QuickBooks Online For Landlords

are you a landlord who wants to have total control  over your property's financial records well then   you need to watch this video QuickBooks Online  for landlords it's the only video that will show   you that QuickBooks Online is easy to use  and will give you clear property Financial   reports if you simply know how to use it  as a landlord or a rental property owner   my name is Mark smolen I'm the founder and CEO of  worldwide QuickBooks I personally guarantee you   the clearest possible explanation for every topic  that you could possibly need to use QuickBooks   Online to manage your rental property finances  that's right QuickBooks Online is better than   any other software because it can do all your  property bookkeeping fast and easy this video   is going to show you exactly and precisely how  QuickBooks Online is used for landlords and once   you input everything in the way that landlords  do you will get financial property reports that   help you manage your tenants rent your tenants  deposits and you'll even be able to generate a   profit and loss by apartment so you will be able  to tell who is costing you money that's right you   can track expenses by apartment or unit with the  same software that gives you all the other normal   Financial records and reports that any type of  company would need when using QuickBooks Online   it's fast and easy and this video will prove  to you that QuickBooks Online is better than   any other rental real estate software for managing  property records and getting beneficial reports so   you can manage your company all you have to do is  watch a little of this video every day and follow   along with me step by step and you will have all  the knowledge and skill you need to use QuickBooks   Online to manage your rental property units and if  that's not enough you will still have the benefit   of a live teacher because I answer all my students  questions immediately all you have to do is leave   your question in the comments section below and I  will do my best to help you that's right you can   get everything you need right here on YouTube from  this video and it's all free free three [Music] so what exactly do landlords need to manage  the financial records of their properties   well we know that landlords will use QuickBooks  Online differently than the way a normal company   would and that's the reason why we need this  tutorial you see landlords get paid before they   give the service that they get paid for that's the  opposite of the way a normal company would work   but we all know tenants pay in advance before they  stay in the unit that's why additional property   records are needed when you're a landlord as  compared to any other type of company that would   use QuickBooks Online you need a specific set of  Records to manage rental units for example you   need a report that shows the tenants rent balances  each individual tenant should have a separate   report that shows each of the rent invoices that  you earned by having the tenants stay in the unit   and compare to each of the rent payments that the  tenant made for each of those months by having all   of their rent invoices and all of their payments  on one report for each tenant you will be able to   see at any given moment how much each individual  tenant owes you and clearly see the reason why   and you also need a similar but separate  report to manage the tenants deposits   you should have a report that shows  each individual tenant's deposit balance   you should be able to show the tenant exactly  what they gave you as a security deposit when   they moved in and on the same report show  every expense that their deposit was applied   to so that when you give them back the  amount they're entitled to they clearly   understand why they're getting the amount of  deposit return that you're going to give them   and for those of you who have many units to rent  it's very important to generate a profit and loss   by apartment or unit so you can always compare  for each of your rental units the income from   that unit compared to the expenses and repairs  that the unit is costing you this way you can   tell if you're actually making money by renting  and if so how much and you should be able to have   a separate report for each individual unit and  each individual tenant so you know exactly what's   going on with your rental property units all of  the records that we just spoke about a moment   ago must tie in to all the other normal reports  that a company would use to manage their finances   so QuickBooks Online will give your company  a trial balance a balance sheet a profit and   loss just like any other company would use but the  additional records that I mentioned will match and   tie in and change along with your normal Financial  reports and then you will have everything you need   you can sign up for free all you have to do  is look straight at this video and below the   video there's a description field and in order to  get the link to sign up you have to go to the end   of the text in the description field and find  the show more button if you click show more it   will open up the rest of the description field and  there you can see right under the first paragraph   is the link to sign up click on it follow the  steps and you'll have 30 days to use the free   plus version to be able to follow along and  learn with this video you should also know   that the table of contents is also in the same  description field and the table of contents will   list every topic so that you can have an easy time  navigating this video in fact it's very convenient   because if you're interested in one specific  chapter that you'd like to review all you have   to do is click on the time index of the chapter  that you'd like to see in this video and YouTube   will jump the video over to that time index and  that chapter so that you can conveniently find   what you're looking for and study at your  own pace and on your own schedule foreign [Music]   chapter 3 signing up for QuickBooks Online   now you may well ask how can I sign up for free  for QuickBooks Online well all you have to do is   go to this link and make sure that you sign  up for the plus version of QuickBooks Online   once you go to the link all you have to do is  input your email address and choose a password   that's it so here I am at the link provided and  you can see you have the opportunity to sign up   for either Essentials Simple Start Advanced or  Plus is the most popular because it has the most   important features and a landlord would need  either Plus or advanced you have to make sure   that you click the button over to the side of  the free trial for 30 days rather than the 50   off because the free trial and then clicking the  plus version here will give you the opportunity   to have the plus version for free for 30 days so  you can follow along step by step with me click   choose plan now we want to click continue without  payroll and after that you'll have the opportunity   to put in your email address and password and then  once you do that you'll click sign up with email   and then you'll be asked a series of questions now  regarding the questions they ask you when you sign   up we want to expedite the process of signing up  so we can go ahead and study how to be a landlord   and use QuickBooks Online so most of the questions  that they're about to ask you are not relevant   we will answer the questions in a way that get  us into QuickBooks Online the most quickly and   we will give the simplest answers just to expedite  the sign up but don't worry we can always Circle   back and change any answer we gave during the  sign up if we need to later the first thing   you'll see is a welcome message preparing you  for the set of questions they're about to ask   then when you click next just click the cursor  into the field and type the name of the company   and the example name that we will use for  our landlord's course is Pat the landlord   so all you have to do is type it into  this field and of course click next then the second question they ask is how  you've been managing so far and we want   to click past these questions so to make it  easy we click nothing I'm just getting started and then of course click next   now it's asking you an irrelevant question what  industry are you in you could type in some letters   and explore the different options but for us  we're going to save time by clicking skip for now   and then of course click next now it's asking  us the ownership or Equity structure and   we want to keep things simple so we will  click sole proprietor and then click next   now it's asking us how the company makes  money landlords actually provide a service   to their tenants so in order to properly  set this up we click services and then next   and in order to have permission for everything  right at the very beginning the simplest choice   is to tell QuickBooks online that you're  the owner or a partner and just click next   now of course we're going to say that we  work alone because we're not going to deal   with payroll or employees so to make it simple  just click next and now we're at the point where   the answer to the rest of all the questions  will just be skip for now just scroll down   and click skip for now and when they finish  asking us to activate features that we may or   may not need we will get into our QuickBooks  online account and see what it looks like and once you see the button that  says let's go just click on it   and you'll be finally taken to  your QuickBooks Online interface   here you can start exploring and  experimenting with QuickBooks Online   just close the welcome message and you're ready  to go chapter four navigating QuickBooks Online so what exactly are you looking at when you first  join up with QuickBooks Online well some people   will be lucky enough to have QuickBooks Online  set them up in something called business view but   other people will be randomly selected when they  sign up and be given accountant view now those   are the only two possible views that you could  see when you first sign up with the QuickBooks   Online plus version you see if you're looking at  accountant view the left panel will look like this   but if you were unlucky enough to be assigned  business view when you signed up it will look   