Quickbooks reports

16 Replies

How can I get quickbooks to show me all the cash in and out of a property that I bought, fixed, refi'd, rented, refixed, and sold? I am trying to come up with some IRR calculations on some deals I have completed.

There may be a way, but I don't know what it is.  

For a flip, everything goes to COGS (and therefore is on the P&L) and you can just assign a Class to every property and then run a P&L by Class.

For a rental property (which you seem to have), the purchase/rehab/resale will go to the Balance Sheet and expenses will go to the P&L -- I don't know a good way to reconcile those in a single report.

Clearly, my rambling didn't answer your question...sorry...

Promotion
Baselane
All-in-one Financial Hub for Rentals
Still using Excel to manage your rental finances?
Simplify rent collection, bookkeeping, banking, reporting, and taxes. Less stress, higher ROI.
Learn More

@Larry Flanagan

What you want to get, Larry, is impossible. Not because of QuickBooks, but because of general principles of REI bookkeeping. Recording a rental property for tax purposes never matches the cash in/out flow. You either use QB to record cash, and then it becomes useless for taxes - or, like most investors, you record transactions for tax purposes, but you will not see a true in/out cash. It will require manual recalculation, sorry. Your job is a little easier since the property has been sold, but it still requires some manual number crunching.

J Scott gave you an excellent tip on using "class" feature of QB. It will not completely solve your problem, but it will make it so much easier. Besides, you need to use classes anyway - one class per property plus a general class.

Hello Larry, let me see if I can help a little.

If you don't have a CPA or an Accountant, then you really have to know how to setup everything according to the law, financial law, accounting reporting, etc.

For landlords we use a Schedule E. For Corporations we use a Schedule C, etc. That's pretty simple to do in QuickBooks, but you can't merge a Schedule E with a Schedule C.

Since most of you young whipper snappers are into everything regarding Real Estate, it makes your life pretty tough when it comes to keeping track of all the stuff you do, but I think I can help you.

Most Landlords, Investors, have CPA's and Accountants doing their taxes at the end of the year. Therefore, we, as investors and landlords, don't want to have to worry about how to setup our data into QuickBooks as though we were Accountants. We just want to see how much money our investments are making us and whether a proprety is making us money or causing us grief, and at the same time have our Reports be user friendly for our Accountants when it's time to turn over that data at the end of the year for our taxes. And we can do that in QuickBooks. In order to do that we first we need to setup our properties as a class.

*Setup all your Rentals that you own as a class: Call this class Rentals

*Setup all the homes your purchased and want to Flip as a class: Call them Homes Purchased

*Setup all the homes you sold: Call them Homes Sold.

Then list all your properties individually as a sub class of each Building.

Class

Rental

17394 Evergreen

8252 Wisconsin Street Apartments

Unit 1

Unit 2

Unit 3

Unit 4

18632 Braile Stree

Flippers/Purchased Homes

2456 Hartwell

1920 Asbury Park

Sold Homes

12345 Happy Dance Lane

6789 Money Drive

You see my point!

Foot Note:

(I never use the COGS theory because I always had a CPA doing my taxes at the end of the year). All I cared about was how much money the property had cost me, how much I spent to fix it up, and how much I made when I sold it)

By listing each property individually as a class and each unit individually per building if you have a mutli-dwelling, you are able to print our reports showing you the income per building and/or unit less expenses, per building and/or unit, giving you your bottom line, per building/per unit.

The Report that will give you this running total is called a Profit and Loss Report by CLASS!

This report is your very best friend.

You want to know exactly how much money you spent on repairs for that building, and each unit inside the building, because tenants do damage to their units and by showing expenses per units, will be evidence proving that you did indeed take care of that repair that the Tenant is telling the courts that you didn't take care of.

You want to see how much money you spend solely on a building, like a roof repair, verses how much money you spent on tenant damages, that they did themselves to the building or the unit. Evidence...Evidence...Evidence. And also you need to know what homes are making you money and what homes you should sell.

I never setup my flippers as COGS. We are landlords and investors and we don't have Inventory. I don't consider my flippers to be Inventory. COGS is always an Income Account. Therefore I want all my expenses pertaining to that property to show up as expense accounts and not as a negative income account.

Once again since I have a CPA handle my taxes, I just want a good reporting system that tells me what I need to know and at the end of the year give my CPA all the things he needs to know.

So I hope this helps and I wish you well in all your endeavors!

Nancy Neville

@Account Closed  Nice breakdown, wish I could vote for it twice.  I am meeting with my book keeper this morning to start setting up the books for our business.  We started our NP notes business a few months ago and I don't want to have a huge box of stuff in December.

We expect that our business will include rentals and or sales of homes we have to FC on so this was very helpful prior to my meeting.

Originally posted by @Nancy Neville:
...I want all my expenses pertaining to that property to show up as expense accounts and not as a negative income account.

Once again since I have a CPA handle my taxes, I just want a good reporting system that tells me what I need to know and at the end of the year give my CPA all the things he needs to know.


Are you saying that you expense everything related to your rental properties?  Including the purchase and rehab costs?

If so, you're creating a bunch of extra work for your accountant (many of these costs go to the basis of the property -- on the balance sheet), as this isn't the way he'll need to consider the data for tax purposes.  and he's likely to change everything anyway.  Once he's done with your QB file for tax purposes, I don't imagine that you'll be able to do a P&L by class to determine your bottom line (since he will have moved many of your expenses to the balance sheet).

