigs Hugely helpful video! I am dealing with that hassle you mentioned in trying to sort out several expenses that I used the wrong account. I have been very careful recently to not cross accounts, but any tips you may have on how to sort out those few transactions would be greatly appreciated.
@@richardmercado1128 Thanks for the comments! My favorite way to identify these miscategorized expenses is to draw up "miscmatched reports". Let me explain.... Lets say you have a credit card owned by Business A. Sometimes (as we all do) use use this credit card for expenses for Business B. Create a Balance sheet report with "Business" displayed int he column. When you do this, you should see values hit the combination of Credit Card/ Business. In theory, there should be no value for Credit Card A and Business B. If you see a value there, that means that you have "crossed cards". You can drill down into that number to identify the expenses that need to be reconciled. Your goal will be to have 0 value across all business EXCEPT for the business that owns the corresponding credit card.
Interesting technique, so if I have "holding company A" and "subsidiary B" and "subsidiary C", how would I track all of their business checking accounts with location? Or would all of this information go into Charts of Accounts? Also in this same example I would have 3 "locations" for the 1 holding and 2 subsidiaries. Each subsidiary would have their own "classes". Is the above structure correct? If so let's say subsidiary B has 3 "classes"(stocks, forex, crypto) and a few brokerage accounts opened in its name, would each brokerage account be a "customer"? Thanks for making this video!!
Hi There! On the business checking accounts, you would have each separate account as a unique account in your COA. It would just so happen that each business is probably only using one of the bank accounts. Yes, each subsidiary would have its own classes...but keep in mind: QBO will not know nor recognize the "assignment" of classes to each entity. It would be up to you/ your bookkeeper to enter both the Location (Business) and the Class on each transaction. It is entirely possible to make an error and assign a location with a mismatched class. To your final question: Yes, you could continue to add the detail for each brokerage account. However, this might get a bit complicated to keep up. It is certainly possible, you just want to make sure you aren't overcomplicating the bookkeeping.
Hi There! Unfortunately, I do not consider myself an expert on QB Desktop. It is my understanding that this feature is not available on QB Desktop...you would need to utilize separate company files. However, if any other Desktop users can correct me...I would be happy to be wrong on this one!
I have a separate bank account for each entity. Is there a way to automatically tag transactions to the appropriate company based on the bank account the transaction comes from?
Yes! You should be able to create a rule for each bank account where the "Location" is automatically assigned. You would simply assign a different rule for each account.
Hi Poppy. Thanks for watching! Unfortunately the reporting will still be a bit tough. Drawing up a balance sheet/ P&L by entity would not work unless you have that additional "dimension" added to your transactions. In this case, Location tracking checks that box.
I enjoyed your video and it has been very helpful in separating three business entities. The only issue we have at this time is credit card payments show up in the unspecified column on the balance sheet. On the pay down credit card feature there is no drop down for the businesses. The only way I have found to mark them for the proper business is to enter the payments as an expense with the payee as that particular credit card, but not sure if it's good to do it that way. Do you have any advice on the credit card payments? Thanks for your help.
Hi Keith...yes! You have stumbled upon one of the transactions that does not allow for a business. You can simply "categorize" from the banking feed...this will allow you to indicate the business. The same is true for transfers...they will not work if using location tracking.
@@Incomedigs Thanks for your response. If I categorize the credit card payment from the bank feed using the credit card being payed as the category isn't that doubling the expenses already categorized under that credit card?
@@keithdybsetter9713 If the expense has already been categorized under the credit card, QBO will give you the option to "match" it. "Categorize" will create a transaction. "Match" will identify a transaction and assign the bank feed item to it.
Great video and explanation of how to use QB. the question I have is, I currently have 2 passive real estate LLC both in sperate states and an active Home inspection business. Can you run passive and actives entities in the same QB account?
Hey Rob...thanks for watching...and great question! The answer is: "Yes". You certainly can run both active and passive entities in one QBO account. That doesn't mean you necessarily Should. When making this decision, it comes down to how similar the operations are of these entities. The main benefit of keeping multiple entities in one QBO account is that you can have a consistent setup for all three: Chart of Accounts, Vendors, Products & Services, Saved Reports. For the two passive LLCs, this would make complete sense. For the Home Inspection business, you might have different accounts that you use....maybe different vendors, etc. In this case, it might make more practical sense to keep things separate. Also consider whether or not you would benefit from reporting on all three businesses "side by side". With all three in one QBO account, you can create a P&L with "Business" as the columns. This allows you to juxtapose the profitability of each business and compare it to the others. If this is something of value to you, you can certainly add additional consideration to all three businesses in one account. Ultimately it's up to you. The software can handle the three distinct LLCs.
I. getting ready to start up a small business, but also am doing 1099 contract work for two other companies. I need to be able to track all my expenses separately, so this looks like it should work. However, all three are home based so I will need to divide expenses by 3 and also will need to report mileage for all three separately as well. How would you do that?
Hi Jose...thanks for watching! I would not divide up the home office expense nor mileage in QBO. These are tax deductions that do not need to be reflected in your actual QBO finances. The same would go for other tax credits/ deductions. I would track your business expenses as they are actually incurred...and then at tax time, make the necessary adjustments fo your return.
I have a business and personal and am running on one instance of qbo. Can I just filter out the personal checking accounts on p&l leave the business checking accounts and the would produce a business p&l. ?
Hey Stephen...thanks for the question! It might be possible...but that would assume ALL your transactions for the personal business run through that checking account. That means you wouldn't be able to use invoices, bills, credit cards, etc. But yes, if ALL your personal transactions (expenses and income) run through that one bank account, you would be all set.
I'm trying to determine which quickbooks version to go with. I have two rental property LLCs set up as well as two other side business. Can I do this in Quickbooks Essentials online even though you point out you're using Plus?
Hi There! Thanks for watching! With the two rental properties, you can probably get away with QBO Essentials. As you grow...maybe ~4-6 Rental properties, you may want to consider upgrading to Plus. With Essentials, you will not be able to manage multiple businesses. You will not have "Location Tracking". You will also need to use Customers to differentiate between your properties...you will not be able to use "Classes". If you anticipating growing rather fast...you can go ahead and upgrade to QBO Plus right away.
This is great stuff; I too have multiple locations for a staffing company so I might be able to use this. I have a question regarding how to apply a customer payment, can we do it within the holding company or the payment needs to be done on each individual company level?
Hey Eddie...you can do it through the holding company. However, this may require a bit of "clean up" at the end of the year (but not a big deal!). The cleanup would involve "moving" the negative bank funds from the balance sheet of the individual company back to the holding company. When you make this move, you would record an intercompany loan/ equity transaction. The holding company makes the payment on the individual company's behalf. So you are just treating this as if the holding company loaned the individual company the funds. We discuss this in great detail in our end to end course: www.incomedigs.com/reab2
I have just purchased Quickbooks Online Plus and there is no location label on the location tracking. I can only Add location label on an expense. Will this stop the ability to do what you are showing. Also I need it for the use of a client account as one business and current account as the Tax accounts. You have not mentioned bank accounts in this video.
Hi Margaret, Thanks for watching! Every transaction type except for "transfer" should have the "Location" field available. Expenses, Checks, Invoices, Bills, Sales, Receipts, etc....definitely journal entries. Make sure to turn it on in Settings. Bank Accounts should be labelled within the Chart of Accounts. E.g. Checking - Business A, Checking - Business B, etc. QBO will not know to "automatically" assign transactions for a specific bank/ credit card with a business. That would be done by the user using the location field.
Hey Sir, I have just purchased Quickbooks Online Plus and there is no location label on the location tracking within the setting. Is there a way to change the location label to business?
I have been running personal and business separated by departments. I man need to set up separate books for each. Is there any way to export all of the all ready categorized personal transactions to a new instance of qbo?
Hi Stephen...thanks for watching! I do not believe it is possible to duplicate/ replicate one set of QBO to another....using native QBO features. However, you could potentially use a 3rd part software like Saasant Transactions : www.saasant.com/app-saasant-transactions-quickbooks-online.html
dilbar masih That’s the beauty of this approach: 1 COA for each business! You can then run a report and filter by Business. You wouldn’t want to use this approach if your businesses have vastly different COA needs. If that were the case, separate subscriptions probably make the most sense.
@@dilbarmasih3642 The reason we use "Location" for "Business" is because Location is tracked at the Transaction level...not the line item level. This forces QBO to record both sides of the transaction to the appropriate business. In my experience, Location is best to track by business while class is best for line item level property tracking. Class Can be used at the transaction level. However, you are now limiting yourself....you can no longer use Class for tracking properties. If you track at the line-item level, only those specific COA that have a Class associated with them will be tagged w/ the appropriate business. For example: Say you have a credit Card expense in which you have 2 lines. Each line is tagged to an expense category. On your P&L, those expenses would properly be listed under the appropriate business. However, on your balance sheet, the credit card transactions would show up as "Not specified". Its only when we track an entire transaction to a Location/ Class that QBO tags both sides of the transaction.
