Quicbooks journal entries for saving for taxes and insurance?

Question

Hi all,

We self manage our properties and save monthly for taxes and insurance for all of our properties. I can't seem to figure out a way to get journal entries correct in Quickbooks to keep track of each property.

Tenants rent goes into an operating account, and after expenses are paid out of the operating account we initiate a transfer to another checking account that holds all funds for taxes and insurance for all of the properties. When it comes time for tax or insurance payments we write a check out of that account for said payments. I'd like to be able to keep track of the balance each property has sitting there for these tax and insurance payments.

I've tried to set up an "Other current assets" account to tag each payment, ex. 123 Main St. Escrow, but after making the transfer from the operating account to the other checking account the resulting balance for the 123 Main St. Escrow account shows up as $0 since there are two sides to each side of the transfer, thus cancelling it out.

I am obviously not a Quickbooks expert, but it seems like I'm missing something simple in my process.

Anyone have ideas? Thanks in advance!

Dan V. · Answer

@Chris McHaney You can do 2 ways:

1. Vertical approach. Setup each property escrow as "sub-account" of the escrow bank account (ie. Escrow Bank:123 Main St Escrow) and use the sub-account when you book the transactions (Transfer from Operating to Escrow Bank:123 Main St Escrow, then pay expenses by writing a check from Escrow Bank:123 Main St Escrow and code to expense). I prefer this approach because it will give you a quick overview of the balance for each property escrow just by looking at chart of account or running a balance sheet.

2. Horizontal approach: Follow what @James Landon said using class. This is also a good option but you will only see the balance by property when you run balance sheet report by class.

Taylor Brugna · Answer

@Chris McHaney

1)When making the transfer to the "escrow acct"-Debit Escrow/ Credit Operating Acct

2) When actually paying taxes insurance- Debit Insurance Expense Credit Escrow Acct.

On a separate note, you should try to avoid JEs for stuff like this because it is not the best way to keep a "trail" in the system. QBs is very form based and has many features that will keep better track of transactions than a JE will. I try to only use JEs to make year end adjustments such as depreciation or if I didn't property record my amortization on a mortgage.

Quicbooks journal entries for saving for taxes and insurance?

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