like the panel on the left now with accountant  view all the menu choices are written out clearly   but if you were unlucky enough to get business  view you have to click to open a sub menu in order   to get the rest of the choices and that's why in  this course we will be looking at the interface in   accountants View and don't worry I'm going to show  you how to switch between them in a moment and   it's very easy but no matter what you're looking  at in QuickBooks Online there will be always three   things that will be the same first you will always  have a cog wheel in the top right corner of your   interface and the cogwheel will always open a set  of menu choices and these menu choices are all   about setting up and maintaining the usage of your  QuickBooks online account so that's the category   of choices when you click the Cog wheel in the top  right however if you click the plus sign in the   top left the menu that opens up there is a set of  sub menus that allow you to record and enter the   day-to-day transactions that you have when you're  running your business pretty simple so far however   the third place that you need to know to click on  is the left panel and the left panel has mostly   repeats of the same windows that you can open from  either the Cog wheel on the right or the plus sign   on the left but there is one thing that you have  to click in the left panel for and that's to find   the QuickBooks Online reports in fact the left  panel is the only place where you can click to   get the QuickBooks Online reports and the reports  are the most important Windows because they are   the windows that not only show you the results  but they actually allow you to easily find and   fix any of the transactions that you recorded and  that's the way we're going to do it in this course   you see once you get into business view all the  shortcuts in the uh dashboard that you're looking   at that are next to the control panel they're  all the same shortcuts to the same windows that   you can open up from either the cogwheel or the  plus sign in the left but these shortcuts that   are here on the dashboard change all the time  whereas the menu choices from the Cog wheel and   the plus sign tend to stay the same so if you  have the plus version you can just click on the   Cog wheel here and you will see this menu open up  and when you look at the nature of the choices you   will see that this is about setup and maintenance  however if you click in the top left you can see   clearly that the menu choices presented here are  all about the different types of transactions that   different companies would make and you'll notice  the panel on the left reflects the accountants   view where everything is written out clearly  that's why I recommend you keep your settings   in the accountants view so that you can easily  get to the reports menu which is literally the   most important menu choice in all of QuickBooks  but in order to change views from business view   to account view you need to know a little bit  about the QuickBooks online account settings   you see the settings in QuickBooks Online are the  defaults the options the preferences basically the   settings are the automatic behavior of QuickBooks  Online unless you specifically State differently   and we will adjust the very first setting the most  important setting that you need to know at the   beginning we're going to change from business view  to accountants view just by clicking to open up   the menu from the Cog wheel and then look in the  bottom right where it says switch to accountants   view or business View and then you will see the  interface change here watch if I click on the Cog   wheel it says switch to business view so I give it  a click and I wait a moment and you can see that   we have this very abbreviated and confusing  main menu with icons and sub menus and so on   but if you click in the Cog wheel and you go back  to switch to accountant View then you can see a   nice clear left panel where the sub menu choices  are much easier and it reflects much more like the   old interface and QuickBooks online but you still  need to learn more about the accountant setting   because all the other settings that you would  need to change in QuickBooks Online are in the   account settings window and the account settings  window you open from the Cog wheel and one of the   menu choices is account and settings now in  the case of a simple small company the only   setting that you actually need to change is the  name and address of the company and whatever   you put there will show on the reports and the  documents that you print from QuickBooks Online   and you can always go back and change the  name and address right there in the same area   so here's the example company address it's  Pat the landlord 1700 Prospect Avenue East   Meadow New York 11554 just as an example okay so  watch you click the Cog wheel and then you click   account settings and if you had a complicated  company you would have to go through each of   these choices and set the settings for the uh  difficult things that uh complex companies need   but in our case we have a simple company so  just click the company section of settings and   in order to change the name and address you have  to click the pencil icon to open up that section then simply click in the proper field  and type in the name that you need   now of course in real life you would put the EIN  number and the social security number and so on   and then you would simply click save and that's  what would print the contact info and Company   address specifically the company address is  what will change and what will actually print   on most of the reports and documents so let's  click the company address and change it to in this example 1700 Prospect Avenue East Meadow  New York 11554 if it doesn't come up automatically   it should give you the ability to type it in  then when you click save you can rest assure   that all of your financial reports and all of  your transaction documents will print with the   name you put up here and print with the address  you put in this section of account settings   and if you get more advanced with QuickBooks you  can see that there are other areas of settings   that you will use in order to run your business  if it's one of the more complicated business   not the kind we're doing here when you finish  in the settings window make sure it's saved   by going to the bottom right and click done and  now you know how to change the name and address   of the company or now you know where to go if  there's any other setting you need to change   chapter 5 Property Management reports what reports  does a landlord or a rental property owner need   well we discussed earlier that you have  to have at least one report that shows   all the rent that you all earned in previous  periods compared to all of the rent that the   tenant paid in previous periods so that you could  know each tenant's balance and the reason for it   you should also have a profit and loss by  apartment or profit and loss by unit so that you   know exactly which apartments and which tenants  are costing you money or making you money and of   course we know that all of the property related  records have to tie into the normal Financial   reports that every other typical company would  have including a landlord so how do we do that   well you can just click on the left panel for the  reports section once you go to the reports section   it is the standard part of the report section that  allows you to find all the reports that you need   and you can pull them out customize them and use  them in a way that a landlord would benefit from   once you customize them they're set aside in  the custom report section so that you can find   them easily after they've been adjusted for the  things that a landlord would specifically need   so the first one we're going to pull out  and put aside is the trial balance and the   only customization we're going to apply to the  trial balance is we're going to make it show   the result of all dates regardless of when the  transactions happened so how do we do that well   again if you're in the dashboard all you have  to do is go to the left panel and click reports   now notice you're in the standard section where  you can scroll down with this scroll bar and see   all of the reports that are available for any type  of business even a landlord and once we customize   it and save it it'll be waiting for us here in the  custom section so we don't have to sift through a   huge number of reports to get the ones that we  need click standard and scroll all the way down   towards the bottom until you get the section where  it says for my accountant which is towards the   bottom and when you go down to the very bottom of  that section you'll get the trial balance double   click on the trial balance and you can see the  trial balance is programmed to open month to date   and because I'm recording this video on March 30  of 2023 you can see it automatically open between   March 1 and March 30th this will not help us we  need to click the date pull down menu and choose   the Top Choice click all dates and then every  time you make a change you must click run report   and you can see that the date range now is  reported as all dates and of course it's blank   because we have not recorded any transactions yet  once you've run the report after making any kind   of customization you then have to click save  customization this gives you a chance to alter   the name slightly so that you know which  report it is and you know the difference   between the one that you customized and the one  that automatically came with QuickBooks Online oops let's make it m now when I click save the  report is now saved in the customization area   and it's saved the way we need it to look so if  I click reports and then I click custom reports   you can see my trial balance is right here on the  list of the customized reports and all I have to   do is double click and I go right back to the  report that I just customized what about this   what about making a tenant rent balance report  well in QuickBooks Online we start with a report   called the customer balance detail because that's  what gives us the information we need to compare   what we earned to what the customer or in this  case the tenant