Hi Emilia...thanks for watching! You would need some sort of native knowledge of the expenses coming into your books regarding which business they were incurred under. Once you understand that, you would simply tag these expenses with the "Location"/ "Business" drop down that appears in the expense/ invoice. For my business, the best practice is to have as many separate bank accounts/ credit cards as is feasible for each business. This helps me to determine for which business expenses are incurred. Of course, there are the situations where you have one business spending funds from another business's bank/ credit card. But these should be rare and can be reconciled with a journal entry.
I finally set up my quickbooks online plus for all my properties after several years' struggling. It's all because of this video! The only issue I ran into is that my expenses are showing as "unspecified" in Balance Sheet Report even though I filled out "customer" correctly. They are under correct customer column in the P&L report though. I noticed that if I change the "Payee" from the actual vendors to a customer, it fixes the issue. It looks like the balance sheet report and P&L report are using different "customer" for expenses. Have you perhaps run into issue like this? (I hope my explanation makes sense.) Thank you so much!
Hey...so great to hear you found this video helpful! I've run into this a couple times. Are the expenses "bills" by any chance? When you create a bill and don't indicate a company, then apply a payment, the payment gets tagged as "Unspecified"...even after going back and adjusting the "Bill". Beyond that I haven't run into it. Feel free to send a quick video demo to me: nick@incomedigs.com
My client has an established business and is adding a rental property. Can I start using the business label for the rental and leave the other business as unclassified until the start of the next year, and then add a classification to the original business. Or will that make things messy?
Hi Deanna, thanks for watching! I would try to go back in time and assign every transaction to a business. You want to avoid having "Not Specified" anywhere on your balance sheet/ Profit & Loss. The only way to accomplish this would be to make sure all transactions over time are tied to a business. You could also use a journal entry as a "quick fix". You can pick a point of time to "move" the balance of an account from "not specified" to a specific business/ location.
Do You Have The Follow Up Video On This? And also you mentioned you were going to discuss more on how to use class as to differentiate between rental and rehabs etc.
Hi There! We cover a lot of these nuanced topics in depth in the Community attached to Real Estate Accounting Bootcamp. Specific examples, deep dives, etc. Check it out! www.incomedigs.com/reab
That category field is no longer available under Advanced as of September 4, 2020. How do I add without it? Or have they completely taken that option away?
Hello...thanks for watching! Are you sure you have QBO Plus? This field is available on QBO Plus and above. As far as I can see...it is still available.
Hi Nick, Thanks for the video awesome tutorial. Can you please help is it possible in QuickBooks to track seperate business + location wise sales for each business under single QuickBooks entity?
Hi There...thanks for watching! Yes....Just like the expenses demonstrated in this video, your sales transactions will also be tracked "by business". The idea is that your entire P&L + Balance Sheet can be tracked "by business".
Hi There! I still like to use "Projects"...but not to track business-specific expenses. Instead, I suggest using "Projects" for specific renovations/ cap improvements on a specific property. It is common to have "Many Projects" all within the same "location" or "business".
Hi Leyla, thanks for watching! Yes, we have a video discussing setting up your Chart of Account for Rental Property Management. We specifically use Cost of Goods Sold for this process. Check it out here: ruclips.net/video/xwO879TAJuw/видео.html Also, check out our end to end training course, Real Estate Accounting Bootcamp: www.IncomeDigs.com/reab
I have separate quickbooks 2009 desktop files for each of several businesses. I want to import all of them into one QB) subscription and set it up as you have. Can I import multiple desktop files into one QBO subscription? If so, during each import can I set all transactions for that import to a corresponding location?
Hi Matt...thanks for watching. I haven't tried the specific technique you are asking about. I have a feeling that QBO would NOT allow you to indicate a location on your import...but I'm not 100% sure. I would imagine you would need to use a third party software to help ensure the Location field is imported. Something like Saasant would help with this: www.saasant.com/app-saasant-transactions-quickbooks-online.html
Hi there....try starting with QBO's standard reports: Profit and Loss. This will surely have valid date range and show data. Then you can adjust the dates and filter/ establish columns accordingly.
@@Incomedigs @Income Digs Hey Nick, I see values now but only expenses. You see, my boss has 5 companies with 5 bank accounts linked to qbo and he wants the wire transfers incoming from one account to another to show as income. Is that possible? If so, would you know the solution to it? Thanks in advance. 😊
@@donna0224 You could do that....but you would likely need multiple transactions or a journal entry. A journal entry would look like this (Business A pays Business B) Bank Account- Business A (CR) Bank Account - Business B (DR) Expense - Business A (DR) Income - Business B (CR)
I am using QB online and have 2 different companies, and when I click on the Gear icon - Account & Settings - Advanced, the Categories Section is missing. Is this something QB removed in the most recent updated version?
Hi Nick, Is this feature still good to do with multiple entities with all having their own TIN #'s. Looking for your help.. I feel this is very helpful. But QB does not recommend.Thanks
Hi! You are right! QBO does not recommend! They want you to spend $$$ on many many subscriptions. You can certainly do this with multiple entities having multiple TINs...there are just a couple restrictions to be aware of: 1. You will only be able to have 1 "brand". You cannot have various different logos, etc for your invoices, statements, etc. 2. Generating 1099s via QBO - You will only be able to do this from the main, parent account Remember - QBO is a tool to help you run your business and prep for taxes. Most people have nothing...they have excel. So don't let QBO (or anyone else) scare you off by saying "You must have a different account for different entities". There are no "rules" like this. The IRS does not force any business to use any software. As long as you are reporting accurately on your taxes (which this system can certainly do), you have nothing to worry about.
@@Incomedigs how have you managed through the branding issue? Other than not being able to use a different logo, are you able to invoice using the “business” name?
@@fayenemer7806 Hi Faye....yes, you can adjust your "Sales Forms" to show differently when a different business/ location is used. Personally, I use an "Umbrella" approach. The main business that holds the subscription is the only business that has a brand facing the customers. That allows me to centralize everything. To the tenants, its all one umbrella property mgmt org. Behind the scenes, I have my separate location setup. But yes...you can customize your sales forms. In the list of Locations, you are able to edit the attributes of that location when it comes to communicating with your customers.
Thank you for another very helpful video! I have a question on how to apply transferred funds between the two business checking accounts to a category. I have recorded the transfer from checking account A to checking account B. But now in account B, I need to apply that transfer to sales. Let me explain my example: A deposit for rent was submitted to the wrong checking account (A). So we transferred the money from A to checking account B which is where the money should have been deposited to. Now that the transfer is showing in checking account B, I need to categorize that money to one of the rental units so when I am running reports I can see that money was applied as rental income for that unit. What transaction type should I do here? I tried to do a journal entry debiting checking account B and applying credit to the appropriate unit, which does show the funds applied to the correct unit, but then it shows that money as a deposit in checking account B instead of a payment so my Quickbooks balance is incorrect. Thanks for any guidance!
Hi Erica....good question Here is what I would do...because we are messing with multiple locations...I would stick to journal entries. You can always still match the banking transaction Journal 1 - Receiving Rent Debit Checking Account A...the exact amt. of the rent Paid. Mark this line with Location A. Credit "Rental Income" the exact amt. Mark this as Location B (The business that SHOULD have received the rent. Now...if you were to save this as is, the balance sheets for Location A/ Location B would be off. You need to record some sort of Inter-company transfer. You can setup an asset or Liability account to handle this: "Intercompany Loans". Add two more lines to your journal...each with Intercompany Loans. Debit the exact amount of the transfer...on this line, mark it as Location B. The next line, Credit the Intercompany Loans, mark it as Location A. This will balance the balance sheet. Now....Location A "owes" these funds back to Location B. Journal 2 - Transfer the funds back Debit Checking Account B....exact amt. of transfer. Location B. Credit Checking Account A, exact amt, Location A Debit Intercompany Loans...exact amt, Location A. Credit Intercompany Loans, exact amt, Location B. Give that a shot and let me know!
@@Incomedigs Thank you so much for those instructions! Unfortunately I still can't get things to balance. There is only one rental location involved in this transaction. Journal 1 I debited checking account A and left location blank. I then credited rental income and added the location. Then I debited and credited the intercompany loans. Journal 2 I debited checking account B and credited checking account A and credited /debited intercompany loans. Where you say to use location A, I left that blank and location B I put in the property location that the rent was received for. Checking account A balances, the rental location shows the deposit amount applied, but checking account B shows the deposit amount entered twice, once from matching the transfer and once from the journal entry but it has no payment. I tried messing around with the journal entries several different ways but when I got the bank balances to match, the rental income wasn't showing as applied. If you have any other suggestions I will happily try them as this has stumped me for over a month and I haven't had any luck with QBO. Thanks again for taking the time to try to help!
I assume the trial balance have to include every entity as there is no way of separating them like P&L report. If you could verify this, that will be great. Thanks.
Thanks for the informative video! I have created a quickbooks account with 4 different businesses. They each have their own bank accounts and also have their own credit cards. How do I set it up to associate the credit cards with the respective bank account/business?
Hi Jon...thanks for watching! There is nothing to do in Podio to associate these cards/ accounts with the appropriate business. The best you can do is name them appropriately (e.g. Business A - Credit Card). It will be up to you to ensure that you spend and record transactions from the correct card to the correct business. That being said, as you work through banking transaction, QBO will start to learn your self-imposed rules and make suggestions for auto-tagging certain cards as a the correct business.
