Quickbooks Online for Rentals with Multiple LLCs

[Monica Kovalsky]

I recently converted to Quickbooks Online for 2 main reasons: 1) peace of mind in case my computer decides to crash 2) may eventually hire a virtual bookkeeper so thought online would be easier.  

I thought I could just track each LLC in a separate class but accountants keep telling me I need a separate QBO company for each LLC which requires another paid subscriptions. Bottom line: doesn't make financial sense to me.

No one however has been able to explain to me in a way that makes sense (at least to me) why I can't use classes for each LLC? I think I heard it has something to do with the balance sheet but it appears to me that QBO has Balance Sheets by Class so I don't see the issue?

Can anyone help???  Thank you!!

[Michele Roberts]

While technically it's most correct to keep each legal entity in a separate QBO file, you can certainly either use Classes or even Customers to track each property separately.  If you use Customers, I would then set each Lease up as a sub  customer and each Tenant up as a subcustomer of that.  

A good QB ProAdvisor will understand how to set this up and how to run reports by class or customer. You should have a separate bank account for each LLC though and it is important not to commingle funds. Any transfers that you do between properties will need to be considered Intercompany (or "Due To/From") transactions. It can become a bit tricky, but it can be done.

I would actually suggest that you consider another software to handle this though. We use Buildium to manage our clients' accounting, and they use it for the Property Management aspect.  You can also use AppFolio or others.  We like Buildium though.  If you choose to track it in QBO, I would suggest using the "Customer/Subcustomer" route rather than classes. 

Thanks,

Michele