actually paid us so we're going   to customize the customer balance detail and  we're going to call it tenant rent balances so   we click reports now we have to pull it out of the  standard section so we scroll down very carefully   to the section of who owes you and we find the  report called customer balance detail double click   and you can see it already has the date range  as all dates but we want to change the name of   the report instead of customer balance detail  we want to put the name tenant rent balances   when you hover the mouse over the title  section of any report you'll get this   pencil tool that you can click on and  you can change the name of any report so just type in tenant rent balances and then  all you have to do is click save customization   and then click save now when we click reports and  we go to the custom section we now have the trial   balance and the Tenant rent balances what about  transaction list by customer that's also something   that we can customize and call transaction list  by tenant it's simply a list of all the activity   that happens between you and a tenant but it  could be very handy to use so we click reports   we go to the standard section and we again go  down to in this case we passed who owes you   and we go to sales and customers and we find the  report transaction list by customer click on it and you'll notice in this case that you  do not have an option for all dates so   the safest thing is to get the most recent 365  days which is one of the choices here since 365   days ago should be enough click on it and  then of course we want to change the name   instead of transaction list by customer we can  click here and put transaction list by tenant and then we click save okay now it's been saved and to check that it's  on the customize list we click reports custom   reports and now we have three we have transaction  list by tenant my trial balance and the tenants   rent balances so we're going to put up one more  we need to know who's costing us money so we're   going to put up profit and loss by apartment it's  actually called profit and loss by customer but   we're going to customize it and change the  name and make it profit and loss by tenant   so we again click reports standard go  down slowly to the business overview   section and find profit and loss by customer  we click on it the first thing we need to do   is customize the date range to show  the results of all dates regardless   then of course we click run report so we can see  it is now updated and we don't want profit and   loss by customer we're going to click the pencil  tool and change the word customer to tenant and then of course we click save customization  it confirms the name and we click save   now when we click reports and custom reports  we have the four most important reports that   we need and ninety percent of the time when  we're managing our transactions or finding   results we can go right here to one of these  four reports chapter 6 data it's very easy to   get tenant and customer and property information  both in and out of QuickBooks Online you see in   the days before the computer all of the customer  or tenant information was kept in a Rolodex where   the information on each page of the Rolodex was a  separate customer and each page of the Rolodex for   that customer had each of the fields of data that  you would need in order to manage your customers   just like you were using a Rolodex it would  have the name address phone number and so on   now in the data field that you actually save to  put in each customer's information there is only   one required field all the other information is  just extra and convenient for you but you cannot   save a tenant on the customer list unless you put  in the name in this field customer display name   all the other fields are just for convenience so  what we will do because we're learning QuickBooks   Online is skip the other fields for now for now  we'll only put in the name of the tenants so that   we can make transactions and run reports but don't  worry you will see how to add or change any of the   tenant data that we put in by reopening the window  and coming back to the information and over typing   in the field and saving it it's really that easy  but I would like to focus on the accounting more   than inputting details of name and address so here  are the list of tenants for both of the properties   that we are going to be managing books and records  for we're imagining it's the same owner of both   Payton place and Meadow Lane and your QuickBooks  online account is the account for a company that   owns both of these properties paid in place and  Meadow Lane and all we have to do is put the names   on the list and there are only eight names and we  are finished with inputting the tenant data so how   do we do that well if you're in the dashboard  you can go to the left panel and click sales   and in the sub menu you can click customers  now if it's the very first time that you're   coming to this window you make a choice of  importing or adding and in this crash course   we're adding because importing is another  course entirely so we click add customer   and notice we get the new customer window where  we can input all the fields of data that we need   and again only this field is the required one  and we'll type in the name of the first tenant and for now that's all the information we need  and we'll come back in a moment and see how to   put the rest but if you click save you will see  that Alan Arby has been added to the list so   here we are in Alan's record but if we click sales  and customers we see we have one name on the list   the second one is Betty Boop new customer  type in the field and type in her name and again all we have to do is click save   and then we'll be in Betty's record but  if we click customers we'll go back to the   list of customers who else is on the list candy  Charles no problem new customer this field candy Charles and then of course we click save now we  click customers and we see we have three on the   list let's keep going Dave deeney okay so scroll  up new customer Dave deeney if I'm going too fast   of course you can pause the video click save and  we're here in Dave's record and then we can click   for the list of customers to see he's here now  at this point in the course we're going to put   in the Peyton Place tenants on the same list with  no other difference in their details and we will   learn in a later video how to run profit and  loss not only by individual tenant but we will   learn in a later video how to run profit and  loss by only Payton place or only Meadow Lane   but when we first set up the tenant list there is  no difference in the way we put them on the list   and you will see how the method Works beautifully  later in the course so let's put Ellen egluston here and after you type her name you can click save   let's see if you can do Freddy  froda Gary Greenstein and Harry   Houdini without me and see if your customer  list looks the same as mine when you finish and if you pause the video and put them in  yourself you'll see the customer list should   look like this with all eight customers and  this is what it looks like when you put them   in alphabetical order now you can even add notes  so you can reopen each customer record to change   any of their data fields like name and address  and you can add special notes that will help   you manage if you have a lot of tenants and  there's a lot to remember about each tenant   for example if Alan RB is allergic to peanuts we  might want to put that in the notes so we don't   walk around eating a Snickers bar while we're  trying to collect the rent from him so what   we can do is that we can reopen Allen's record  just by clicking on the name of that customer   now once Allen's record is in  front of us we can click edit   and notice the exact same Fields open up the same  fields that were there when we put the information   on the list are the same Fields available for  us to edit and what you can do is scroll down   and you'll notice there are different sections of  customer information and they're all represented   by these little pieces here that you can click  to navigate through this section is the notes   well one of these or this one it's the notes  but you can still get there by scrolling up and   down so we scroll to the notes section of Allen  and we type in allergic to peanuts be careful and again luckily it has a spell check where you  can right click and get the right spelling so you   don't have to waste time very good so this is how  we go back to the record make a change and save it   and that will be there and if you have any issue  with Alan you would go to the customer records you   would click Allen and you would take a look at  any of the notes that you might have written by   clicking the edit button and scrolling down and  taking a look at any of the notes that you had   mentioned before you could also add an attachment  and connect a file or several files to that   tenants account if there are specific documents  or specific files that you need to remember things   about for that tenant chapter 7 the landlord's  chart of accounts now you may well ask what is   the chart of accounts well in the days before  the computer the chart of accounts was called   the general ledger and basically it was a book  where each page in the book listed and recorded   a separate category of the financial transactions  of the company now that we have the computer it's   the same exact idea but each page in the book is  basically a little separate file or section within   the chart of accounts it's supposed to replicate  the functionality of having a book where each page   would record a different category of transactions  for example the first page might be called video   income where you would record every deposit you  made where you earned income specifically for that   one service video this way you could compare it  to the other page that recorded your income from   another service so you would be able to tell  where your money is coming in from some of the   other pages in the general ledger and chart of  accounts would also be expense categories that   you would write down for example delivery expense  might be the page that you write down every time   you pay for a company