So glad you found it useful! We dive way deeper and provide regular support through our end to end training program. Checkout the bootcamp! www.incomedigs.com/reab2
Is this considered commingling of funds? Do you add multiple bank accounts for the different EINs? Trying to find a way to switch from desktop and still have multiple accounts. thanks!
Hi Melissa...thanks for the question! I defer you to your tax professional for an official answer....but my CPA supports my strategy. As for bank accounts, I still try to have my bank accounts designated for certain entities. If/ when I use the wrong card for an entity, I log an "inter-company loan". These loans can get confusing...so I try really hard to use the right accounts for the right businesses. For reference, I currently have 4 separate Legal entities in the same QBO plus subscription.
@@melissamartins9900 Thank you! If you haven't already, check out everything we have available at incomedigs.com...including our new end to end QBO training: www.incomedigs.com/reab
@@Incomedigs As long as you maintain a separate checking account for each holding entity, think Limited Liability Company, you are not commingling funds. keep a separate account and ledger.
Hey, thank you so much for this video, you are a life saver. I have a question and maybe other have too. On the categories, where it says track classes, which one should be picked, "one to each row in transaction" or "one to entire transaction"?
Hi There! Thanks for watching! I typically suggest "One to each row in transaction". This allows you to split transactions, where appropriate, between more than one property.
Great Video , Im not in real estate but found the video useful for setting up for a non profit. Can I use the "businesses"to track authors / salesman ? normally we need to use the classes to track functional expenses for a non profit 'so trying to see how I can track both - help greatly appreciated.
Hi Leigh, Thanks for watching! Yes...that Location field should work for that. I know what you mean...its tough to get "multiple dimensions" of reporting in QBO. You want to be able to just "add a tag". Locations should work for this for sure!
Hey I was able to add 1⁄2 company but the subscription ran out with the 7 day free trial it won't let me add another payment method for the second company from the second company bank account it's not Give me any options what are they do
Hi Nancy! Yes...you would not be able to issue 1099's through QBO. You would have to do them on your own. You would be able to track equity for each LLC. You would pull up a balance sheet "by business".
Hello Nick, Your videos have been so helpful to me. I am a new user of QBO. Why should I create an expense when me bank account is linked and all of my expenses are imported? It seems like the expense would be doubled. Can you explain the need for creating expenses?
Hi Candace...great question and thanks for watching! You are right...if you Add transactions from the banking feed, you may not have a need to create expenses "manually". I often demonstrate with these transactions for two reasons: 1. You may not always have every account connected to a bank feed and 2. Not every field is available on the bank feed as is available on the Expenses transaction. For example, if you wanted to itemize expenses with "Products and Services", you will not get that option on the bank feed. You would need to add the expense "manually". In my business, I employ a process whereby I add most expenses manually...ahead of time. Then, as the transaction hits the bank feed I simply "match" it. Its kind of like a second check/ verification. Now I only do this for expenses directly related to construction. For your typical, every day expenses (office expenses, meals, etc), I simply go to the bank feed and click "Add".
How do I issue 1099’s from each separate business/location? I have one QB account and have 3 separate businesses each with a separate EIN. Please help.
Hi B.C.! You will not be able to issue separate 1099s FROM QBO with this method. You can still do it...you just can't use QBO's automation.You would have to generate the report indicating how much is paid to each vendor from each entity...and then issue the 1099s off of the QBO platform. This was a bummer for me too. What I ended up doing was paying just about everything out of one entity (think of it as a "client-facing" entity). I was then able to issue all 1099s out of QBO. I had to offset payments made on behalf of other business with inter-company equity.
Hi William....with QB Desktop, you can have separate company files...all included with the price of the software. I'm not 100% sure if QB Desktop has the "Location" functionality that we have on QB Online.If so, the same technique would be possible.
on the p^&l by locations, I have """business"" and "not specified ": locations. Not Specified is the default, Can i change the name of "not specified to Personal and any thing that is not specified would default to personal.
Hi Stephen...thanks for watching! Unfortunately, No...you cannot change the name of "Not Specified". What I do is create an extra "Location" for "Personal". I then institute a "100% assignment rule" for the business. Every transaction MUST be assigned to a location. If I run a report and anything shows up in "Not Specified", we need to drill down and correct it. This allows you to ensure your report looks exactly how you want it.
This was so extremely helpful! I have 3 businesses that I want to use QuickBooks for was unsure if I could do it at all. Is there any limitation to reporting when it comes to the different businesses; especially as it pertains to anything that I would need to report for the IRS? Thank you for this video!
Hi Audrey...thanks for watching! No real limitations...except for the 40 Business/ Class limit on QBO Plus. You should be able to get everything you need as far as balance sheets, P&Ls, etc. One thing to consider is that Payroll and 1099s can only be done from 1 entity. Usually this isn't a big deal...as RE investors will typically have 1 umbrella or "customer-facing" entity through which all of that flows. That's really the only limitation to be aware of! We discuss some advanced strategies in the comprehensive course, Real Estate Accounting Bootcamp: bit.ly/reabcourse
@@Incomedigs This is awesome news. Thank you again, I learned so much just from watching this 1 video. I'm not in the Real Estate Business but own several businesses whereas I need a financial management system. This will work perfectly
I was wondering about 1099s. So if you have bills coming in from vendors and you're paying them from 10-15 different companies, they will only get a 1099 from the 1 main company the QBO account is under? Don't the 1099s have to come from the entity that paid the expense?@@Incomedigs
When you hit the 40 businesses and/or classes, what do you do? If you delete or retire a class (property) what happens to the financial data? And does it open up a new spot for a new property? I have a client who flips 10-20 properties per year so that could add up fast.@@Incomedigs
I am reviewing a client's books and trying to set this up for all past transactions. Can I do that? Or do you recommend just putting the process in place going forward?
Hi Callie...its definitely possible to retroactively establish past transactions to this methodology. It would be a worthwhile effort so that 2020 books could be compared to 2019. That being said, it really depends on the volume of the books. A full year's reconcile can be extremely time consuming. I would estimate the effort and layout the pros and cons to the client. You should definitely be compensated for the extra effort.
Hi Winston, thanks for watching! Unfortunately, No. You will only be able to issue 1099's using QBO's service from the main company that holds the subscription. This is because QBO doesn't actually acknowledge your other entities...therefore they don't alone those "businesses" to issue 1099s.
You are welcome! Thanks for watching! Please note: This technique is certainly advanced. We discuss a few specific nuances in our end to end course: Real Estate Accounting Bootcamp: bit.ly/reabcourse
Hey Stephen....first, you'll need 1 generic account for all your P&L/ Balance sheet accounts. Steer clear of accounts "per department". I recommend creating brand new, clean accounts for each. Then...you have 2 choices: 1. Go through every transaction and change the account/ location 2. Use a journal entry as of a specific point in time to "move" items from the "old" accounts to the new. Once the "old" accounts are to 0, you can make them inactive.
Hi Riza...thanks for reaching out! Sure...you could definitely do this with ecommerce businesses. I find that this strategy makes the most sense when the businesses are very similar: Same COA, same list of vendors, etc. If that is the case w/ your businesses, go for it!
@@Incomedigs Yes, that might help us. But I am thinking on how the sales be recorded. Do you have another videos on how to record the sales following this strategy?
@@rizabio3596 I don't have a video on it...but you would simply tag each sales receipt/ deposit to the appropriate business. If the businesses already have separate bank accounts, it should be relatively easy to create rules for each account through the banking feed.
Hi Deepa. Thanks for watching! i don't think there is an automatic way to do this. Especially b/c QBO is not really "designed" to handle the multiple entities....this is more of a workaround. You could potentially use journal entries to establish a "starting point" based off an old set of books.
Hi Adam...I've heard this question quite a bit lately. I feel that QBO has removed the ability to change the label! I don't have a definite answer...but given the volume of questions to this end, I think its something that's been removed. I'll let you know if I hear more.
@@fayenemer7806 Hi Faye....Yes! They have eliminated the ability to change the name of Location. In fact, even in my existing accounts that have been around for awhile, it has been reverted back to "Location".
Hi Zonglei, thanks for watching! Projects would not be a sustainable solution. The reporting of QBO makes using Projects clunky and confusion. There are also specific transactions that do not support the "projects" tag as you would need for a business. I have tried Location, Class and Project. Without a doubt, the cleanest, most sustainable solution for multiple businesses is Location.
Hi. I am in UAE. And currently using qb online for 1 company. I got a job in another company and have to handle 16 companies, it's a group of companies. Can you tell me how I can do this in 1 subscription? Like inter company bank transactions how we can do this. Or I need to get more subscription for each company. Looking forward to hear from you. Thx.
Hi! You don't NEED to setup different subscriptions. The most important part is to make sure that each and every transaction is tagged to a "business". You also don't want to co-mingle accounts used for multiple businesses.
Hi Joshua...thanks for watching! I only track my personal finances directly related to rental properties in QBO. I do not manage my overall personal finances in QBO. For that, I prefer a tool like Mint or Personal Capital. However, for Real Estate, I setup a "business" called "personal" which is used to manage the finances of my personally held real estate portfolio.
