Hey, it's Candus and in today's QuickBooks tips and tricks
I want to teach you about if you have multiple entities,
and you are borrowing and lending money and transferring money between all of them.
How do you handle that in QuickBooks?
It's a common question I've been getting asked lately,
where companies have multiple entity structures, and they're transferring
money from one to the other, depending on where has the cash flow at the moment,
I will give you a disclaimer is I am not a CPA,
I'm an entrepreneur.
I've mentioned that before in my videos,
I always recommend checking with your CPA,
or your attorney and making sure that all the things that you are doing are legitimate
transfers between your companies,
and ask if you need
documentation ahead of time agreements, all that kind of stuff
done.
And if this is how your CPA wants it taken care of,
but I'll teach you
what we call a workaround within QuickBooks.
So right now I have two QuickBooks
data files open.
One of the companies that we're gonna use today as a sample file is Confidence with QuickBooks,
which is the one I typically use with you guys and the other one is gonna be Larry's,
you'll notice I made it purple to kind of
differentiate between the two for you,
Larry's landscape and gardening.
So the first thing you're gonna do is inside each company within QuickBooks,
you are gonna create a bank account.
To do that, you're gonna go in your list,
Chart of Accounts.
That's where I'm sitting right now.
Go down to the bottom to account,
click on new,
you're gonna select bank account.
Click Continue.
The first one, you're gonna call it
Intercompany,
show you, right here.
intercompany transactions,
it looks like this bank account
intercompany transactions, that's the first step.
The second step we're gonna do is create
whatever the entity is called,
in this example, its Confidence with QuickBooks.
And I'm gonna make that a subcategory of intercompany transactions.
The reason I'm doing that is so that I, one
have the main categories intercompany transactions,
I know what that is, that means
I'm transferring money between two bank accounts.
But I'm not gonna totally reconcile and enter every one of
Confidence with QuickBooks transactions
inside
Larry's landscaping.
So what you're gonna do is you're gonna go in, and you're going to create
a subcategory
for each, which is a bank account
for each individual
company that you're transferring money from,
and money to.
So inside Larry's, I would not have one for Larry,
because I already have Larry's checking account down here.
But, now I'm gonna click on Confidence with QuickBooks.
Inside of here in the chart of accounts.
You'll see I have one for Larry,
do you see that?
here, I'll move this down. So you see one for each,
this is Larry's,
this is
Confidence with QuickBooks.
Okay?
Just watch, I'll teach you what you do.
So what's happening throughout the years, money's getting moved in money's going back out.
It's a constant transactions from one to the other.
So instead of creating a notes payable, and a notes receivable
and entering each transaction and trying to adjust it,
we're gonna use a bank account,
basically, is a clearing account, it's gonna track all the ins
and all the outs.
And then at the end of the year,
you're gonna do an adjustment to zero it out.
And it's either gonna go on the balance sheet as
a payable.
So if
Confidence with QuickBooks
had lent,
Larry
more money than Larry could pay back,
it would become an asset,
another asset
in their books.
And Larry would have
a liabilities showing he owed confidence with QuickBooks at the end of the year.
So at the end of the year, you're gonna go you're gonna figure out where it's at.
And then if you want a video on that, let me know.
And I'll create a specific video on how to do that side of it.
But for today, I'm only gonna teach you how to move the money
in and out where you would
track it on each books.
So,
we're gonna go in first,
here to Confidence with QuickBooks,
and we're gonna say that confidence with QuickBooks wrote
Larry money,
okay?
It's kind of a complicated topic.
So
sorry, if I'm confusing you,
but just trust
do one, do the first step,
first step,
go into each company,
create an intercompany transaction,
or some people call them, intercompany. It depends
which
way your entities are set up,
you create that,
and then you're gonna create a bank account
for each individual company that you're
either lending or borrowing money for
inside of the company, you're inside of QuickBooks.
So,
how many companies is Confidence with QuickBooks either lending money to
or
borrowing money from,
and you put that there,
okay, that's the first
thing.
And this really is if you're
not necessarily paying interest,
at the time you borrow the money,
this is just transferring money back and forth between entities.
No interest is being paid at the time. Okay?
Just keep it super simple.
So
we're gonna go into Confidence with QuickBooks checking account,
we've already created the accounts.
So if you're transferring the money directly online,
the easiest way is to go under banking
transfer funds.
Pick the date,
see which
account it came from is gonna be from Confidence with QuickBooks,
if you're transferring money into Larry,
you would then pick Larry and put the dollar amount.
Let's say it's $2,000.
What this is saying is
Confidence with QuickBooks in this bank account, because we're in their company file in QuickBooks.
From this checking account, we lent money
to this
particular
bank account, okay.
And then we click save and close, that's the easiest way to do it.
And I highly recommend you could put a memo in if you want,
I'm not gonna worry about classes at this example,
then I will go into Larry.
And you could do a transfer
into Larry, which is basically making a deposit.
So it's coming
from
Confidence with QuickBooks
to
Larry's checking account.
And we're gonna do it for the same date.
Now the problem is because this is a sample file,
it's not gonna like that date ooh, we need to put the dollar amount in
$2,000.
And you hit Save and Close.
They doesn't like it because it's a sample file.
So it's in
in the future, so I'm gonna click Yes.
And so now what you'll see is there's $2,000
that Larry borrowed from Confidence with QuickBooks
that's were it came from
and inside Confidence with QuickBooks.
if you look at the chart of accounts,
you lent Larry
$2,000 and it came out of your account.
So you would do that throughout the year
and then at the end of the year, you would do one transaction.
If you need me to create a tip and trick on that,
let me know.
I will create an additional video and then I will put it
if I get enough requests. I'll put the
information at the bottom
of this video so that you can find that video as well.
If you enjoyed this tip,
please don't forget to SUBSCRIBE and SHARE it
if you know somebody who needs it.
And as always, if you're needing help and specializing with QuickBooks,
one on one,
I have a
link down below where you can book an appointment with me.
I have webinars coming up
that I teach all this fun stuff on live, where you can ask me questions live.
If you're interested in the webinars I have coming up.
Don't forget to look for that link in the description down below.
Have an amazing day. Thank you for being here.
I hope this helped you.
Take care
bye-bye.