delivery and whether you  pay FedEx or UPS it wouldn't matter if that's   the service you paid for then that would be the  page that you would write down that transaction   now in the days before the computer it didn't  look like this basically the general ledger   was a book like you saw a moment ago where each  page in the book looked like a spreadsheet with   columns that had different widths and whenever you  had a transaction that related to that specific   category you would record each piece of data  regarding that transaction across the row so   each row represented a transaction and each column  represented a section of data for each transaction   recording it logically in this way made  it very clear what transactions we had   and although it was helpful to look at the pages  of the listed transactions the most important   results came from summarizing and totaling  the numbers once we got the total of every   account in the chart of accounts we could  then use those totals for valuable insights   we would then organize those totals onto the  financial statements that we've been speaking   about so that we could have a clear picture of  what's going on in the business for example the   results of all the income and expenses would be  listed on a report called the profit and loss and   the profit and loss would clearly show how well  your company did during a specific period of time   and the other numbers that did not go on the  profit and loss went on another report a different   report called the balance sheet and the balance  Sheet's purpose is to show you what you have   compared to what you owe and of course this is  a very abbreviated balance sheet but you can see   if you compare your bank accounts balance to your  credit card balances you'll have a good sense of   the financial position of the company and that's  the reason we use the chart of accounts and all   of this accounting ultimately results in taking  the ending balance of each account and listing   it on our good friend the trial balance once the  trial balance confirms that all the numbers are   correct then we would take some of those numbers  and put them on a balance sheet and put the rest   of the trial balance numbers on the profit and  loss and it's the two financial statements that   experts in business and financial people would  look at to judge how well your business is doing   and what position your company is in this is not  our chart of accounts it's just an example for   me to talk about ours is coming later and you may  notice there are three areas of data that we have   to input when we put in the list of accounts that  we need for our specific company so let's quickly   talk about them you have to put in the name you  have to tell QuickBooks Online which account type   it is and you also in QuickBooks Online have to  tell QuickBooks what detail type the account is   now what do all three pieces of data really mean  well name can be anything you want you can type   it in but in our course we're going to put all  capitals this way we can clearly distinguish   between the accounts that we created and the  accounts that QuickBooks Online created for us   and exactly what you type in in the name field  when you create the account is what's going to   show up on the reports now when choosing account  type account type determines what transactions you   can put into the account for example if it's  a bank type of account you can record Bank   deposits but if it's an expense type of an account  QuickBooks Online will not give you the ability to   record your bank deposits into an expense type  of account and the account type also determines   what position that account will appear on your  financial statements now the third piece of data   is relatively unique to QuickBooks Online you also  have to choose a detail type and the detail type   is also called tax mapping and it determines where  on the company tax forms will the balance of that   specific account show up now remember it usually  does not affect your day-to-day QuickBooks usage   it really is the truth that in this course if you  accidentally put the wrong detail type in most   cases it will not affect you it's simply for the  accountant if the accountant who's doing the taxes   wants to access the QuickBooks online account all  they would have to do is log in as the account   user and they'd be able to import all the accounts  onto the tax forms if they were mapped correctly   so don't worry too much about detail type and  tax mapping because where the bookkeeper our   job is to just make sure the numbers are right  regardless of where they go on the tax forms   now when we go to record the accounts you will  see that there are different choices you have to   make in order to create these accounts first you  have to choose an initial General category from   the six choices up here but when you go to do that  it will be clear what category you should choose   based on the name of the account and you're going  to do it along with me so you don't have to worry   now once you choose the general category it's a  simple choice to choose the account type usually   the account type that we're going to use in the  simple course should be the same name as the   general category and they're all right there  on the pull down list then once you chose the   account type you choose the detail type and again  the detail type might not affect us in this course   but if your accountant is using the convenience  of importing from QuickBooks Online it might help   your accountant do the tax forms more quickly if  you map it out right and make the correct detail   type choice please note QuickBooks Online already  added to your chart of accounts a huge number of   accounts for you to use the ones that we use will  be in capital so it'll be easier for our eyes to   see it when we go to make transactions and don't  worry that there are so many other accounts on   the list you will see later how to remove them if  you have time on your own and you'd like to make   it clear now here is Pat's chart of accounts  and we're going to put in each account one by   one on the list very carefully and when we get  towards the end I'll pause the video and you'll   see if you can put in the Rest by yourself it's  very simple if you're in the dashboard you need   to go to the left panel and scroll down and click  accounting chart of accounts now here in the chart   of accounts you may notice that there are many  many many accounts that QuickBooks Online has   already put on the list for you you can ignore  them because we will not be using most of them   we will put our accounts and capital letters so  it will be more clear which accounts we're using   and again I'll show you a little bit later how to  remove all the ones that you're not using if you   feel they're getting in the way you don't have  to remove them you can just deal with them and   manage the transactions along with us so let's  go ahead and put in the first account Chase Bank   number one two three four which is a bank type  of account and the detail is checking well that's   very simple in the top right you click new now  notice you get the main category in these little   circles and for the first one we'll click Banks  now after we click Bank we're going to choose the   only choice available bank accounts and as far as  the tax form section remember that's the detailed   type so we choose checking and the account  name is Chase Bank number one two three four and of course you can pause the video if I go  too quickly but if I click save you can go back   and see in the list in the chart of accounts the  account we just created has been added to the list   the second one on the list is Pat's capital  investment type Equity owner's equity very simple   we scroll up and click new then we click equity  and Equity is the First Choice here and the tax   form section is the detail type and we put owner's  equity and we type in the name Pat's investment and of course you could pause the video If I'm  going too quickly when we click save you'll notice   that this one did not show up at the top you  would have to scroll down to the equity section   and look for the one in capital letters in  order to find the one you're looking for   and you should know that if you scroll to the top  you could filter and sort by any of the column   headings if you click here you're sorting by name  if you click here you're sorting by account type   and it puts it in the order that you learned about  if you studied an accounting class so filtering   and sorting by the column headings should help  you find the account that you're looking for if   you're looking for a specific account we'll put  the third one on the list Pat's withdrawals also   equity and owner's equity no problem scroll up  new equity equity owner's equity Pats withdrawals make sure you spell it correctly because there is  no spell check and exactly what you type in the   name field is exactly what will show up when  you run the reports click save and let's see   what's next how about late fees income which is an  income type of account and it's service fee income   no problem new and we go to income and  we go income service fee income and we   type in the name income from late fees or we  can put late fees income the way it's written and when we finish we click save now see if you  can put the rest of the accounts on the list   without the teacher they're really just income  and expense but the thing I want to stress is   that it's easy for you to put it yourself and when  you finish putting it yourself you will not see it   in this order you will not see all of the accounts  that you created all next to each other nice like   this because there are so many in between so  after you put them in you should scroll down   slowly to make sure you can clearly see the ones  that are in capital letters so they stand out as   the ones that we will be using during the course  go ahead and pause the video put in the rest of   the accounts then I'll show you how it looks  and I'll show you how you can change or remove and if you are finished you  can find your accounts just   by carefully scrolling down and looking  for the ones that are in capital letters   that's why I instructed you to put them  in capital letters so that you can clearly   see the difference between