Quickbooks configuration for flipping multiple properties

[Ben Wagner]

I am looking for some insight into how others are tracking their finances for doing multiple flips. We are currently using a custom-built system to track receipts and expenses by property, but are considering switching to Quickbooks to have a more comprehensive view of the entire business - things that are not related to a specific property, such a payroll, rent, etc. and be able to keep track of money that frequently gets moved around between different accounts/entities.

I've been reading about how everyone uses Classes in Quickbooks to track P&L by property, storing property purchase and associated expenses as a "work in progress" (WIP) current asset and then changing those to COGS when the property is sold. This is great while the property is under construction and I can see how much money has been spent on construction, utilities, etc. right on the balance sheet. However, once I make the journal entry to convert those WIP assets to COGS, I can no longer see how much was spent in each of these categories for deals that have been sold - we like to look back and see how we did on certain deals. Do people create COGS accounts that correspond to the WIP current assets accounts so that all the categorization persists after moving from WIP to COGS, similar to below?

WIP-Inventory - Current Asset

-- WIP-Landscaping

-- WIP-Construction

-- WIP-Utilities

COGS

-- COGS-Landscaping

-- COGS-Construction

-- COGS-Utilities

I have also seen some people talk about using Items, but I am not sure of the Pros/Cons of this approach instead.

Lastly, is there a good way to manage estimated vs actuals for things like construction costs so we can see how we faired against our estimates?

[J Scott]

I consider all costs COGS from the get-go, but broken down into sub-accounts like you have above.

Obviously, the costs aren't really COGS until I sell the property, but I let my accountant handle that at the end of the year.  For the properties that haven't yet sold, he does a Journal Entry to record the total costs to WIP; that entry is reversed once we sell.