Add Accounts Receivable Purchase Agreement Initial with airSlate SignNow

Add Accounts Receivable Purchase Agreement initial

[Music] hey this is Nick from income dudes welcome back to another awesome video tutorial we're going to continue on with QuickBooks Online and specifically talking about rental property management within QuickBooks Online so following up on the other videos if you haven't watched them all yet that's okay this is kind of a standalone one but I would recommend you at least check out some of the videos we put on for invoicing your tenants we're gonna continue with that today we're gonna talk about accounts receivable so any property management business is collecting rents okay whether you do that yourself so you own and manage your own properties or you're just a property manager you're certainly working to collect rent from your tenants that's almost you know that's one of the key things that you're doing alright and in my opinion QuickBooks Online is an awesome tool to do that it's built with a great accounts receivable functionality you know I'm gonna dive into that today and talk through how you can use the built in functionality of QuickBooks to manage your AR or accounts receivable alright so let's get into this we're gonna look at my sample company here income Diggs property management and right off the bat as I'm looking at the dashboard on QuickBooks Online it shows me an invoice summary which I love okay so this shows me that I have you know twenty five hundred dollars not due yet but 1700 overdue and I can click into this and see that this is one of my favorite views to go into is just my invoices view and you can get to it in several different ways you can also go sales invoices and do it that way another way is you can look at your what you have do by your customers so you can just go to customers and this is a neat way to see you know how much is overdue and how much is open in total what I love about this is I'll use this to run my no cash flow analysis so I'll say you know how much rent do I still have outstanding that I can expect at some point in time and we can click into this to drill down I'm gonna do that so I quicken to this and drill down I see that Wendell Johnson has one overdue invoice if I click on this it's going to show me the list of all their invoices looks like there's one for March 1st there's one or February first that's not paid yet and if I click into that I can see what's going on here so this one is for their their monthly rent plus a security deposit and it hasn't been paid yet okay so I would want to understand that kind of on some kind of schedule basis and for my business I'll go into this toward the end of the month so what I do is I'll create invoices so for here I'll create invoices right now I'm at today's date is you know 27th of February and so I might go in here and say what's coming up to be due soon and then as we get into the month a few days laid out I'll see who's late and who needs to send me rent well we can do with these is we can select all and send those invoices or send reminders to our tenants which is a great little task you know if you want to do it yourself but a VA can do that as well is to run send invoice reminders on some kind of cadence okay so that's in general you know how this can be set up and so let's just look at how we would receive payment for these invoices now I recommend you use QuickBooks Online payments because for ACH transfers it's free and it comes right in and would record that the payment has been received so free bank transfer you have to set up what account would go into a course but ultimately that that invoice will show it up paid let's say that you're getting paid through some other method maybe you're using Cosi or rent Matic or you're you have some kind of way to get a payment you're getting a cheque you're getting cash anything like that you would go into QuickBooks and Mark a invoices paid kind of manually right you would say that I received this cheque so you would select the invoice and then click receive payment that's one way to do it another way you can do it is just to start from the customer okay so I'm here at the customer let's say I'm at Wendell I can go up here great little summary is showing me right here what's open what's overdue I can just go new transaction payment and it's gonna bring me up an empty payment where if I tell it how much it's for 1700 it's gonna guess that it's probably for that invoice right you know probably say yes in where to deposit it to and save and close it and then it'll disappear as an overdue invoice now I only have the 850 that's open okay so let's go back to our invoices here and just see what I have going on this is currently all of my invoices you can see this one is zero it out there's nothing owed on it yet and this 2550 is also not due yet it's gonna be due on the first of the month okay how does all this look on your balance sheet and you know what I'm going to do quickly I'm going to get rid of that I'm going to cancel that payment out all right so one payment made I'm going to grab this I'm going to delete it just to show on reporting how this looks all right so where does accounts receivable show up on your balance sheet well it's an asset right and so I'm going to show up if you're using accrual accounting okay so there's always a question about accrual versus cash accounting all right now cash accounting is what you have to use for taxes the IRS requires you to use cash accounting meaning you can only recognize income or expenses when the cash actually changes hands so what that means is if I were to have an invoice for a customer that is like December of 2018 they owe me money if I'm using accrual accounting I recognize that income in December if I don't get paid till January than in cash accounting I would not recognize that income until January ok it's a really important distinction for taxes I tend to prefer accrual accounting for my day-to-day running of the business and I and I can convert over to cash when I need to report for the IRS all right so looking at this accrual balance sheet for this year I'm able to see my fixed assets which we went over in the various other videos about how to track your assets and your depreciation I'm going to bundle that up for now and you can see that I have an accounts receivable of 40 to 50 so I have open accounts receivable of 40 to 50 now this is for all year so something that's important to keep in mind if I were to do this for this month you're gonna see that number change right and why did it change it's because some of those invoices are marked as March 1st okay so the this is only up till the 28th of February those don't show up here but if you do them for this whole year those would show up because they're contained within the year this is a great way if you want to see like what's going out those accounts receivable of course you can use those reports that we were just looking at but you can also click in here to drill down and to understand here's the different invoices you have now if we were to receive a payment on this like I did before I'm going to show you do it one more time receive payment save and close it you'll see how that gets reflected in your accounts receivable here's the invoice here's the payment it zeroes me out right and then starting on March 1st again I increase i debit my accounts receivable with all these other invoices going out to my tenants all right now remember you can invoice for it doesn't have to be revenue right we invoiced wendel for a security deposit and so how do we understand that that hits not a rental income but our security deposit not all has to do with products and services okay so I encourage you to set up your products and services when you set up your properties your products and services is simply the lists of products or services that you sell now we talked about how the construction costs will work the rental income is probably a little bit easier to understand this is really just your your listing of rent so if I have a new property I'll probably set up one two three main street you know unit 1 unit 2 the different monthly rents I'm getting even the security deposits and how we map that to our chart of accounts is all in the set up so I were to look at the security deposit 1 you can see that the income account goes to 1 2 3 means treat security deposit right and whereas these other ones go to rental income all right so I'll encourage you to when you have all your units so let's say you have a property 3 unit set up a service for each of those rents now the sales price is recommended and it'll pre populate your form but you're not set to it so let me show you that so if I were to take let's say 4 5 6 Maple apartment a create invoice for that right let's say I just go new invoice I'm not sure we the cost is there but let's just say it's Jack all right let's just say this is an invoice for first of March again all right all right now I can just start typing at four five six Maple apartment a Brad it's going to pre-populate the rate and I can just write into your monthly run but I could adjust this if I needed to you can also add different services like ladies let's do that I don't have that currently in my setup so let me show you how that would happen so let's pretend that that this customer hasn't paid we need to charge in a late fee what we would do is maybe it's like after a grace period you can start typing late fee and I don't have it in my products or services yet but I can add it on the fly add that service of late fee you could create a new category for late fees if you wanted to and maybe it's like $20 and the income account maybe it's late fees okay and if I do that it's gonna pop up my chart of accounts income and you can just say something like that and that would allow you to differentiate between your standard rental income and your late fees all right and sometimes when people do is like here's one late fee for being late on the you know a fifth of the month and then beyond that you have like a daily late fee where it's maybe like two days worth at five something like that might be the case right and you can manage all that stuff right here on QuickBooks and then at any given time see your accounts receivable what you're owed all right so that's a really great way to do it now I do want to show you on the balance sheet we have our security deposits remember the security deposit is a liability you technically o that back to your tenant once they move out barring any kind of you know work that needs to be done so do you return that security deposit right I'm gonna show you exactly how to do that so I tend to like journal entries for that so if I were to say with the one customer in mine has a security deposited they were to move out and I would to return this I can do that simply by writing a check to them so I can go up I can do expense I can do check whatever the case might be and I can log it to my customer okay category I would do one two three actually I might start typing security deposits right one two three main security deposit and I can say return security deposit and that would be eight hundred fifty bucks all right save and close and you'll see that that falls away from my security deposit it's now zero doubt if I can click into this I can see what happened here here's when I got the security deposit here's when I paid it back now you can also within this you could say this is the wrong wrong way right here's when I paid it back you could also within this say that there was some some some things that happen some repairs and maintenance that you had to incur now you I like to do this with a journal entry you could probably do it with a cheque as well but I'm gonna void this one for now I'm gonna delete it just show you real quick how to do that with a journal entry so if I wanted to pay this back but they still owe me some money for repairs and maintenance right so how would I do that I'll go journal entry whatever the date might be let's go security deposit you're giving the entire security deposit back right you're gonna debit the entire liability no matter what you're giving it back okay now you could say that you're gonna write them a check from your checking account for 850 but I'm not gonna do that because let's say that they clean the carpets and it cost me 250 bucks that means I'm only gonna pay them 600 back okay now where is the other $200 gonna come from well you could log it as a refund to repairs and maintenance but you could also put it as a revenue item to say like retain security deposits now keep in mind the different states have different rules about how you have to document all this on I'm not getting into that with this video I'm just showing you the accounting for it but if you wanted to you can set up an income account for you could set up let me see the income account forward retained security deposits it would show up as revenue for you because it in theory it should be offsetting your repairs and maintenance and you could record it just like that so your security deposit it's gonna clear your balance sheet and on your actually know let's go to our profit loss for this month we're gonna see the retained security deposits there alright this was a roundabout way to showing you how many different things you could do in QuickBooks with accounts receivable there's so much so I was responding to a lot of specific questions about that but keep them coming I want to know what you want to learn about this I find QuickBooks to be an awesome tool for managing this of course if you have a lot of tenants it can become difficult but because there's a lot of data entry but the cool thing about is you can also integrate with the other systems specifically you can integrate it with something like podium and I'm gonna show you exactly how to do that I'm gonna show you how within podio you can manage your properties your tenants and when they reach a certain status you can automatically create the products and services and QuickBooks you can automatically create invoices and QuickBooks when the invoices get paid you can reflect it back on the PO do it can integrate these things all together and automate a lot of this data entry it's super exciting it's like the holy grail of of what you want to be doing right PO do is super good for operational you haven't used it yet I'm gonna show you some awesome stuff with it and QuickBooks is super good at accounting we can combine those things together with some integration so I'm gonna show you that on some of the upcoming videos but in the meantime I'll know exactly what questions you have about what I showed you what other things you want to see with managing rental properties managing clips and rehabs within QuickBooks Online alright I'll talk to you guys on the next video thanks [Music]