I have an existing business "A" and am starting a new business "B". The ownership structure is such that company A owner has a significant portion of company B but another entity has ownership of B as well. This means that company B can not be a subsidiary of company A, so has to be its own entity which entails that it has to file its own tax return and have its own set of books.
Both company A and B have commonality in customers, industry, etc. and all sales are via ecommerce. So the simplest solution from both a technical and logistics standpoint is to go to market via company A website. This also gives the products from company B immediate legitimacy since company A is an ongoing business. Also, having one website provides for a more seamless customer experience, such as one shopping cart, payment gateway, user account, etc.
So with the above in mind, my first thought is to set up a class for each company in company A and assign products (inventory) to them. When an invoice is generated by my ecommerce system and pushed over the class will be auto assigned and the revenue allocated per class, same with COGS. Gets a little tricky with assigning COGS for inbound shipping, outbound shipping, etc. Still trying to sort that one.
Company B would be set up with its own QBO company account and would essentially mirror the class B in company A with exception being each product would be non-inventory and have a different cost and price. The flow would be company B places a purchase order with vendors with company A receiving the product in to inventory. Company B then invoices company A for either cost plus or list price minus some agreed upon rate.
Is there a method where I can just mirror the books from company A, class B to company B? Trying to figure out how to assign costs for overhead seems like it will get downright impossible pretty quickly.
One issue I see here is that company B would essentially carry almost zero fixed costs meaning that as long as something is sold by company A there is a guarantied profit. So company A could still end up taking a loss for the year but potentially be on the hook for corp income taxes on company B. Maybe it balances out anyways?
Or would the most straightforward method just to set an agreed commission for company B and then monthly just run a revenue report for class B and have company B invoice company A for the commission. Basically the books for company B is nothing more than a few transactions annually.
Hoping someone else has come across a similar scenario.