the ones that we  put and the ones that QuickBooks Online put and you should know that you can remove any  account by clicking on the right and making   it inactive this way if you want to remove the  Clutter from the list you could spend a little   time removing the accounts that we don't need so  watch how it works for example this account here   loans to others we can click on the right all the  way on the same row click the pull down arrow and   click make inactive then when we click yes you  will see that loans to others are no longer on   the list so if you have the time you can remove  all the ones that we're not using but be careful   don't remove accounts receivable don't remove the  one that has accounts receivable for the name type   and detail type we have something special planned  for that one chapter 8 all about unearned rent   now here's Pat's chart of accounts and here are  the accounts that we put in a moment ago but we   have to make sure that it also includes  the account called unearned rental income   unearned rental income is a liability account that  represents how much is owed back to the tenant for   future rent Services which means how much do we  owe them today regarding how long they can stay in   the apartment in the future it has to be equal to  the sum total of all tenant rent balances added up   together so it goes on the trial balance like any  other account in the chart of accounts and like   all liability accounts it has a credit balance and  it shows on the right side of the trial balance   now it appears on the right side of the trial  balance as a liability that represents the total   of all the tenants balances together so if you  take what you owe Alan at this moment in future   rent services for what they prepaid plus what  Betty prepaid and how much you owe Betty at this   particular moment for future rent services and  allowing her to stay into the future plus what   candy paid in advance of staying all three tenants  balances should equal the total of unearned rent   in the general ledger and the trial balance so  that anyone looking at financial statements at   any given moment will know the total that is  owed back to all tenants in total and that   means if something happened where they all  had a move out at this moment the unearned   rent number in the trial balance would be the  amount that the landlord would have to pay back   now unearned rental income is equal to the  sum of all tenants balances and it's also   a liability account that represents how much  is owed back to the tenant for future staying   in the apartment or unit but the big question  is how can it be both because for some people   who studied accounting it's difficult for them to  understand that this can be both well the way to   make it both is to take the accounts receivable  account that's already in the chart of accounts   and make that one the unearned rental income in  other words the unearned rental income has to be   accounts receivable type of account in order for  this to work now good accountants understand this   and non-accountants who cooperate along have no  problem with this and their financial records and   QuickBooks are giving them everything they need  but there are always some people who need me to   clarify a little more about why unearned rental  income has to be in accounts receivable type of   account you see in a normal company the sum of all  customers balances would normally be equal to an   asset account called accounts receivable however  landlords are different landlords get paid before   giving the service of occupancy for renting for  that time period so because the transactions   happen in an opposite order the condition of  the tenants balance is the opposite in other   words accounts receivable is negative because  the tenant paid before getting the service and   if accounts receivable is negative it means that  accounts receivable is a liability An accounts   receivable is a liability when it's negative  it's negative when the customer pays before   receiving it's a liability until they receive and  we all know a negative asset is like a liability   so if customers owe you it's an asset called  accounts receivable but if you owe to the   customers or tenants for future Services then that  account is a liability and instead of calling it   accounts receivable you instead call it unearned  rent and that explains why so the only thing you   have to do now is log in and simply change  the name of the accounts receivable account   to unearned rent or if you want you could put it  unearned rental income but at least that explains   why the account type is what it is so all you  have to do is change the name let's do it together   so here we are at the dashboard and we go down  in the left panel to click accounting chart of   accounts now accounts receivable should be close  to the Top If you sort the accounts by type   and then once you get to the row of accounts  receivable click the pull down arrow edit   and with the cap locks on simply  change the name to unearned rent and that's it save and now our chart  of accounts is really complete and we   have an account that satisfies both  conditions and we're able to do the   very last step in the setup coming  in the next video chapter 9 quick landlords need to build tenants formally for the  services that they give and the income that they   earn from the tenant it's very important that  you put in your records an invoice for all the   monthly rent that you earned from the tenant  and on these invoices you might want to include   extra things that you Bill for for example  if you charge a late fee the appropriate   way to do that would be to list that on the  invoice additional to the normal monthly rent   sometimes landlords build tenants for shared  utility where the tenant chips in a certain   specific amount each month and the landlord  pays the whole amount these individual items   have to be listed separately on an invoice and  therefore have to be put into the special list   in QuickBooks Online now QuickBooks Online  provides a list of products and services for   items that a business owner or a landlord would  place on an invoice to bill the client or tenant   for the services that they provide it's very  simple to input the items on this items list   and you only need to input two things for each  item the item name and the specific income account   from the chart of accounts that increases when  that item is placed on an invoice to the tenant   so here's the chart of accounts and you'll notice  we only have two income type of accounts in this   chart of accounts that means there's only two  ways that we currently record making money from   tenants that means we have to bill for these  things separately so that these separate income   accounts increase in the proper amount so here we  have an invoice and if we're going to charge rent   we would list it here and of course we would put  the amount but if we bill for anything additional   besides rent we would list that right under the  rent and we would put the money amount accordingly   now if we do that we need to connect an income  account to each item for example the item of   monthly rent must be connected to the account and  the chart of accounts called rental income so if   we charge someone a thousand dollars in rent  rental income in the chart of accounts would   increase by a thousand and if we charge a fifty  dollar late fee we want that money to accumulate   in the other income account late fees income so  that every time we make an invoice and have late   fee all of the late fees will accumulate in that  account and of course we know that once we save   the invoice the numbers that are accumulated in  the trial balance will automatically show up in   the trial balance for each transaction and every  time we have more those numbers will increase   now when you put in the items on the items list  the list of products and services you'll only   put two things you need to put the name of the  billable item obviously but more importantly you   need to put the income account that the item is  connected to the way we discussed a moment ago   and it's very easy to put it in so in this course  you're only going to put in two items at the very   beginning you have to put in the item called  monthly rent and you have to put in late fee   and we will Bill the tenants for additional  items later in the course but for now all we   have to do is input these two items so how do we  do that well if you're in the dashboard here like   we're supposed to be all you have to do is click  the Cog wheel and then go over to all lists and   you're going to open the product and service list  now if it's your very first time coming to this   window you will get this message but if it's your  second third or additional time you go straight   to what you're about to see so all you have to  do is click the green button now remember we are   adding a service landlords provide a service to  their tenant and I have to make sure we're not   zoomed in too much okay this is a little better  so you can see the rest of this you can scroll   down and get the rest of the information on the  list of products and services so maybe we'll   scroll back make it clear the first name of the  first product or item of service is monthly rent and after you type it in the field push the Tab  Key to save the field and move the cursor to the   next field now the only other field you need is if  you scroll down and the income account that we're   going to choose that's associated with monthly  rent is the rental income and we have one item   finished so I click save and close and as you  can see monthly rent is now added to this list   you may also notice that there are two other  items on the list of products and services that   were already there when we created the QuickBooks  online account don't worry about these two other   items you could click to delete them if you wanted  to but you don't really make an active excuse me   but you don't really have to you can just leave  them and we will work with them accordingly   let's put in the other item the late fees again  in this list once we're here we can go to the   top right and click new and again late fee is  also a service and we type in the name late fee and if I'm typing too quickly of course you  