Flipping Houses - Journal Entries in Quick Books

[Michael Smith]

Hey BP! I'm currently mid-way through my first rehab, planning on building a scale-able business and turning over at least 5 properties next year.

Up until now my Chart of Accounts in Quick Books has been set up to handle accounting for my rental properties, but now that I am entering the flipping space I need to make some adjustments.

I'm wondering if I should count the purchase and all materials/labor as WIP and then move those costs over to COGS at the time of sale? Or, would it be easier to enter everything as COGS upfront, and at the end of the year move everything from COGS to WIP for any properties that will carry over into the next year?

Also, what is the best practice for identifying properties for reporting purposes? For my rental accounting I currently set each property up as a Customer and a Class, with tenants as Jobs. Is there a better way to do this for flipping, or will the same system work?

Thanks!