Hi There...I'm afraid this would not be possible in Simple Start. You just don't have enough "tags"/ "dimensions". QBO Plus is definitely worth the investment.
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Check out my End-to-End Quickbooks Training. www.incomedigs.com/reab ($50 off w/ code RUclips50)
This is super helpful, is there a way to batch add the locations and classes to all existing transactions before I start a second location? Or import one? Also, adding the location or class to an old invoice updates the customer maybe? That seems unecessary if it no changes to dollar amounts are being made, is there a way to just get groups of existing transactions classed and located in a batch?
Hi! Thanks so much for watching! You can use a third party "import" tool to batch update transactions in QBO. This is a good one! www.saasant.com/app-saasant-transactions-quickbooks-automation.html
I demonstrate this in the end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Thank you so much. I have two businesses, and you solve my problems of wanting to group the expenses into its group without purchasing another program.
EXCELLENT! So glad we could help you out!
This is a HUGE help, I was about to cancel my QB and find some other solution. Thank You Thank You
Excellent to hear! Feel free to check out our end to end training...we dive deep into this method! www.incomedigs.com/reab2
When setting up the separate entities in QB can a separate chart of accounts be established for each entity
Hi! Thanks for watching! No, you would have one COA for the entire subscription. If you find yourself thinking that each business could benefit from a separate COA, it would probably make sense to investigate separating out into a different set of books. That's a good litmus test: If you can use one COA, one subscription makes sense. If not, you might want to consider two.
We discuss this in great detail in our end to end course: Real Estate Accounting Bootcamp. Definitely check it out! www.incomedigs.com/reab2
Great, but how would you manage the balance sheet this way?
Hello,
This was super helpful.
Would like to know if this works for a parent company which is having a foreign subsidiary company?
Thanks.
Hi! Thanks for watching! Sure! All we are doing is ensuring the accounting is accurate. We can surely use "Location" to differentiate the foreign subsidiary from the parent company.
@@Incomedigs Thanks for answering. Will see if I can implement that.
This is exactly what I needed! Is there a follow up video that talks about the classes?
This has been a super helpful video. Question.. How do you give a "location" to wage and taxes in employee payroll? I have one employee that is a personal assistant for one of my locations and al of her payroll stays in the "not specified" column. Thank you!
Hi! Unfortunately I do not believe this can be coded/ setup "behind the scenes". I am not aware of a way to setup rules to assign payroll/ wages to specific locations. I am looking into this!
Can assets and liabilities be applied to each separate business?
Hi! Thanks for watching! No...not technically. QBO will not allow accounts to be "business-specific". But, you as the user can try to force that rule. By this I mean only allocate expenses for a certain business to certain accounts. This is an area where you have to be diligent. QBO does not know the "rules" you are trying to follow.
I would personally advise to have them switched primarily if you have a vendor bill that breaks out the line item by property. You will then be able to select "Rental" as the business and identify each property charges by line item.
Are you saying to do this instead of his suggestions or you mean instead of choosing the business you choose rental? I was wondering what I would do if I had an expense that was used by each property across multiple businesses. Is that what you mean? To use Rental instead of Business Entity so it can go across all?
Just change the logo and company info before generating an invoice
Yes! Certainly an option!
The answer I was looking for, now that I'm up to 5 QBO subscriptions for dba entities, etc. LOL. Thank you so much!
Thanks for watching! Remember we dive deep into the detail in our end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Is there a way to make that Location field mandatory so it doesn't get missed?
Unfortunately no. The best mitigation is to create saved reports for Business = Not Specified. You can run that report and it should be empty (everything is assigned). If any transactions appear, you can drill down to correct them.
This is precisely what I need. Where are the follow-up videos?
Hi! We go into this strategy in great detail in our end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Thanks for sharing this, just wondering if we have multiple entities in different countries, with different accounting specialist (local), is it possible to use 1 subscription as well, or better to have each separated ?
Hi! It is definitely possible to have all in one place. The big question is: Can you create separate balance sheets for each business. If so...you are in good shape. That being said...just because it can be done does not necessarily mean it should be done. You should consider how the business work together....But yes! You certainly can.
Thanks for the video. I would like to know if we can put a limitation to a user on which location he can work/view only?
Thanks for watching! Unfortunately, No. QBO will not allow you to restrict access to specific locations/ business. Definitely something to think about while considering this strategy.
Hi there. Very informative video. I believe this feature is available for their plus plan only. I’ve the basic membership and my quickbook do not have it.
HI There...that is correct!
However, the Plus subscription and this strategy will end up saving you big time compared to multiple subscriptions. Thanks for watching!
This is very helpful. Thank you! Is there a reason not to just use "Customers" as each business? With the tenants as sub customers? P&L's by Customer etc. The main question is what does Location tracking provide that just using "Customer" tracking does not provide?
Thanks for watching! Yes, Customer gets a bit messy. The main reason is that customer is applied on a line by line basis (as opposed to the transaction as a whole). Therefore, QBO will only track Customer for "1 side" of a transaction.
E.g. If you record an expense...paid out by your bank. You record the category "Repairs" and the business in the customer field. When you go to your balance sheet by customer (business). Your Bank account will show a value for "not specified". Location or Class at the transaction level is the only way to capture the business on "both sides'. We discuss in detail in our end to end course, Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Hi nick! Great Video. Just want to ask if you can edit the name of the business once you already saved it. Thanms
Hi There...absolutely! To do this, go to "Settings" -> "All Lists" -> Businesses
@@Incomedigs thank you so much
Amazing content! This is just what I need right now. I am a real estate agent, an investor who wholesales, and I have rental properties and will be owner financing homes very soon. I am trying to decide the best way to setup my levels. If I setup my "businesses" as realtor or investor, then I can setup my "class" as: wholesale, commission, rental, or owner finance, and then my "customer" can be the property. Am I thinking about that correctly? The downfall I see here is that I won't be able to invoice my tenants directly. Any thoughts on structure are greatly appreciated!
Just to be clear, I am just starting to setup my Quickbooks online account.
Melanie Daigle wanted to copy my Facebook answer here so that all can benefit from this great question!
You are doing everything right with the business/ class/ customer split.
Don’t forget about sub customers! You can set up your properties as customers and set up specific tenants as “sub customers”. You get the best of both worlds!
Thanks so much for the question!
Melanie, have you found a way to get QuickBooks online to calculate interest and principal for your owner finance customers automatically?
Wow thanks so much for saving me $$$
how to manage inventory and non-inventory item transfer between locations?
Good question! WE would likely need to use category to accomplish this. At this time, I'm not aware of a way to indicate Location on inventory...but I'll explore a bit!
Hi
Just a question, when we switch company account, do the bank accounts also changes?
Hi! Technically, as far as QBO is concerned, Each "company account" or "Login" has completely separate banking feeds and bank accounts.
However, if you use the technique that I outline here, all of the bank accounts COULD be used for any "business" that's in your set of books. It would be up to you to ensure that the transactions for a specific bank account are attributed to the correct entity.
Thank you for this video. I am working with 10 LLCs and they all have their own EINs and ban accounts. How do I attach the accounts to the correct LLC? You do not show how to put more info in to the created business. Is there another place to go to assign the win and bank account? I’ve tried to look this up and I can not find it. Thanks in advance for your help!
Hi There! Technically, you will not be "connecting" businesses to specific bank accounts. You have to maintain any of these correlations/ connections outside of QBO. The "Location" field is simply another dimension by which we can categorize transactions. This allows us to maintain the records of multiple businesses in one set of books. While this is a huge positive...the actual maintenance requires a bit of discipline on our part. QBO will not know which bank accounts belong to which LLC. It will also not know which properties belong to each LLC. It is up to us to ensure we are categorizing everything properly.
In this type of scenario, can I connect the different banks for each company in the one QBO Account and split up transactions based on what we know which bank goes to what company? But I would imagine maybe we can see the Balance Sheet correctly this way. No?@@Incomedigs
I really enjoyed this video. I am a CPA who has two new companies. One is a subsidiary of the other. I suppose I can combine them at year-end and delete all intercompany transactions to come up with a consolidated P&L and Balance sheet. My question has to do with the banking feature with the bank (Chase). Both companies have separate bank accounts with Chase but I have only one access to both accounts. When I bring in the transactions from Chase, will I be able to separate the transactions from each account to the appropriate bank account in the appropriate company?
Hey Lewis....thanks for reaching out! Yes...you should be able to separate out the two Chase Accounts. When you setup the Banking link, QBO will likely ask you which account(s) to bring in. As you bring them in, you will map them to the appropriate, separate accounts in QBO.
I've watched many QBvideos and whenit comes to inventory tracking, accounting QB is the best in the market
I've 4 separate business where I need to track inventory and expenses. Also I need to do internal inventory transfers among business. I want all this to happen in one place. Which QB version will suit my requirement. Any suggestions would be very helpful
Hi! Thanks so much for watching! This is a good question...and I'll need to investigate it a bit further. I'm not sure the best way to establish, maintain and transfer "inventory by business"....stay tuned!
I'm a virtual assistant. I just took on a new client that wants me to do the bookkeeping and payroll, taxes, etc. (everything QBO - Quickbooks Online does). I bought one subscription of QBO to manage the books, banking and payroll for one of my clients.
