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Level 1

If my business flips houses, do I put our company as a customer when using "Projects"?

I've read about using Classes and Items or Inventory (can't remember which) to track real estate/flips, hopefully Projects is also a recommended solution to that. I am going to use the Projects feature to act as job costing, but when you put in a project it requires there be a customer. We buy the houses, flip them, and sell them. So is it okay to put our company as a customer? I guess it just felt wrong because the QB account is for our company already.

Kind of a sub question, we mostly do flipping. But we do some hired projects, and the boss also has personal properties that get worked on. So could I put the customer names as "Homes Awaiting to be Remodeled" and "Hired Projects" and "Personal Properties" as customers? Does that make sense or is this a flawed idea?

Thanks!

 

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Best answer 10-15-2018

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Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

Flipping - This is  a work in progress situation.  Create an asset account named for WIP-address and post the cost of the property and all expenses to that account.  That will accumulate the total cost of the flip.

Create an inventory item for the address, zero qty and zero cost

then use a "check" on the cash account, ...
1.  in the expense section of the check select the WIP-address account and enter the full amount in that account as a negative number
2.  then in the item details part, select the inventory item for that address, set the qty to one, and enter the same amount as a positive number an save (Check is a date entry form, do not print)  that stocks the finished house as an item in inventory with cost.

The WIP account is now zero balance and can be renamed for the next flip.

then you sell that inventory item.

I would create a customer called in-house if you use projects

Hired projects and work for the boss is just regular work, enter the customer name



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Highlighted
Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

Flipping - This is  a work in progress situation.  Create an asset account named for WIP-address and post the cost of the property and all expenses to that account.  That will accumulate the total cost of the flip.

Create an inventory item for the address, zero qty and zero cost

then use a "check" on the cash account, ...
1.  in the expense section of the check select the WIP-address account and enter the full amount in that account as a negative number
2.  then in the item details part, select the inventory item for that address, set the qty to one, and enter the same amount as a positive number an save (Check is a date entry form, do not print)  that stocks the finished house as an item in inventory with cost.

The WIP account is now zero balance and can be renamed for the next flip.

then you sell that inventory item.

I would create a customer called in-house if you use projects

Hired projects and work for the boss is just regular work, enter the customer name



View solution in original post

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Not applicable

If my business flips houses, do I put our company as a customer when using "Projects"?

@Rustler - Tips & Tutorials This finally clicked for me and I was able to follow your process. I have a couple other questions I was hoping you could help with so I didn't have to post yet another question. For step 1 when I write the check to "stock" the item, who do I choose as a payee- my WIP account? And is it correct to view this as "buying" the item so that we have "in-stock" so we can then sell the item? Likewise, when I create a sales receipt for the house when it is sold, would I chose the WIP account as the customer?

One more question! We usually have several flips we work on at the same time. Would you recommend having a master "other asset account" for capitalized costs/WIP and then using sub accounts? Or simply having multiple/separate accounts, one for each property? Right now I have a master acct with sub accounts and then also use class tracking. I just don't know if there is a technically correct way to do it.

THANK YOU in advance if you take the time to read this. Just trying to get my head wrapped around the whole process. Thanks :)
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Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

Leave the Payee blank, this is just data entry.
Yes you buy the inventory item, that sets qty and cost, then you sell that same item
No, you use the customer name who buys it

Just use multiple WIP accounts one per address, once you have "bought" the inventory item and the WIP account is zero balance you can rename it for the next house
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Level 1

If my business flips houses, do I put our company as a customer when using "Projects"?

@Rustler - Tips & Tutorials
So do you suggest using Classes or Projects in setting up this type of Real Estate Flipping business? Which format is better? Your explanation seems to lean towards Classes, but I want to make sure.
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Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

I have not played with QBO projects to see how effective they are (mainly because they are not optional, you turn them on and you can not turn them off - I do not like being dictated to by some lazy software "engineer" (programmer)), QBO should be a tool and provide functions that I use as I need to. (I do not use QBO for a real business)

As I said I use an account named for the property-WIP, I did not mention classes at all.
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Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

" and the boss also has personal properties that get worked on."

