We are a house flipping business new on QBO and we have few ongoing projects in progress since the middle of 2021. I was taught to run my expenses under COGS to hit my P&L, then on the end of the project transfer everything to Asset. That way I would be closing the project and number would hit the Balance sheet. However the end of the year arrived first, and if I understand correctly, I have to Transfer everything to Assets now.
Now, I am confused.
So, P&L only works for Projects that start and end on the same year? All my P&L will be inconsistent from now on? or there is a work around that? or perhaps I am doing something wrong?
Also, If I really have to do that now for the end of the year, I will have to do again on the end of the project? Transfer twice, that would be the right way to do it?
Please any help is much appreciated.
Thank you very much.
Well I disagree, payments you make while flipping the house is an asset at that time. I prefer to use a cash type account named for the address and post all expenses to that account. Then when the house is ready for sale, create an inventory type item named for the address, zero qty and zero cost. Then buy the inventory item from a dummy vendor you create, paying for it using the building cash type bank account. Then when you sell that inventory item the total cost will post to cogs, and the sales price will post to income as they should
Thank you for replying to my question.
However, I got more confused, since you gave a whole different method of work. It seems I have to change a whole year of work to fix my current problem.
Do you have any online material or link that you can share, which may help me try to understand, learn and change what I have?
Once again thanks a lot for your help.