Would I be able to have those separate businesses link to separate bank and credit card accounts. I understood this video pretty good. Thank you for being so concise! But basically, I want to manage bank and cc accounts for two completely separate entities.
Hi There...thanks for watching!
Yes...you can link bank accounts owned by separate businesses. There is no magic to this...just make the connection. However, the confusion can arise if and when you use the "wrong" bank account for an expense. You would need to reconcile the transaction with an inter-company loan.
But generally..yes, I suggest connecting as many accounts as QBO has connections for.
@@Incomedigs Thank you for the reply! I should be good then. The two entities don't know each other and I'm only going to access their separate accounts for reconciling anyway. I won't be the one charging anything to the accounts. Thank you again. I liked your video and will keep watching as I have a lot to learn.
Hi Nick, I am looking for a tutorial on merging existing QBO accounts into one. Thanks in advance for any resources available.
Hi Leslie...thanks for reaching out! I don't have anything specific on this as of yet. However, generally, you'd probably make use of "Open Balance Equities" at the start of a fiscal year. This would establish a "starting point" for your businesses. You could potentially use an import tool like www.saasant.com/
It really depends on how much historical data you would want within your new, consolidated QBO account. If you are okay "starting fresh" from a point in time, journal entry would be the easiest route. If you wanted that historical data, you would want to spend some time prepping an export/ import.
I would be happy to help this with a custom project...please email if interested! nick@incomedigs.com
This was very helpful. My husband and I are both artists and I do the bookkeeping for both. I understood that the location would be a good way to maintain two businesses within one QBO subscription but that it wouldn’t work for separate invoicing. Could I simply change the company name each time I wanted to send an invoice to get the correct artist name on the invoice? We are in Canada so wondering also about tracking hst tax separately. We remit separately to the government.
Hi Deb...thanks for watching! You certainly can change the invoice name. However, you can edit the attributes of each location. Go to your list of locations, select one...and click "edit. You will see the option to click "Use a different title for sales forms". This should help to automate the process!
@@Incomedigs great! Thank you. Can we also maintain separate HST accounts by business/location?
@@debmenken3948 Yes! really the same process. You would have a name for each hst account...and track accordingly.
@@Incomedigs thanks so much! I really appreciate your time!
Nick I am using QB Advanced and multiple businesses. Can you setup a USER that could control only one of the companies?????
Hi Mari...thanks for watching. Not that I am aware of. QBO doesn't treat these entities as truly "separate". I believe all your users would have the same access to all businesses/ transactions.
Where can I find the information about the cons of using this method?
Hi Brenda...thanks for watching! We go into this strategy in great detail in our end to end course: Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Generally speaking, the cons of this method are as follows:
- Auto-issuing 1099s from QBO - You can only issue 1099s from one EIN
- Payroll - You can only issue payroll from one EIN
- Keeping your Balance Sheet in Check - It's possible for mistakes in data entry to cause "Balance Sheet by Business" to be inaccurate. Assets do not equal Liabilities + Equity.
I had the same question about the cons since you mentioned them but I couldn't find any other video where you go into detail about that. Can you go into more detail about how to do 1099s and also the balance sheet issue. That seems like it could be a big problem...@@Incomedigs
Excellent explanation, exactly what I was looking for. Do you have this presentation for Balance sheet too?
Hi! Thanks for watching! This will work for the balance sheet as well. We go into this topic in extreme detail in our end to end course: Real Estate Accounting Bootcamp. We also discuss the potential pitfalls of this technique: www.incomedigs.com/reab2
Locations vs Classes. Client has two shipping terminals. Want to track income and expenses, P&L separately. If they write one check for expenses for both terminals, I don't see how you can use "locations" but it seems that classes would work for two terminals and split out the transaction. Is that correct? thank you
Correct. Classes would work for this. Not location:
Super helpful. What about if each of your entities has a different checking account? Do you get into a big mixup there? I have one "parent" LLC with 4 dba's. Each dba has a separate checking account. Trying not to make a monstrosity out of my QBO.
Hi Carine...thanks for watching!
In fact, the more you separate your accounts, the better! This avoids potential hiccups with your balance sheet: E.g. Entity A owns a checking account but pays for an expense for Entity B....that creates a hassle.
I encourage separate accounts...you just need to be disciplined in using the correct account for the correct business.
@@Incomedigs Hugely helpful video! I am dealing with that hassle you mentioned in trying to sort out several expenses that I used the wrong account. I have been very careful recently to not cross accounts, but any tips you may have on how to sort out those few transactions would be greatly appreciated.
@@richardmercado1128 Thanks for the comments!
My favorite way to identify these miscategorized expenses is to draw up "miscmatched reports". Let me explain....
Lets say you have a credit card owned by Business A. Sometimes (as we all do) use use this credit card for expenses for Business B. Create a Balance sheet report with "Business" displayed int he column. When you do this, you should see values hit the combination of Credit Card/ Business. In theory, there should be no value for Credit Card A and Business B. If you see a value there, that means that you have "crossed cards". You can drill down into that number to identify the expenses that need to be reconciled. Your goal will be to have 0 value across all business EXCEPT for the business that owns the corresponding credit card.
Interesting technique, so if I have "holding company A" and "subsidiary B" and "subsidiary C", how would I track all of their business checking accounts with location? Or would all of this information go into Charts of Accounts?
Also in this same example I would have 3 "locations" for the 1 holding and 2 subsidiaries. Each subsidiary would have their own "classes".
Is the above structure correct? If so let's say subsidiary B has 3 "classes"(stocks, forex, crypto) and a few brokerage accounts opened in its name, would each brokerage account be a "customer"?
Thanks for making this video!!
Hi There!
On the business checking accounts, you would have each separate account as a unique account in your COA. It would just so happen that each business is probably only using one of the bank accounts.
Yes, each subsidiary would have its own classes...but keep in mind: QBO will not know nor recognize the "assignment" of classes to each entity. It would be up to you/ your bookkeeper to enter both the Location (Business) and the Class on each transaction. It is entirely possible to make an error and assign a location with a mismatched class.
To your final question: Yes, you could continue to add the detail for each brokerage account. However, this might get a bit complicated to keep up. It is certainly possible, you just want to make sure you aren't overcomplicating the bookkeeping.
@@Incomedigs Thank you for your response!
Would you happen to know how to utilize this feature on QB desktop?
Hi There! Unfortunately, I do not consider myself an expert on QB Desktop. It is my understanding that this feature is not available on QB Desktop...you would need to utilize separate company files. However, if any other Desktop users can correct me...I would be happy to be wrong on this one!
Which version of QBO online do you need? I do not have the "categories" under the account / setting tab.
Hey Phillippe...you would need QBO Plus or higher to make use of Locations and Classes.
I have a separate bank account for each entity. Is there a way to automatically tag transactions to the appropriate company based on the bank account the transaction comes from?
Yes! You should be able to create a rule for each bank account where the "Location" is automatically assigned. You would simply assign a different rule for each account.
Can u use different invoices for different llcs and get the same results?
Hi Poppy. Thanks for watching! Unfortunately the reporting will still be a bit tough. Drawing up a balance sheet/ P&L by entity would not work unless you have that additional "dimension" added to your transactions. In this case, Location tracking checks that box.
I enjoyed your video and it has been very helpful in separating three business entities. The only issue we have at this time is credit card payments show up in the unspecified column on the balance sheet. On the pay down credit card feature there is no drop down for the businesses. The only way I have found to mark them for the proper business is to enter the payments as an expense with the payee as that particular credit card, but not sure if it's good to do it that way. Do you have any advice on the credit card payments? Thanks for your help.
Hi Keith...yes! You have stumbled upon one of the transactions that does not allow for a business. You can simply "categorize" from the banking feed...this will allow you to indicate the business. The same is true for transfers...they will not work if using location tracking.
@@Incomedigs Thanks for your response. If I categorize the credit card payment from the bank feed using the credit card being payed as the category isn't that doubling the expenses already categorized under that credit card?
@@keithdybsetter9713 If the expense has already been categorized under the credit card, QBO will give you the option to "match" it.
"Categorize" will create a transaction. "Match" will identify a transaction and assign the bank feed item to it.
Great video and explanation of how to use QB. the question I have is, I currently have 2 passive real estate LLC both in sperate states and an active Home inspection business. Can you run passive and actives entities in the same QB account?
Hey Rob...thanks for watching...and great question! The answer is: "Yes". You certainly can run both active and passive entities in one QBO account. That doesn't mean you necessarily Should.
When making this decision, it comes down to how similar the operations are of these entities. The main benefit of keeping multiple entities in one QBO account is that you can have a consistent setup for all three: Chart of Accounts, Vendors, Products & Services, Saved Reports. For the two passive LLCs, this would make complete sense. For the Home Inspection business, you might have different accounts that you use....maybe different vendors, etc. In this case, it might make more practical sense to keep things separate.
Also consider whether or not you would benefit from reporting on all three businesses "side by side". With all three in one QBO account, you can create a P&L with "Business" as the columns. This allows you to juxtapose the profitability of each business and compare it to the others. If this is something of value to you, you can certainly add additional consideration to all three businesses in one account.