can pause the video and type it in now scroll   down to the place where you choose the proper  income account click the pull down and scroll up   and you get late fees income click there save and  close and guess what our list of items of service   that we place on invoices for now are complete and  we're now ready to make our very first transaction   chapter 10 receiving rent payment tenants pay in advance before staying in the  apartments or unit that they're paying for   the money you receive is not yet earned by the  landlord until the tenant is finished staying   for the time that they paid for so that means  that when you receive the rent money at the   moment you receive it it's unearned now of  course because you received a payment you   will use the receive payment window to record all  the rent that you receive from the tenant and you   will make sure that you choose the correct bank  account that the tenants check was deposited to   once you do that the transaction or at least  the result of the transaction will show up   on the trial balance and any rent they paid  in advance will accumulate the total in the   account called unearned rent when you receive the  payment the result will show in the trial balance   but the result will also show in this separate  area of data tenant rent report and before our   first example please listen carefully allow us  to give example transactions like two or three   months paid in advance that would be a somewhat  rare and infrequent arrangement in the real world   we're just doing this to more clearly show how  QuickBooks Online works so you can learn it better   at the very beginning we understand that most  tenants don't pay three months in advance but   we're doing this as our first example so it's more  clear what happens when you use QuickBooks Online   and allow us to wait until the next section  before we include security deposits as part   of our transactions that we learn about I promise  if you allow us to present it this way and do the   security deposits very soon instead of right now  everything will be much more clear and also if   you have a situation where you don't collect  a security deposit this would be the way you   would do things anyway so please play along I  promise we will get to the normal transactions   very very soon and I promise security deposits  will be easy to manage when we get there very   soon but for now let's just record our very first  transaction let's imagine on January 1 of 2025   we received six thousand dollars from Alan with  check number 177 for three months rent in advance no security deposit is part of this specific  Arrangement and we will deal with that a little   bit later I promise we will double back and  learn about security deposits very soon but   for now if a tenant paid six thousand rent in  advance and it was deposited into the Chase Bank   what would be the results in the trial  balance well the cash in Chase Bank will   show up in the trial balance for the first  time as six thousand dollars and the unearned   rent the number that represents what we owe  to the client in future rent Services until   they finish staying will also show up in  the trial balance as six thousand dollars   so let's take a look at how to record this as  I mentioned before you record receiving rent   in the receive payment window so let's zoom  out a little so we can see things clearly new   receive payment we click the plus sign for the  first transaction receive payment now this window   has everything we need notice because we only have  one Bank type of account that's the one that's   selected now we have to be careful with the date  in this course this example set of transactions   is happening during the calendar year of 2025  so it doesn't matter if you're watching it in   the past or the future just follow along the  payment method is check it was check number   177 that we received from this tenant and the  Tenant was Alan Arby okay now don't worry about   this warning message notice QuickBooks is warning  you that you're recording receiving before the   invoice that's normal if you're a landlord  but QuickBooks Online doesn't know that so   it gave us a warning that we can close out and  you might not get the warning but we received six thousand so we click in the receive field type  in the 6000 push the Tab Key to save the field and   confirm the amount now when you click save and  close again it's warning you and it's going to   warn you every single time if you don't click  this box because it does not know that you're a   landlord that normally gets paid in advance so  just click save as a credit every single time   now let's check the result we click reports custom  reports trial balance and you can see the results   in the trial balance are exactly as what we  expected Chase Bank showed up for the first time   as six thousand dollars and unearned rent showed  up also for the first time as six thousand dollars   but remember there's another area of data that  we have to check before our second transaction   if we click reports and we click and we scroll  down and we click tenant rent balances you can   see that right now there's only one tenant with  a rent balance that we owe future rent services   to and that's only Alan Arby in the amount of six  thousand now let's do the second transaction let's   imagine on January 2nd we received four  thousand from Betty with check number 225   for only two months rent in advance no security  deposit is part of this specific Arrangement and   I promise again we will double back and  learn about security deposits very soon   but what will happen in the trial balance now  when we record receiving this second rent payment   well we have four thousand dollars more in  the bank account so cash and Chase Bank will   increase to ten thousand dollars and the unearned  rent is now more by 4 000 and unearned rent will   increase to 10 000 as well and additional to that  the tenants rent report will show that Allen is   owed six thousand in future rent Services Betty  will be owed four thousand in future rent services   and that explains why the total unearned rent  and the trial balance is equal to ten thousand   dollars so let's record the transaction and check  the results we can click new receive payment   and I'll stay zoomed in it looks a little clearer  we'll Advance the date to January 2nd of 2025.   we'll choose Betty Boop as our tenant  and again this is just a warning because   QuickBooks Online doesn't know that it's  normal for landlords to be paid in advance   of the rent service that they give so we  can close it out it remembers we like to   deposit into our Chase Bank and the amount  we received from Betty is four thousand tab now when we click save and close again it's  warning us that we got to receive payment without   an invoice because it doesn't know that landlords  normally get paid in advance if you want you can   click the don't show me this message again but  no matter what you have to click save as a credit   okay now when we click reports and we open up  the trial balance in the custom report area   the numbers are exactly as what we expected cash  and Chase Bank has increased to ten thousand and   unearned rent increased to ten thousand now let's  click reports custom reports and scroll down to   tenant rent balances and when we do that you can  see that we owe Alan six thousand dollars worth   of future rent services or future staying in the  apartment with Betty we notice that she paid 4   000 in advance that's why the numbers are negative  because QuickBooks Online assumes it's a normal   company where the customer owes you instead of  you owing the customer and the total here is ten   thousand which is equal to the total unearned  rent ten thousand now we're almost finished   with this video but I'd like to show you right at  the beginning how you can fix any input mistake   no problem you just reopen the transaction  from any report and you'll be able to change   anything you put and save it and once you save  it all the results and all the reports will fix   themselves immediately this is called changing or  editing a transaction okay so watch how it's done   for example I notice I forgot to put in check  number 225 on Betty's payment so if you have   the tenant rent report right in front of you all  you have to do is Click anywhere in the row that   it's listed anywhere double click and the window  that you recorded the transaction in will appear   you can click to add the data that you  forgot and just change anything you want   once you do that you can click save and new and  again if you want this to stop bothering you you   can click don't show me and click save as a credit  now when you close the window you go back and you   see the check number is now included in fact if  you click reports and you open the trial balance   you'll notice the trial balance has summary  numbers that are the totals of transactions   you can change the numbers from the trial  balance as well you can double click any   total that you see in the trial balance and  a list of transactions that got recorded into   that particular account will show up in front  of you just make sure the trial the triangle is   pointing down instead of collapse to the side  so you can open this very same transaction by   double clicking it by opening it in the trial  balance in fact you could even change the money   amount and make it a million million million  million dollars and as soon as you save it   and you go back to the trial balance reports  custom trial balance now you see the trial   balance is destroyed with the big crazy number but  don't worry you can double click and reopen any   account to see the list you can go over and see  what the numbers are double click anywhere on the   line of a transaction to go back to the very same  window that you recorded it correct the number save and close and now when you click reports  and you click trial balance you can see the   numbers are now correct and they fix themselves  you can even delete a transaction if you double   click to open the list of transactions in the  account double-click the transaction to go back   and when you click more you will have the option  to delete and permanently remove any transaction   you recorded in case it's too messed up and you  simply have to remove it and record it again   and that's how you record transactions  and find the results and fix mistakes   chapter 11 recording rent invoices   landlords must formally Bill their tenants each  month for rent that is earned by the landlord   and the invoice actually serves two functions you  see in the days before the computer you gave a   client an invoice in order to clarify what was  being paid for and to formally request payment   but what does an invoice in QuickBooks Online do  well QuickBooks Online is a record-keeping program   so recording an invoice records income earned  and changes the tenant's balance whether you   got paid before or after the invoice it's used  in QuickBooks Online to acknowledge the rental   income earned but not yet received so what's  different about this for landlords compared to any   other type of company well landlords do not finish  earning the rent income until the end of the month   so the January invoice for rent earned  in January should not be recorded until   January 31st and it should be dated January 31.  