how to transfer between accounts

I have a customer how frequently transfers money between his two separate LLC’s to pay bills.  To document the transfer in Quickbooks Online he simply completes a transfer from one LLC to the other using an Inter Property account.  For example, let’s say he transfers funds from Business A -Checking to Business B – Checking.  To document it in QuickBooks Online he goes to Plus (+) Sign then clicks Transfer then shows funds transferred from “Business A- Checking” to “145 Inter Property Account”. He then completes another transfer from “145 Inter Property Account” to “Business B - Checking”.  Once the online banking transactions are downloaded he then matches the transactions.  Is this all that needs to be done?

He is bad about depositing checks from his tenants to the wrong checking account.  When he transfers the funds to the correct business account he also does it the same way listed above.  Is that correct?  Can’t he simply transfer directly from Business A Checking to Business B Checking since it was deposited in error?


Answer

You first have to enter everything for How It Applies, stand alone.

What is the right of this person to Remove funds from the LLC? Ignore what it is being used to do.

"Is this all that needs to be done?"

There is no such thing as InterProperty.

This is supposed to be One FEIN per file. There are only the real bank accounts that exist for this FEIN. So, the money out, is either Equity Draw, or Borrowed from the LLC.

Then, for the Other LLC, in its data file, this is either Equity In, or Lending To this LLC.

"He is bad about depositing checks from his tenants to the wrong checking account."

When you discover this error, that Entry is made as "Other Current Liability" = deposited here, but not the funds that belong to this FEIN.

And when you pay that out to the Right entity, they process it as the Rent they expected.

"When he transfers the funds to the correct business account he also does it the same way listed above."

Which is Wrong for the accounting. He's treating these like Piggy Banks; but these are LLC = legal entities.

"Is that correct?  Can’t he simply transfer directly from Business A Checking to Business B Checking since it was deposited in error?"

No.


You cannot treat Business A and B as the same entity. Example:

I accidentally get a check meant for you. Does it make sense that I would use some transfer account? My accounting is supposed to show the Why Funds are moving around. My deposit is My Liability to send the money to You.



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