Ultimately it's up to you. The software can handle the three distinct LLCs.
I. getting ready to start up a small business, but also am doing 1099 contract work for two other companies. I need to be able to track all my expenses separately, so this looks like it should work. However, all three are home based so I will need to divide expenses by 3 and also will need to report mileage for all three separately as well. How would you do that?
Hi Jose...thanks for watching!
I would not divide up the home office expense nor mileage in QBO. These are tax deductions that do not need to be reflected in your actual QBO finances. The same would go for other tax credits/ deductions.
I would track your business expenses as they are actually incurred...and then at tax time, make the necessary adjustments fo your return.
I have a business and personal and am running on one instance of qbo. Can I just filter out the personal checking accounts on p&l leave the business checking accounts and the would produce a business p&l. ?
Hey Stephen...thanks for the question!
It might be possible...but that would assume ALL your transactions for the personal business run through that checking account. That means you wouldn't be able to use invoices, bills, credit cards, etc. But yes, if ALL your personal transactions (expenses and income) run through that one bank account, you would be all set.
I'm trying to determine which quickbooks version to go with. I have two rental property LLCs set up as well as two other side business. Can I do this in Quickbooks Essentials online even though you point out you're using Plus?
Hi There! Thanks for watching! With the two rental properties, you can probably get away with QBO Essentials. As you grow...maybe ~4-6 Rental properties, you may want to consider upgrading to Plus.
With Essentials, you will not be able to manage multiple businesses. You will not have "Location Tracking". You will also need to use Customers to differentiate between your properties...you will not be able to use "Classes".
If you anticipating growing rather fast...you can go ahead and upgrade to QBO Plus right away.
This is great stuff; I too have multiple locations for a staffing company so I might be able to use this. I have a question regarding how to apply a customer payment, can we do it within the holding company or the payment needs to be done on each individual company level?
Hey Eddie...you can do it through the holding company. However, this may require a bit of "clean up" at the end of the year (but not a big deal!). The cleanup would involve "moving" the negative bank funds from the balance sheet of the individual company back to the holding company. When you make this move, you would record an intercompany loan/ equity transaction. The holding company makes the payment on the individual company's behalf. So you are just treating this as if the holding company loaned the individual company the funds.
We discuss this in great detail in our end to end course: www.incomedigs.com/reab2
I have just purchased Quickbooks Online Plus and there is no location label on the location tracking. I can only Add location label on an expense. Will this stop the ability to do what you are showing. Also I need it for the use of a client account as one business and current account as the Tax accounts. You have not mentioned bank accounts in this video.
Hi Margaret,
Thanks for watching! Every transaction type except for "transfer" should have the "Location" field available. Expenses, Checks, Invoices, Bills, Sales, Receipts, etc....definitely journal entries. Make sure to turn it on in Settings.
Bank Accounts should be labelled within the Chart of Accounts. E.g. Checking - Business A, Checking - Business B, etc.
QBO will not know to "automatically" assign transactions for a specific bank/ credit card with a business. That would be done by the user using the location field.
Hey Sir, I have just purchased Quickbooks Online Plus and there is no location label on the location tracking within the setting. Is there a way to change the location label to business?
Have they removed that ability?
@@sparkmyinterest5275 I was just informed of this from another customer. It seems they may have. I would contact Intuit for more details.
Can you have different levels of subscriptions if you decide to separate the accounting and switch accounts?
Yes! You can have QBO Essentials for one business, Simple start for another, plus for another, etc.
By using this hack, then you have to enter it all in manually right? Can't use their direct bank connect transactions?
I have been running personal and business separated by departments. I man need to set up separate books for each. Is there any way to export all of the all ready categorized personal transactions to a new instance of qbo?
Hi Stephen...thanks for watching! I do not believe it is possible to duplicate/ replicate one set of QBO to another....using native QBO features. However, you could potentially use a 3rd part software like Saasant Transactions : www.saasant.com/app-saasant-transactions-quickbooks-online.html
and whats about the chart of accounts.? do we need to create a separate COA for each business or there will be a same COA for all business..?
dilbar masih That’s the beauty of this approach: 1 COA for each business! You can then run a report and filter by Business. You wouldn’t want to use this approach if your businesses have vastly different COA needs. If that were the case, separate subscriptions probably make the most sense.
@@Incomedigs Thanks for your quick response
what is the difference between separate business and class, can we not categorize 4 business by class..? please clear between these two.?
Can you please clarify this one also that what is the difference between splitting up business and maintaining the classes of the business...?
@@dilbarmasih3642 The reason we use "Location" for "Business" is because Location is tracked at the Transaction level...not the line item level. This forces QBO to record both sides of the transaction to the appropriate business. In my experience, Location is best to track by business while class is best for line item level property tracking.
Class Can be used at the transaction level. However, you are now limiting yourself....you can no longer use Class for tracking properties.
If you track at the line-item level, only those specific COA that have a Class associated with them will be tagged w/ the appropriate business.
For example: Say you have a credit Card expense in which you have 2 lines. Each line is tagged to an expense category. On your P&L, those expenses would properly be listed under the appropriate business. However, on your balance sheet, the credit card transactions would show up as "Not specified". Its only when we track an entire transaction to a Location/ Class that QBO tags both sides of the transaction.
May I ask, how do you recognize what expense/invoice is for which biz? Thx so much and thx for the video!
Hi Emilia...thanks for watching!
You would need some sort of native knowledge of the expenses coming into your books regarding which business they were incurred under. Once you understand that, you would simply tag these expenses with the "Location"/ "Business" drop down that appears in the expense/ invoice.
For my business, the best practice is to have as many separate bank accounts/ credit cards as is feasible for each business. This helps me to determine for which business expenses are incurred. Of course, there are the situations where you have one business spending funds from another business's bank/ credit card. But these should be rare and can be reconciled with a journal entry.
@@Incomedigs Thanks!
I finally set up my quickbooks online plus for all my properties after several years' struggling. It's all because of this video! The only issue I ran into is that my expenses are showing as "unspecified" in Balance Sheet Report even though I filled out "customer" correctly. They are under correct customer column in the P&L report though. I noticed that if I change the "Payee" from the actual vendors to a customer, it fixes the issue. It looks like the balance sheet report and P&L report are using different "customer" for expenses. Have you perhaps run into issue like this? (I hope my explanation makes sense.) Thank you so much!
Hey...so great to hear you found this video helpful!
I've run into this a couple times. Are the expenses "bills" by any chance? When you create a bill and don't indicate a company, then apply a payment, the payment gets tagged as "Unspecified"...even after going back and adjusting the "Bill". Beyond that I haven't run into it.
Feel free to send a quick video demo to me: nick@incomedigs.com
My client has an established business and is adding a rental property. Can I start using the business label for the rental and leave the other business as unclassified until the start of the next year, and then add a classification to the original business. Or will that make things messy?
Hi Deanna, thanks for watching! I would try to go back in time and assign every transaction to a business. You want to avoid having "Not Specified" anywhere on your balance sheet/ Profit & Loss. The only way to accomplish this would be to make sure all transactions over time are tied to a business.
You could also use a journal entry as a "quick fix". You can pick a point of time to "move" the balance of an account from "not specified" to a specific business/ location.
Do You Have The Follow Up Video On This? And also you mentioned you were going to discuss more on how to use class as to differentiate between rental and rehabs etc.
Hi There! We cover a lot of these nuanced topics in depth in the Community attached to Real Estate Accounting Bootcamp. Specific examples, deep dives, etc. Check it out! www.incomedigs.com/reab
Could you point me toward the other videos you were going to make to flesh out the strategy you introduced in this video?
Hi Heath. Yes! incomedigs.com/reab
That category field is no longer available under Advanced as of September 4, 2020. How do I add without it? Or have they completely taken that option away?
Hello...thanks for watching! Are you sure you have QBO Plus? This field is available on QBO Plus and above. As far as I can see...it is still available.
@@Incomedigs no I don't have plus
Hi Nick,
Thanks for the video awesome tutorial. Can you please help is it possible in QuickBooks to track seperate business + location wise sales for each business under single QuickBooks entity?
Hi There...thanks for watching! Yes....Just like the expenses demonstrated in this video, your sales transactions will also be tracked "by business". The idea is that your entire P&L + Balance Sheet can be tracked "by business".
Super helpful video. Is "locations" still preferred over "projects," which looks like a new project profit tracking feature in Quickbooks Online plus?
Hi There! I still like to use "Projects"...but not to track business-specific expenses. Instead, I suggest using "Projects" for specific renovations/ cap improvements on a specific property. It is common to have "Many Projects" all within the same "location" or "business".
@@Incomedigs Perfect! Thanks so much again.
Hi,
Do you have any video/training about COS in Q.Books?
Hi Leyla, thanks for watching! Yes, we have a video discussing setting up your Chart of Account for Rental Property Management. We specifically use Cost of Goods Sold for this process. Check it out here: ruclips.net/video/xwO879TAJuw/видео.html
Also, check out our end to end training course, Real Estate Accounting Bootcamp: www.IncomeDigs.com/reab
@@Incomedigs Hi, Can you kindly share the links of all of your training for Q. Books? Thank you
I have separate quickbooks 2009 desktop files for each of several businesses. I want to import all of them into one QB) subscription and set it up as you have. Can I import multiple desktop files into one QBO subscription? If so, during each import can I set all transactions for that import to a corresponding location?