the invoice that records February rent income   earned during February should be recorded on the  28th and the 29th so it acknowledges rent earned   during the prior month that just finished and the  March invoice and the April invoice same thing   so how do we request payment from a tenant if  the invoice simply records the uh rent income   earned and it's dated after the month well it's a  very simple procedure the January 31 invoice will   record the rent earned during January and you  can give it physically to the tenant to request   payment for February and it's the same thing for  February's rent invoice recording February's rent   invoice acknowledges rent earned during the month  that just finished February but you could print it   out or email it to the tenant so that invoice that  acknowledges February earned will formally request   March's rent be paid on the 1st of March 1. so how  do you do that how do you make that happen well if   it's the January 31 invoice acknowledging  rent earned for January it's very simple   the January 31 invoice after recording rent  earned for January can have a message at the   bottom of the invoice asking the tenant to pay  immediately for February's rent and the February   28 invoice that records earning February's rent  can be given to the tenant to request immediate   payment for March's rent simply by putting that  little message at the bottom of the invoice and by   following the procedure this way you will be using  the two functions of an invoice in the way that a   landlord needs to do so what will happen when we  physically record a rent invoice in the little   setup with the methods that we have here well  rental income will increase and when we make our   first invoice rental income will show up for the  first time in the amount that we actually earned   and because at that exact moment we acknowledge  that rental income was earned that means unearned   rental income will decrease because that's where  it was earned from for example let's imagine on   January 31 we created the January 31 invoice for  Alan Arby for his two thousand dollar monthly rent   now once we record this what will be the result  in the trial balance well if his monthly rent is 2   000 that means there's 2 000 less unearned if we  just acknowledged we earned that rent so unearned   rent will decrease by two thousand and become  eight thousand and because this is our very   first rent invoice rental income will show up  in the trial balance for the very first time as   two thousand dollars let's take a look at how to  record it from the top left we click new invoice now of course the date we have to move  backward or forward until you get to   January 31st of 2025 in our little story notice  QuickBooks Online automatically enumerates the   invoice number so you don't have to put  it unless you're changing it to correct it   now the tenant that we're billing is Alan  Arby and what are we billing Alan for   click directly under the words product  and service to bring the pull down arrow   then click on the Arrow to click what we're  billing for in this case monthly rent and Allen's   monthly rent is 2 000. push the Tab Key and that's  all you have to do to record your first monthly   invoice of course you might want to type in please  pay February's rent immediately and of course you   could pause the video if I'm typing too quickly  but once your invoice is complete all you have to   do here at the bottom is click the save and close  button and when you go back to the trial balance   you can see the results are exactly as what we  expected unearned rental income decreased to 8   000 and Rental income earned showed up  for the first time as two thousand dollars   now let's do the second example let's imagine also  on January 31 we created the January 31 invoice   for another tenant Betty Boop her rent is also two  thousand dollars so what's going to happen when we   create another two thousand dollar monthly rent  invoice well unearned rent is going to decrease   by another two thousand and become six thousand  and Rental income earned is going to increase by   another two thousand and become four thousand  dollars well that's very simple we click new   invoice the date is the same because we Bill all  tenants at the end of the month notice QuickBooks   Online enumerated automatically the invoice  numbers but you can always fix it don't worry   and we're billing Betty this time click directly  under the words product and service click the pull   down arrow and we're billing for monthly rent  now all you have to do is put in the amount and then click save and close and you  will see the results are exactly as what   we expected unearned rent is now six thousand  and Rental income earned is now four thousand   now of course in addition to looking at the trial  balance we have to look at the tenant subsidiary   reports to see the details if you click reports  and you click tenants rent balances you see the   original amount that was collected and then you  see the current balance after recording invoices   against those payments and that's why it shows  clearly the remaining balance of each tenant   so because unearned rental income was six  thousand in the trial balance that's because   after the first month's rental invoice you still  owe Alan Arby 4 000 in future rent services and   you still owe Betty Boop 2 000 in future rent  services and that's the reason why the trial   balance says unearned rent six thousand but in my  opinion this is really a terrible way to explain   this to the users of QuickBooks Online so you need  both tenants reports you need this report to show   the summary balance but if you click reports and  then you click transaction list by tenant what you   will see is every single invoice and every single  payment for both tenants you can collapse this up   and open it up if you open this up you can see  Alan paid on January 1st the 6000 and then you   can see we built him for only two thousand on uh  January Thirty One this total is arbitrary and it   means nothing because this report is simply a  list of all the transactions by tenant and in   QuickBooks Online you need both the tenant balance  detail from a moment ago and the transaction list   by tenant to be able to clearly and properly track  all your tenants transactions you can even open   up the other tenant by clicking the down arrow  and we see for Betty we collected rent on Feb on   January 2 and then that amount was four thousand  and then we build Betty for the January rent on   the 31st and then that was two thousand so this  report lists every transaction the other report   gives you a summary and shows the remaining  balance for each tenant now see if you can   do two of these invoices on your own and see if  you can get the same results as the teacher let's   imagine on February 28 you created the February 28  invoice for Alan and that's his 2000 monthly rent   and let's imagine also on February 28 you created  an invoice for Betty for her 2000 monthly rent   go ahead pause the video record these two invoices  and see if your results are the same as mine when you finish your trial balance should  look like this unearned rent should be down   to two thousand and you've earned a total of  8 000 in rent for two tenants for two months   for two thousand dollars each and if you want  this clarified and explained you click reports   tenant rent balances and you can see that  only Allen has a remaining open balance   for the amount of two thousand because  Betty was billed for everything she   paid for but Alan was not Allen is still  owed two thousand dollars in future rent   services and if you want the details of that  you click reports transaction list by tenant and then you can see all three transactions for  Alan he paid six thousand then we built him on   the 31st for two thousand then we build him again  on the 28th for two thousand and that explains why   he's owed two thousand in the future Betty we owe  zero because if you open up Betty you can see that   the two invoices that we build her for for the  two months were equal to the total four thousand   that she paid in advance so that's how you manage  the trial balance the general ledger and all of   the tenants subsidiary records and that's how  you get all the information you need about who   paid for the days that they stayed chapter 12.  