Good afternoon. I am redoing our records for our past rental property investment business. We use a property management company that collects rent each month and sends us a check for the said rent less any maintenance/repairs they paid out as well as their property management fee. I also have other expenses that we pay on our own throughout the year (mortgage, taxes, insurance, etc.). I have generated invoices in Quickbooks for each month's rent (and created classes to correspond to each invoice and expense). I then make a payment for the same amount as the rent was, leaving the payments as 'undeposited funds'. I've also entered all expenses from the management company as well as our own expenses that have incurred throughout the year. I created two separate checkbooks (one being our internal account and the other labeled checking - property management company). All expenses are allocated accordingly to who paid for each expense. After I've entered everything for the year, I'm left with a negative balance for both of my checking accounts and the total gross rents under my 'undeposited funds' account. The net of these equals my profit/loss for the year. I'm wondering how I should go about transferring the undeposited funds account into my checking account. Do I "make a deposit" each month or at the end of the year to reconcile? Since the leftover profit would be going to my internal checking account, do I put it all there? This means my property management checking would always show a negative balance. I just want to make sure I do everything right from the start, as I'm going back a few years and want to make sure everything is done accurately going forward. Also - do I need to somehow add in retained earnings or year end profit after each year?
