Investor · Charlotte, NC · Member since 2008 · 217 posts · 12 votes
I have a number of rentals held in an LLC, and an S-Corp for flipping and general expenses. A friend told me to set up "jobs" for each house. I am going to hire someone to set it up, but I wanted to get a consensus of the best way to do this.
I am a completely tax/accounting/quickbooks novice, so pretend you are explaining this to your 90 year old grandmother. :)
Dan,
You can do this by setting up "classes" and subaccounts for each property. This gives you the advantage of being able to pull out all the info (P&L, balance sheet, etc) specific to each individual property if you want, as well as having all your REI accounting in one place - to easily hand over to your tax preparer/CPA each year. If you are hiring someone to set this up for you, then they should understand exactly how this works and be able to explain it to you using your specific properties as examples. You may want to consider setting up one set of books for the LLC and another for the S corp - especially if there is different ownership interest (partners etc). You'd still want to do classes and subaccounts for each property though.
Dan,
You can do this by setting up "classes" and subaccounts for each property. This gives you the advantage of being able to pull out all the info (P&L, balance sheet, etc) specific to each individual property if you want, as well as having all your REI accounting in one place - to easily hand over to your tax preparer/CPA each year. If you are hiring someone to set this up for you, then they should understand exactly how this works and be able to explain it to you using your specific properties as examples. You may want to consider setting up one set of books for the LLC and another for the S corp - especially if there is different ownership interest (partners etc). You'd still want to do classes and subaccounts for each property though.
Note that setting up a separate set of books in QB can all be done with a single copy of QB. The books for each entity are simply saved into a different set of files for each entity.
I just went through all this with my rentals. I had a great Quickbooks expert set it up for me and then was trained to do it on my own. It's best to have a professional set it up first, as they are familiar with general accounting practices, classes, accounts, expenses, etc. I can recommend mine, if you want to send me private message.
Tim, would this be the same as setting up "jobs"? That's how someone described it to me. I was told that Quickbooks 2012 for MAC may not support jobs, does anyone know if that is true? I bought the software but I haven't the slightest idea how to check this.
Using classes is different than setting up jobs. Jobs are tied to a customer - usually used more in retail or service companies. EX: You're a manufacturer that makes ABC widgets, now your biggest customer wants you to make XYZ widgets, you can set up a job that tracks the performance of the new XYZ widget - for that customer.
With classes, you simply designate a class (ex: Brick House, 123 Main St.) with any/every tranaction that is associated with it. When you turn class tracking on - a drop down box will now appear on every transaction screen (ledgers, bills, invoices etc), then you just pick from whatever property (or class) you need. This allows you to say "show me a report (P&L) that only shows transactions with Brick House (or whatever class). I've actually used QB with my manufacturing company as well as my RE deals. I've used 'jobs' in the manufacturing co. because I was tracking a particular customer job. I've never used 'jobs' in RE because there really isn't a customer involved - I suppose I could set myself (owner) up as a customer and do it. But using classes always seemed easier to me. I'm using a slightly older version of QB so I'm not sure if the newest supports jobs or not.