Hi Matt...thanks for watching. I haven't tried the specific technique you are asking about. I have a feeling that QBO would NOT allow you to indicate a location on your import...but I'm not 100% sure. I would imagine you would need to use a third party software to help ensure the Location field is imported. Something like Saasant would help with this: www.saasant.com/app-saasant-transactions-quickbooks-online.html
Hello! I tried to follow your steps and all but when I run a P&L report, it shows 'This report does not have any date.'
Hi there....try starting with QBO's standard reports: Profit and Loss. This will surely have valid date range and show data. Then you can adjust the dates and filter/ establish columns accordingly.
@@Incomedigs @Income Digs Hey Nick, I see values now but only expenses. You see, my boss has 5 companies with 5 bank accounts linked to qbo and he wants the wire transfers incoming from one account to another to show as income. Is that possible? If so, would you know the solution to it? Thanks in advance. 😊
@@donna0224 You could do that....but you would likely need multiple transactions or a journal entry. A journal entry would look like this (Business A pays Business B)
Bank Account- Business A (CR)
Bank Account - Business B (DR)
Expense - Business A (DR)
Income - Business B (CR)
I am using QB online and have 2 different companies, and when I click on the Gear icon - Account & Settings - Advanced, the Categories Section is missing. Is this something QB removed in the most recent updated version?
Hi Stephen...are you sure you are in QBO Plus or above? I believe this option will only be available at that price point or higher.
Hey do you still use this method in 2022? Great video, but is it still relevant? Thanks!
Yes I do...still relevant! We discuss in great detail in our course: bit.ly/reabcourse
Hi Nick,
Is this feature still good to do with multiple entities with all having their own TIN #'s. Looking for your help..
I feel this is very helpful. But QB does not recommend.Thanks
Hi! You are right! QBO does not recommend! They want you to spend $$$ on many many subscriptions. You can certainly do this with multiple entities having multiple TINs...there are just a couple restrictions to be aware of:
1. You will only be able to have 1 "brand". You cannot have various different logos, etc for your invoices, statements, etc.
2. Generating 1099s via QBO - You will only be able to do this from the main, parent account
Remember - QBO is a tool to help you run your business and prep for taxes. Most people have nothing...they have excel. So don't let QBO (or anyone else) scare you off by saying "You must have a different account for different entities". There are no "rules" like this. The IRS does not force any business to use any software. As long as you are reporting accurately on your taxes (which this system can certainly do), you have nothing to worry about.
@@Incomedigs how have you managed through the branding issue? Other than not being able to use a different logo, are you able to invoice using the “business” name?
@@fayenemer7806 Hi Faye....yes, you can adjust your "Sales Forms" to show differently when a different business/ location is used.
Personally, I use an "Umbrella" approach. The main business that holds the subscription is the only business that has a brand facing the customers. That allows me to centralize everything. To the tenants, its all one umbrella property mgmt org. Behind the scenes, I have my separate location setup.
But yes...you can customize your sales forms. In the list of Locations, you are able to edit the attributes of that location when it comes to communicating with your customers.
@@Incomedigs Thank you Nick; this was very helpful.
@@fayenemer7806 You are very welcome!
Thank you for another very helpful video! I have a question on how to apply transferred funds between the two business checking accounts to a category. I have recorded the transfer from checking account A to checking account B. But now in account B, I need to apply that transfer to sales. Let me explain my example:
A deposit for rent was submitted to the wrong checking account (A). So we transferred the money from A to checking account B which is where the money should have been deposited to. Now that the transfer is showing in checking account B, I need to categorize that money to one of the rental units so when I am running reports I can see that money was applied as rental income for that unit. What transaction type should I do here? I tried to do a journal entry debiting checking account B and applying credit to the appropriate unit, which does show the funds applied to the correct unit, but then it shows that money as a deposit in checking account B instead of a payment so my Quickbooks balance is incorrect. Thanks for any guidance!
Hi Erica....good question
Here is what I would do...because we are messing with multiple locations...I would stick to journal entries. You can always still match the banking transaction
Journal 1 - Receiving Rent
Debit Checking Account A...the exact amt. of the rent Paid. Mark this line with Location A. Credit "Rental Income" the exact amt. Mark this as Location B (The business that SHOULD have received the rent. Now...if you were to save this as is, the balance sheets for Location A/ Location B would be off. You need to record some sort of Inter-company transfer. You can setup an asset or Liability account to handle this: "Intercompany Loans". Add two more lines to your journal...each with Intercompany Loans. Debit the exact amount of the transfer...on this line, mark it as Location B. The next line, Credit the Intercompany Loans, mark it as Location A. This will balance the balance sheet.
Now....Location A "owes" these funds back to Location B.
Journal 2 - Transfer the funds back
Debit Checking Account B....exact amt. of transfer. Location B. Credit Checking Account A, exact amt, Location A
Debit Intercompany Loans...exact amt, Location A. Credit Intercompany Loans, exact amt, Location B.
Give that a shot and let me know!
@@Incomedigs Thank you so much for those instructions! Unfortunately I still can't get things to balance. There is only one rental location involved in this transaction. Journal 1 I debited checking account A and left location blank. I then credited rental income and added the location. Then I debited and credited the intercompany loans.
Journal 2 I debited checking account B and credited checking account A and credited /debited intercompany loans.
Where you say to use location A, I left that blank and location B I put in the property location that the rent was received for.
Checking account A balances, the rental location shows the deposit amount applied, but checking account B shows the deposit amount entered twice, once from matching the transfer and once from the journal entry but it has no payment. I tried messing around with the journal entries several different ways but when I got the bank balances to match, the rental income wasn't showing as applied. If you have any other suggestions I will happily try them as this has stumped me for over a month and I haven't had any luck with QBO. Thanks again for taking the time to try to help!
I assume the trial balance have to include every entity as there is no way of separating them like P&L report. If you could verify this, that will be great. Thanks.
Yes...that is coorrect!
Thanks for the informative video! I have created a quickbooks account with 4 different businesses. They each have their own bank accounts and also have their own credit cards. How do I set it up to associate the credit cards with the respective bank account/business?
Hi Jon...thanks for watching!
There is nothing to do in Podio to associate these cards/ accounts with the appropriate business. The best you can do is name them appropriately (e.g. Business A - Credit Card). It will be up to you to ensure that you spend and record transactions from the correct card to the correct business.
That being said, as you work through banking transaction, QBO will start to learn your self-imposed rules and make suggestions for auto-tagging certain cards as a the correct business.
Man that was super helpful! Thank you!
So glad you found it useful! We dive way deeper and provide regular support through our end to end training program. Checkout the bootcamp! www.incomedigs.com/reab2
Is this considered commingling of funds? Do you add multiple bank accounts for the different EINs? Trying to find a way to switch from desktop and still have multiple accounts. thanks!
Hi Melissa...thanks for the question!
I defer you to your tax professional for an official answer....but my CPA supports my strategy.
As for bank accounts, I still try to have my bank accounts designated for certain entities. If/ when I use the wrong card for an entity, I log an "inter-company loan". These loans can get confusing...so I try really hard to use the right accounts for the right businesses.
For reference, I currently have 4 separate Legal entities in the same QBO plus subscription.
@@Incomedigs Thank you for the quick response, I'm so glad I found your videos
@@melissamartins9900 Thank you! If you haven't already, check out everything we have available at incomedigs.com...including our new end to end QBO training: www.incomedigs.com/reab
@@Incomedigs As long as you maintain a separate checking account for each holding entity, think Limited Liability Company, you are not commingling funds. keep a separate account and ledger.
Hey, thank you so much for this video, you are a life saver. I have a question and maybe other have too. On the categories, where it says track classes, which one should be picked, "one to each row in transaction" or "one to entire transaction"?
Hi There! Thanks for watching! I typically suggest "One to each row in transaction". This allows you to split transactions, where appropriate, between more than one property.
@@Incomedigs thank you so much. Your videos have been very helpful. I appreciate you.
Great Video , Im not in real estate but found the video useful for setting up for a non profit. Can I use the "businesses"to track authors / salesman ? normally we need to use the classes to track functional expenses for a non profit 'so trying to see how I can track both - help greatly appreciated.
Hi Leigh,
Thanks for watching!
Yes...that Location field should work for that. I know what you mean...its tough to get "multiple dimensions" of reporting in QBO. You want to be able to just "add a tag". Locations should work for this for sure!
Income Digs thank you !
Hey I was able to add 1⁄2 company but the subscription ran out with the 7 day free trial it won't let me add another payment method for the second company from the second company bank account it's not Give me any options what are they do
Hey! You'll likely need to contact QBO support!
What about 1099’s and the equity for each LLC?
Hi Nancy! Yes...you would not be able to issue 1099's through QBO. You would have to do them on your own. You would be able to track equity for each LLC. You would pull up a balance sheet "by business".