I use QuickBooks for me. My CPA never touches my QuickBooks. He doesn't alter it, or see it. He only see's the reports I generate from QuickBooks at the end of the year.

QuickBooks is an accounting software program for me. Now if I were to use it to file my own taxes that would be a different story. Whatever he does on his side of the fence, I don't care. I only care to see what houses are making me money and what houses aren't.

Originally posted by @Nancy Neville:

I use QuickBooks for me. My CPA never touches my QuickBooks. He doesn't alter it, or see it. He only see's the reports I generate from QuickBooks at the end of the year.

 Ah, got it.

I was confused, as most people I know who use QB just give their QB file to their accountant at the end of the year to make things easier and the accountant will modify the file to track tax data from year to year (creating inventory, WIP, etc).  

But, if you're just using QB for yourself, then I agree...just treat rentals like you do flips (everything is COGS or Expense, so everything goes to the P&L)...that will make everything look as if it's cash flow and expense.

So let me see if I can make it simple. Just a disclaimer before I add my 2 cents. I am not a CPA nor file tax returns (used too). So immaterial who is filing the tax returns, you are responsible to check you reports and then double check them again for accuracy. You are the one who knows what your bottom line is. 

I would recommend, to either give the QuickBooks file (accountant copy) or detailed reports so they can determine if you have classified all money coming in and paid accurately and accurately depreciate it. Tax is not only about your properties but also your other personal income. 

Rule of thumb for accounting, bookkeeping, reporting ..

  • Loans are Liability (Balance Sheet)
  • Purchase of property (Balance Sheet) - watch out for expenses that can be deducted for rental properties ( that is why you need to speak to an accountant)
  • Sale of property (Profit & Loss)
    • Transfer all money from Balance Sheet to Profit & Loss
    • Follow the HUD to double check the balances and make adjustments
  • Money Spend:
    • Flip
      • Rehab (Balance Sheet)
    • Rental
      • Maintain properties (Profit & Loss)
      • Capital Improvements (Balance Sheet)

Of course there are more steps - this are very basic. As to using QuickBooks - always use Classes for all your properties. Review your cash flow by property as well.

@J Scott @Account Closed  

I heard of another feature in QuickBooks that is similar to classes called projects (or jobs).  I was told that classes are long-term, and projects/jobs are short-term.  If so, does it make sense for flips to be projects, and rentals to be classes (as opposed to everything being a class)?  Have you guys ever heard about this before?

Originally posted by @Nghi Le :

@J Scott @Account Closed  

I heard of another feature in QuickBooks that is similar to classes called projects (or jobs).  I was told that classes are long-term, and projects/jobs are short-term.  If so, does it make sense for flips to be projects, and rentals to be classes (as opposed to everything being a class)?  Have you guys ever heard about this before?

 Is there a way to do Reports based on Projects?  The benefit of using classes is that it's easy to segregate individual projects within a report...

Promotion
Vacasa
Vacation Rental Property Management
We do the work. You get the ROI.
We do it all for your vacation rental. All—marketing, pricing, guest requests, housekeeping & more.
Free income estimate
Originally posted by @Nghi Le :

@J Scott @Account Closed  

I heard of another feature in QuickBooks that is similar to classes called projects (or jobs).  I was told that classes are long-term, and projects/jobs are short-term.  If so, does it make sense for flips to be projects, and rentals to be classes (as opposed to everything being a class)?  Have you guys ever heard about this before?

 I assign a class to every job, that way you can get at the data from either perspective.

@Larry Flanagan   here is a little more info on using a class for each property. Normally you would assign the property class to any expense or income to that specific property.  Any capital costs like purchase price or capital improvements would be put into a separate account for the property.

If you assign all costs of the property including acquisition and capital improvements and the income at the sale of the property to a class it will give you the information you need to calculate IRR by running a class report subtotaled by year.

Normally I expect most people only assign a class to the income and expenses, and they do not assign a class to capital expenses. Doing it this way would not help you calculate IRR. Does this make sense?

Originally posted by @J Scott:
 Is there a way to do Reports based on Projects?  The benefit of using classes is that it's easy to segregate individual projects within a report...

 Yes, there is!  The "Profit & Loss by Job" report should be right above the "Profit & Loss by Class" report.  If you don't see it in your QuickBooks, maybe this feature was added in later editions (not sure which edition you're using).

The only thing is that Jobs have to be under Customers I believe.  I'm guessing you call this customer that holds all the flip jobs as "Rehabs"?  Not entirely sure on that.

I like David's approach to assigning a class to every job as well.  Maybe a "Rehab" class.  A little bit redundant, but adds flexibility.

Always keep in mind the end goal. What reports do you want to see, analyze and review on a regular basis, at tax time, when you need a loan... etc.  Here are few things to ask yourself before starting to use QuickBooks?

-- What is are you worth? 

-- What is the equity on each property? 

-- What is your equity on all your properties (your business)?

It all depends on what your goal is, how your it is set up, what your enter where and when. 

There are only two predefined reports for Class:

--Profit & Loss by Class

-- Balance Sheet by Class (available only in Accountant and Enterprise version)

Here is a list of predefined reports you can view when using Job: