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How to set up A/R Accounts for Property Management for New York

How to set up A/R Accounts for Property Management for New York

Q: Hello Gita. I’m an Advanced QuickBooks ProAdvisor with a property management client. We’ve set up our items to differentiate between residential and commercial income. On the top of the invoice screen, there is another drop down menu set for A/R. Should we set up a sub account for commercial and residential property as well?

Unfortunately, I need to separate the income and accounts receivable for commercial and residential property. In New York, there is a special real estate tax filed for commercial properties, so most accounts want income and accounts receivable separated to easily calculate this tax.

A: When you create multiple Accounts Receivable accounts, it makes it difficult and complicated when you receive payments towards the invoices. Instead I would recommend use only one Accounts Receivable account. Create two additional items separating the residential rental and commercial rental, which you can then make them taxable or non-taxable.

If you would like to track how much is owed or earned from residential income and commercial income, you can create a customized report by the item. Or you can use Class to separate the income and accounts receivable for commercial and residential properties and modify your reports accordingly.

A quick note – just try this in a sample file and review your customized report.

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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