Hello Nick, Your videos have been so helpful to me. I am a new user of QBO. Why should I create an expense when me bank account is linked and all of my expenses are imported? It seems like the expense would be doubled. Can you explain the need for creating expenses?
Hi Candace...great question and thanks for watching!
You are right...if you Add transactions from the banking feed, you may not have a need to create expenses "manually". I often demonstrate with these transactions for two reasons: 1. You may not always have every account connected to a bank feed and 2. Not every field is available on the bank feed as is available on the Expenses transaction. For example, if you wanted to itemize expenses with "Products and Services", you will not get that option on the bank feed. You would need to add the expense "manually". In my business, I employ a process whereby I add most expenses manually...ahead of time. Then, as the transaction hits the bank feed I simply "match" it. Its kind of like a second check/ verification. Now I only do this for expenses directly related to construction. For your typical, every day expenses (office expenses, meals, etc), I simply go to the bank feed and click "Add".
How do I issue 1099’s from each separate business/location? I have one QB account and have 3 separate businesses each with a separate EIN. Please help.
Hi B.C.! You will not be able to issue separate 1099s FROM QBO with this method. You can still do it...you just can't use QBO's automation.You would have to generate the report indicating how much is paid to each vendor from each entity...and then issue the 1099s off of the QBO platform.
This was a bummer for me too.
What I ended up doing was paying just about everything out of one entity (think of it as a "client-facing" entity). I was then able to issue all 1099s out of QBO. I had to offset payments made on behalf of other business with inter-company equity.
i am using QuickBooks desktop pro plus 2021, can i track p&l for all my companies?
Hi William....with QB Desktop, you can have separate company files...all included with the price of the software. I'm not 100% sure if QB Desktop has the "Location" functionality that we have on QB Online.If so, the same technique would be possible.
on the p^&l by locations, I have """business"" and "not specified ": locations. Not Specified is the default, Can i change the name of "not specified to Personal and any thing that is not specified would default to personal.
Hi Stephen...thanks for watching!
Unfortunately, No...you cannot change the name of "Not Specified". What I do is create an extra "Location" for "Personal". I then institute a "100% assignment rule" for the business. Every transaction MUST be assigned to a location. If I run a report and anything shows up in "Not Specified", we need to drill down and correct it. This allows you to ensure your report looks exactly how you want it.
This was so extremely helpful! I have 3 businesses that I want to use QuickBooks for was unsure if I could do it at all. Is there any limitation to reporting when it comes to the different businesses; especially as it pertains to anything that I would need to report for the IRS? Thank you for this video!
Hi Audrey...thanks for watching!
No real limitations...except for the 40 Business/ Class limit on QBO Plus. You should be able to get everything you need as far as balance sheets, P&Ls, etc. One thing to consider is that Payroll and 1099s can only be done from 1 entity. Usually this isn't a big deal...as RE investors will typically have 1 umbrella or "customer-facing" entity through which all of that flows. That's really the only limitation to be aware of!
We discuss some advanced strategies in the comprehensive course, Real Estate Accounting Bootcamp: bit.ly/reabcourse
@@Incomedigs This is awesome news. Thank you again, I learned so much just from watching this 1 video. I'm not in the Real Estate Business but own several businesses whereas I need a financial management system. This will work perfectly
@@audreywhitley1660 Great to hear! Glad you found this helpful!
I was wondering about 1099s. So if you have bills coming in from vendors and you're paying them from 10-15 different companies, they will only get a 1099 from the 1 main company the QBO account is under? Don't the 1099s have to come from the entity that paid the expense?@@Incomedigs
When you hit the 40 businesses and/or classes, what do you do? If you delete or retire a class (property) what happens to the financial data? And does it open up a new spot for a new property? I have a client who flips 10-20 properties per year so that could add up fast.@@Incomedigs
Thank you for sharing, this is really useful!!!!
You're welcome! WE discuss this strategy in great detail in our end to end course, Real Estate Accounting Bootcamp: www.incomedigs.com/reab2
Can the bank accounts be separated as well?
Hi There...yes! You can certainly load up separate bank accounts. In fact, I encourage you to have separate bank accounts for each business!
I am reviewing a client's books and trying to set this up for all past transactions. Can I do that? Or do you recommend just putting the process in place going forward?
Hi Callie...its definitely possible to retroactively establish past transactions to this methodology. It would be a worthwhile effort so that 2020 books could be compared to 2019. That being said, it really depends on the volume of the books. A full year's reconcile can be extremely time consuming. I would estimate the effort and layout the pros and cons to the client. You should definitely be compensated for the extra effort.
Thank you! And I started yesterday. I think this will definitely help. And time worked is definitely being accounted for.
How many locations can I create for one subscription?
Hi Omar...you can create a combined total of 40 classes/ locations with QB Online Plus.
I have multiple LLC's which use the same chart of accounts. I want to give out 1099's by LLC and not through one main company. Can we accomplish that?
Hi Winston, thanks for watching!
Unfortunately, No. You will only be able to issue 1099's using QBO's service from the main company that holds the subscription. This is because QBO doesn't actually acknowledge your other entities...therefore they don't alone those "businesses" to issue 1099s.
Hello Nick! I sent you an email regarding a question on this topic. Can you please let me know if you received it?
Yes! Received and replied!
Thanks you thank you 💯👌💯👌👌
You are welcome! Thanks for watching! Please note: This technique is certainly advanced. We discuss a few specific nuances in our end to end course: Real Estate Accounting Bootcamp: bit.ly/reabcourse
I dont see location tracking in my settings
Hi Ted...Location tracking is only available in QBO Plus or above.
thank teacher
My P$L by departments has stacked my 3 departments' names in one vertical column, instead of one department name per column. How can I fix this?
Hey Stephen....first, you'll need 1 generic account for all your P&L/ Balance sheet accounts. Steer clear of accounts "per department". I recommend creating brand new, clean accounts for each.
Then...you have 2 choices:
1. Go through every transaction and change the account/ location
2. Use a journal entry as of a specific point in time to "move" items from the "old" accounts to the new. Once the "old" accounts are to 0, you can make them inactive.
is this applicable to ecommerce businesses with multiple companies? Each company has it's own bank accounts.
Hi Riza...thanks for reaching out! Sure...you could definitely do this with ecommerce businesses. I find that this strategy makes the most sense when the businesses are very similar: Same COA, same list of vendors, etc. If that is the case w/ your businesses, go for it!
@@Incomedigs Yes, that might help us. But I am thinking on how the sales be recorded. Do you have another videos on how to record the sales following this strategy?
@@rizabio3596 I don't have a video on it...but you would simply tag each sales receipt/ deposit to the appropriate business. If the businesses already have separate bank accounts, it should be relatively easy to create rules for each account through the banking feed.
how do we consolidate accounts in two different entity into one
Hi Deepa. Thanks for watching! i don't think there is an automatic way to do this. Especially b/c QBO is not really "designed" to handle the multiple entities....this is more of a workaround. You could potentially use journal entries to establish a "starting point" based off an old set of books.
How to run/prepare balance sheet by CLASS on QBO?
Hi Amelia, You can display your balance sheet by Class by running a Balance sheet and then adjusting the "columns" to say "by class".
Earned a sub. Great video!
thanks so much for watching!
How did you change "Location" to "business"?
Hi Adam...I've heard this question quite a bit lately. I feel that QBO has removed the ability to change the label! I don't have a definite answer...but given the volume of questions to this end, I think its something that's been removed.
I'll let you know if I hear more.
Have it been removed?
@@Incomedigs Hi Nick, did Intuit respond to your inquiry about relabeling the Location field?
@@fayenemer7806 Hi Faye....Yes! They have eliminated the ability to change the name of Location. In fact, even in my existing accounts that have been around for awhile, it has been reverted back to "Location".
How to add one more company name in one account?
Hey! We cover this strategy in great detail in our end to end course: www.incomedigs.com/reab2
Is it an easier solution if we make each business a Project?
Hi Zonglei, thanks for watching! Projects would not be a sustainable solution. The reporting of QBO makes using Projects clunky and confusion. There are also specific transactions that do not support the "projects" tag as you would need for a business.
I have tried Location, Class and Project. Without a doubt, the cleanest, most sustainable solution for multiple businesses is Location.
Hi. I am in UAE. And currently using qb online for 1 company. I got a job in another company and have to handle 16 companies, it's a group of companies. Can you tell me how I can do this in 1 subscription? Like inter company bank transactions how we can do this. Or I need to get more subscription for each company. Looking forward to hear from you. Thx.
Hi! You don't NEED to setup different subscriptions. The most important part is to make sure that each and every transaction is tagged to a "business". You also don't want to co-mingle accounts used for multiple businesses.
Do you track your personal financial statements this way too or a separate subscription?
Hi Joshua...thanks for watching! I only track my personal finances directly related to rental properties in QBO. I do not manage my overall personal finances in QBO. For that, I prefer a tool like Mint or Personal Capital.
However, for Real Estate, I setup a "business" called "personal" which is used to manage the finances of my personally held real estate portfolio.
Any suggestions on how to do this with Quickbooks online simple start?
Hi There...I'm afraid this would not be possible in Simple Start. You just don't have enough "tags"/ "dimensions". QBO Plus is definitely worth the investment.