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Hello everyone. I have been a Quickbooks desktop user, but I have a new client that uses QB online for her business. I have been set up as accountant on her QB file, and we’re up and running. However, she just mentioned today that she would like me to track two other businesses as well. What would be the best way to do that with QB online? From what I have read, I would need to set up three distinct company files? Is that correct? Also, if she had used one credit card for personal and business (three businesses) expenses, what would be the best way to track those transactions with QB online for the three entities?
Appreciate any insights…thank you.John Kennedy
johnk@jkmoneymgmt.comI took a class from a CPA who was teaching Quicken desktop and the three files vs one file with three business question seems to have an answer that depends upon how the businesses are treated from a tax perspective. I cannot answer the how to do it with a single credit card for business and personal, but obviously with three businesses she would be encouraged to have a separate business credit card used only for business purposes.
John,
I’m also not as proficient with QuickBooks Online, but my understanding is you have to pay for three separate subscriptions there. The best deal I’ve gotten as a ProAdvisor is $5/mo per “seat”.
As far as your question about personal/business credit card usage- gets messy, doesn’t it? My husband and I are guilty of that in our own businesses. No matter how hard we try, there are occasions where the lines get crossed. Since all three of our businesses are LLCs and income passes through to our personal tax return, my solution has been to set up “capital contribution to/from” (equity) accounts in all three company files. I set up the credit card account under our largest company file, and track the expenses across the companies through the capital contribution accounts. If personal expenses are incurred on the card, they get marked as Owner Draws.
We use a hosted version of the QuickBooks desktop version (Enterprise) through Right Networks so that we get cloud-based access to our file. It is worth looking into if your client has the budget for it. I just like the capabilities of desktop so much more!!!
Good luck!
Thank you both for the feedback. My research has me leaning towards the 3 subscriptions with QBO. My other idea is the use of Quicken Home & Business which allows for tracking of personal as well as multiple businesses I believe. The complication there would be collaboration or sharing files between client and myself. I think that might present problems.
Unless the client wants to run their businesses on cash basis, I’d hesitate to use Quicken. It says it does accrual basis, but it is a little clunky for me. The business reports in Quicken don’t look at all like an accountants reports out of QB would look like. In addition, you cannot set up Owner Draw and Return of Capital accounts in Quicken which you can do with QBO chart of accounts. Sharing Quicken files between yourself and client can create headaches of maintaining synchronization and which file is authoritative. We’ve got some QB experts in AADMM so I’d also wait for them to weigh in to give you more data points for your decision.
Hi John.
I am a QBO Pro, so I would be happy to try to answer your questions.
If the 3 businesses are all DBAs under one Corp, then you could use the same QBO account. However, if they are 3 separate corporations or have different stake holders then you would need 3 different QBO accounts.
QBO does have a deal for accountants where you can purchase 5 accounts for $5 each – but you do have to purchase all 5 at once and it needs to be for new accounts. They are also currently offering a $5 deal for second and 3rd companies for one client, but it is a limited time deal and then reverts to full price (or wholesale).
Going forward she needs to get different credit cards for each business, and certainly for personal. Unless they are all just DBAs, in which case it is still advisable but not as necessary.
For the past, I would use “Capital Contributions to/from” for each business as Kim suggested, or Owner Draws or Shareholder Draws depending on the type of business. But then you have to manually enter the transactions in the correct accounts.
For Businesses I would not recommend using Quicken personally.
I’m happy to answer any more questions if you want to email me.
Best,
Cari
info@CarisCustomOrganizing.comThanks again everyone. QBO definitely seems to be the best option, and I am going to go that route. Cari, I may have to take you up on your offer with follow-up questions, but I think I have enough to get started right now.
Hope to meet all or some of you at the conference in St. Louis!
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