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Level 1

Shared expense allocation among multiple related entities

I have a client with multiple real estate entities/properties.  He pays some shared expenses (e.g., a bundled mortgage) that requires appropriate allocations among the entities -- some are on the same QBO "file" and a few are not.

 

Is there a recommendation for how best to routinely record these allocated expenses without having to create a ton of due from/due to entries for every single payment?

 

3 Comments
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QuickBooks Team

Shared expense allocation among multiple related entities

Hey there, Bob770. 

 

Thanks for dropping by the Community today. I'm happy to help. Below I'm including the steps on how to create an expense as well as an article showing you the difference between bills, check and expenses. Check them out:

  1. Select + New.
  2. Select Expense.
  3. In the Payee field, specify a vendor. You can specify the name of a person or a business. If your transaction covers multiple petty cash expenses, leave this field empty.
  4. Select the Payment account to which to credit this expense.
  5. Enter the date of purchase in the Payment date field and specify the Payment method for the expense.
  6. (Optional) You can use the Ref no. field to enter an identifying number from the purchase receipt. (Note: QuickBooks Online Plus users: When location or class tracking are turned on, additional fields for Location or Class appear. You can turn on location or class tracking features in Account and Settings on the Advanced tab).
  7. (Optional) Enter a description of the expense.
  8. Enter the amount of the purchase and any Tax paid (if applicable).
  9. Select Save and close or Save and new.

Before you Save and close, you have some options to consider that could help track the expense:

  • If you are billing this expense to a specific customer, select the Billable checkbox and enter the name of the Customer. Billable expense tracking must be turned on to see the Billable column. You can turn it on in Account and Settings on the Expenses tab. Note: If you later receive a credit for an expense that was previously billed to a customer, be sure to specify that customer on the credit and select the Billable checkbox or the customer will be billed for the expense on the next invoice, and the credit will not appear.
  • To see a report of income vs. expenses for each customer, you can run an Income by Customer Summary report.
  • Enter any note or Memo you want to appear in the Register, on printed checks, and on reports that include this purchase.
  • Use the fields in the Item Details section to enter information about the product or service purchased.

You can see these steps and much more at the following link: Enter, edit, or delete expenses in QBO

 

Also, here is the aforementioned article about bills, checks and expenses

 

If there's anything else we can help with, were just a click away. Thank you for your time and have a nice day. 

 

 

Highlighted
Level 1

Shared expense allocation among multiple related entities

Thank you Nick.

 

Makes total sense.

 

What I omitted from my question was that, in the case of a mortgage, for example, the mortgage liability is represented by an amount allocated and shown on each entity's balance sheet on day 1. With each passing month,  Company 1 pays the mortgage, P&I, and has to spread that over the other 4 companies, recording part interest and part reduction in debt.

 

Any suggestion as to how to deal with this?

 

 

Highlighted
Moderator

Shared expense allocation among multiple related entities

It's nice to see you here again, @Bob770,

 

To add up with Nick's answer, tracking your income and expenses for different departments is made easier using the Class or Location tracking. These two features will let you run through account balances by department, business office or location, separate properties, or any other meaningful breakdown of your business, and other segments you want to keep a close eye on.

 

To turn these features on, follow the steps below:

 

  1. Tap the Gear icon and choose Account and Settings.
  2. Go to the Advanced tab and pick Categories.
  3. Check the Track classes or Track Locations to turn on class tracking. 
  4. Select Save and then Done.
  5. When creating a new transaction related to the mortgage, just fill in the Class or Location field to include them on your reports. See this sample screenshot:

When you run financial reports, simple include the class or location by clicking the Customize option. See this:

 

To learn more about these features and tutorials, check out these links:

 

If you have further questions about this or need anything else with QuickBooks, let me know by adding a comment below. I'll be right here to help you. Have a great rest of the week.

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