"and work for the boss is just regular work"

The "boss" does not get to Benefit from business expenses to their personal property. Sorry. These costs are posted as Work In Process for the person to Repay, or, if the "boss" is an owner, they Took this amount as a draw or Loan. If the "boss" is on payroll, that value is taxable.

Example:

A sole proprietor hires a Painter to paint a flip project and their personal project = the Personal payout to the painter is Draw, not Expense for the business.

You need to discuss this with your CPA for that business.



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Level 1

If my business flips houses, do I put our company as a customer when using "Projects"?

Sorry for the confusion- I didn't mean use job costing on his personal properties, I meant simply for tracking what work he pays people to do on his personal properties- for his benefit. He just wants to see his overall spending on all things each month/year. Thanks for the answering! CPA will hopefully be involved soon!
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Level 15

If my business flips houses, do I put our company as a customer when using "Projects"?

"I meant simply for tracking what work he pays people to do on his personal properties- for his benefit."

Yes, that is what I meant, too. If this is Pays Personally, that doesn't go in the business file. If that is Uses Business Resources for personal, that is what I described = not business expense or essentially a Sale to him or Loan to be repaid.


For a Flipper, I put the Property Name as Customer. I set up Products and Services, all linked to one WIP/CIP Other Asset account. I use the Product and Service on the Estimate, the purchases, and that flows to the Other Asset account while the project is in progress.


Once it sells, you move that value for that One Project from Other Asset to COGS. That's why the customer reporting works for this.


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Level 1

If my business flips houses, do I put our company as a customer when using "Projects"?

I know this is really old, but I'm hoping you'll still respond.  I'm a little confused--I'm using Items on QB Desktop (I think that's the equivalent of Products and Services on QBO), how did you link the Customer (Property Name) to the transactions you mentioned (Estimates, Purchases, etc.)?  For example, I write a check to Lumber Liquidators for $350, I use the Item, "Purchase Costs" down in the Item tab, but where/how do I link it to the Customer "Property Name?"  And, what reports do I use to see the breakdown of costs for each Customer (Property Name)?

 

I set up the different Items as Non-Inventory Part Items.  I used, Purchase Costs, Improvement Costs, Holding Costs, Selling Costs.  I used the WIP asset account for each item.  I thought I understood you, but after setting it up, I don't see how it's connected to the Customer Name at all--what am I doing wrong?  If you see this, thanks for any help you can give.

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Moderator

If my business flips houses, do I put our company as a customer when using "Projects"?

Hello, @davandbar.

 

You can link the Customer: Job to an Estimate and Purchase Order in QuickBooks Desktop. When creating an Estimate, select the Customer (Property Name) on the Customer:Job field. You can then link this when creating an invoice. 

 

 

When writing a check, you can enter the property name on the Customer:Job column. From here, you can select if this is billable or not.

 

 

 

For more details, please refer to this article: Tracking job costs in QuickBooks Desktop.

 

Then, you can pull up Job reports to identify the cost for each customer job. Just go to the Reports menu and select Jobs, Time and Mileage.

 

If you have other questions and clarifications, do let me know. I'll be around to help however I can. 

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Level 1

If my business flips houses, do I put our company as a customer when using "Projects"?

Thank you for pointing me to the correct report area.  When I first tried to add the Customer in the Customer Column, I couldn't find a corresponding report to show any details of the transactions.  I was able to use the Item Profitability report in the section you recommended!

 

I have another question or two--Rustler, the poster who gave the "Best Answer" recommended:

 

Create an inventory item for the address, zero qty and zero cost

then use a "check" on the cash account, ...
1.  in the expense section of the check select the WIP-address account and enter the full amount in that account as a negative number
2.  then in the item details part, select the inventory item for that address, set the qty to one, and enter the same amount as a positive number and save (Check is a date entry form, do not print)  that stocks the finished house as an item in inventory with cost.

The WIP account is now zero balance and can be renamed for the next flip.

Then you sell that inventory item.

 

Can I use his method to move the asset over to an inventory item and still be able to see the Item Profitability report breakdown as I currently see it now? Or, is there another report that will provide that detail once I convert it to Inventory for Sale?  I need to keep those details for my CPA.

 

Thank you in advance--I really appreciate your help!

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