I've been running a small (non-R.E.) business for many years, so I'm no stranger to what it takes to manage a small business's finances. I'm also no stranger to Quickbooks, because that's what I've used for decades.
But, there are some unique details about R.E. that make me wonder if there's a better option besides Quickbooks.
If a landlord holds multiple properties and each one is in its own LLC, you probably should use a separate Chart of Accounts for each LLC in order to avoid piercing the corporate veil. (In Quickbooks Windows, this would mean a separate data file for each.)
And yet, there are portfolio-wide considerations that you want to take into account: Some expenses will be spread across multiple properties (for example, your BP and Rentometer membership fees, right?).
Also, while you should regularly run reports for each property to determine your profitability and cash positions, I also want to run portfolio-wide reports to view aggregate trends for the entire portfolio. And so, keeping each property in a separate Chart of Accounts might not be convenient.
Got any thoughts on this? What do you use to manage a portfolio of multiple LLCs? How do you keep your cash and your books separate, but make it easy to view aggregate portfolio data? How do you arrange things to keep the corporate veil whole?
QuickBooks is the most commonly use accounting software nowadays for small businesses. I switched to it in 2002 and had an auto repair business as well as a IT software business on it. Had I used accounting software gear towards real estate, such as Buildium, I would have to find accounting software for my non real estate business, most likely QuickBooks. Then why not do everything with QuickBooks.
Back then, I didn't know how large or busy these businesses would become, and figured someday I will have to get someone to do bookkeeping. Around here, QuickBooks bookkeepers I could easily find, Buildium bookkeepers, not many though Buildium can be used with QuickBooks online.
For chart of accounts, I don' understand your question. It's only an organization of your accounts, assets, liabilities, and equity accounts. I worked for billion dollar companies, worked on accounting software that has hundreds of subsidiaries. It's not unusual for some subsidiaries using the same chart of accounts among, meaning their accounts are organized the same way. So yes, LLC A can have the same chart of accounts as LLC B.
I hear your complaints about splitting expenses. I used the QuickBooks memorized transactions lists, and used memorized transactions to split recurring fees. Usually the periodic fees are the same and you just have line items in the transaction to split the expenses by class code. Sometimes, you have to figure out the split on a spreadsheet by percentage, such as water bills, and copy the numbers into the memorized transaction. At one time, by another method, I had a management company for my real estate, and each property pays a monthly management fee, the management company pays the various fees, and there's no need then to split expenses such as Rentometer fees. For smaller number of properties though, memorized transactions work best.
I'm in NY, and attorneys and insurance people tell me that when lawyers sue, they sue the entity as well as the owner so the corporate veil doesn't help. The attorney I spoke to about methodology of maintaining the corporate veil, he laughed and told me they get after you for negligence. My auto repair business was in an LLC, I had a slip and fall, and the customer had his tough as nails lawyer get after me, for negligence, not how I keep my books. Did I say "sorry it's an LLC". I told the lawyer "my insurance company handles the whole thing, talk to them". Gave the guy the number. After six months, the customer came crying to me that his lawyer is not taking his calls anymore. I called the insurance company claims guy and I was told "yes, the jerk attorney called, and we put the calls on file. Either he gets tired or he'll sue". I told the claims guy the customer attorney is not returning his calls anymore. The insurance guy laughed, and said "Great, it's usually turns out this way".