charging late fees it's very easy to add the   late fee to a monthly rent invoice when you send  your invoices to your tenants just like you put   the monthly rent as an item listed at the bottom  of the invoice something you're charging them for   you can additionally charge them for late fees  and add that item in the bottom of the invoice   we remember from the prior video that when we  created the late fee item and put it on the   list of products and services we connected that  item to the late fees income account that means   when we record late fees on an invoice the amount  of late fees accumulates in that account and the   total of that account will display when we run  our trial balance for example let's imagine on   January 15th Ella egluston paid her first month's  rent now recording the rent in this case is normal   because we don't charge the late fee until we put  it on the invoice at the end of the month so if   we just received a thousand dollars from Ella  cash and Chase Bank will increase by a thousand   and become eleven thousand and unearned rent will  increase to 3 000 from the top left we click new   receive payment now of course we put the date  as January 15th of 2025 in our little story   the tenant is Ellen and of course QuickBooks  reminds us that we're getting paid before an   invoice it doesn't know we're a landlord and this  is normal so we can close this out now normally   you'd put a payment method and a reference  number but let's just focus on the accounting   and put the rent amount and we know it's going  in the correct bank account for the correct date   for the correct tenant we click save and close  remember you can remove this message permanently   and click save as a credit now when we click  reports trial balance and zoom in a tiny bit   we can see the results are exactly as what we  expected we have a thousand dollars more in   Chase Bank and unearned rent increased to three  thousand dollars now here's where the interesting   part comes since she moved in on January 1 but  paid on January 15th we're going to charge her   a late fee so fifty dollars will be added to her  January invoice for paying January late so what   will be the result in the trial balance after we  record this rent invoice with the late fee well we   earned a thousand dollars more in rental income so  rental income should increase to nine thousand and   late fees income should show up for the first time  as fifty dollars and because this rent invoice was   a total of one thousand fifty dollars the unearned  rent should decrease by one thousand fifty dollars   and become one thousand nine hundred fifty so  let's take a look how to record it we click new   invoice now in this case it's the January 31st  invoice for Ella now we click directly under the   list of products and services click the arrow  and choose monthly rent and her specific rent a thousand dollars a month now to add the late  fee click directly under monthly rent and then   click the pull down arrow and choose the late fee  item her late fee is fifty dollars this month push   tab to save the field and then when you click save  and close you can return to the trial balance and   see the results are exactly as what we expected  unearned rent became 1950 late fees income showed   up for the first time as fifty dollars and Rental  income became nine thousand now let's try a second   example let's imagine on January 18 Freddie froda  paid his first monthly rent of a thousand dollars   so what would be the result in the trial balance  if we receive a thousand dollars from another   tenant for monthly rent well we have a thousand  dollars more in the bank account so Chase Bank   increases to twelve thousand and because we just  received a thousand dollars that we did not yet   earn because we don't earn it until January Thirty  One unearned rent will increase by a thousand and   become two thousand nine hundred fifty let's  take a look we zoom out a little bit here and we click new receive payment and the  transaction says this happened on January 18th   of 2025 and the Tenant this time is Freddie froda  again we get the warning message that we close and   the money's going into Chase Bank we don't worry  about the payment method too much when we're   studying and we put a thousand dollars now when we  click save and close and we click save as a credit   just like we did before the numbers are exactly  as what we expected cash and Chase Bank increased   to twelve thousand and unearned rental income  increased to two thousand nine hundred fifty   now remember Freddie moved in on January 1 but  he didn't pay until January 18. so he will be   charged a late fee a hundred dollars will be added  to his January invoice for paying late for January   so we're going to make the January 31 invoice  for Freddy and we're going to include the   hundred dollar late fee so what will happen  in the trial balance at the moment we record   Freddy's January invoice well we just earned an  additional thousand dollars in rental income so   rental income will increase by a thousand and  become ten thousand dollars we also earned an   additional hundred dollars in late fees income  so at the moment we save the invoice late fees   income will increase by a hundred and become one  hundred fifty and because the total of the invoice   for Freddy is 1100 unearned rent will decrease by  1 100 and become one thousand eight hundred fifty   from the top left we click new invoice and of  course the date of the invoice is January 31   of 2025 in our little story we click the pull  down arrow and we choose Freddy froda we click   directly under products and services and we choose  the monthly rent and in the case of Freddy froda   the monthly rent is a thousand dollars now we  click under the monthly rent to bring the pull   down arrow click the pull down arrow and choose  late fee then make the amount of the late fee   one thousand dollars now when we click save  and close we can see the results in the trial   balance are exactly as what we expected we can see  that rental income increased to ten thousand late   fees income increased to 150 and unearned rent  became one thousand eight hundred fifty you can   also check the reports for the tenants balances  if you scroll down in the custom report area you   can click tenant rent balance and I might want to  zoom out a little so you can see it you can see   Freddy froda still owes a hundred dollars because  his rent was a thousand and we and he only paid a   thousand but we charged him 1100 on the invoice  same thing with Ellen she only paid a thousand   but we charged her 1050 on the invoice and that's  why her remaining balance is fifty dollars and of   course Allen still has a prepaid balance of two  thousand and with Betty it broke even because she   paid for exactly what she stayed she doesn't  show up on this report but if you want to see   everything listed clearly but without the ending  balance you can click reports and you can click   um transaction list by tenant and you can open up  each tenant's transaction list one by one we'll   close Allen we'll leave you know you see Betty  has the same amount of payment as she does invoice   but when it comes to Ellen take a look you see  she has one invoice we scroll to the right uh she   made a payment of a thousand see but we charged  her an invoice two weeks later of 1050. so this   is nice don't go by this this is simply the  total of her transactions her actual balance   would be in the tenant balance detail and that  would be true for Freddie as well we can close   up Ellen's records open up Freddy's records  and you can see he made a payment and then   the payment was a thousand and then we charged  him an invoice and the invoice was one thousand   one hundred this is not his balance his net  balance is shown in the tenant balance detail   so in QuickBooks Online you need both of these  reports to manage your tenants records [Music] when you pay expenses as a property owner using  QuickBooks Online you're going to use either the   checks window or the expense window now they're  both exactly the same there's no real difference   between recording payments in either the expense  window or the checks window but usually we want   to use the expense window for online payments and  we want to use the checks window for the physical   checks that you write but if you make a mistake  and use one instead of the other there will be no   real different result in your QuickBooks records  now your taxes just like any other company is   based on the results of your profit and loss you  would lay out all your income sources and gather   up the total income and you would subtract all the  expenses in your company find the total and the   difference would be the net profit that you would  use to calculate the remaining taxable income and   pay your taxes and this report is somewhat helpful  for understanding what's going on in your company   however it would be better to split it by profit  and loss by apartment if you really want to see   where your money is coming in from and where your  money is going out to so this will separate each   income item by apartment and unit so you can see  exactly what you charged each tenant in rent and   how much you made off of them in late fees and  you can compare that to the specific expenses   that were related to specific tenants apartments  or units and you can see exactly what was spent   in each expense category for each tenant or each  unit then of course the bottom line is the total   the difference between all the money that you  earned in rental income and late fees minus   each of the specific expenses that were related  to the specific units that the tenants stayed   and of course we remember that the total income  amounts up here at the top all come from recording   rent invoices and including rental income and late  fees income on the invoices that we just finished   recording for the tenants but the expenses and  especially the expenses by property come from   either the checks window or the expenses window  which is basically the same thing and they record   the expenses not only for the company but the  expenses associated with each specific property   tenant or unit and we're about to record our first  few checks and expenses now and we will see how   the profit and loss by apartment unfolds expenses  are very easy to record in QuickBooks online and   again the checks window looks exactly like the  expense window and it has a field for each piece   of information just like the invoice there's a  place to put the name and the date and so on and   you can even put which category of expense but  the most important field in order to track your   expenses by apartment and unit is the customer  project field and you have to make sure that that   field of data shows up in the expense window and  shows up in the checks window and if it doesn't   you have to go and make sure that it's activated  if you remember the account settings window you   have to click the Cog wheel and you have to click  account and settings and then once it opens up you   have to go to the expenses category here and you  have to click to open up the extracted expenses   by customer and make sure it's on here let me  show you what it looks like remember we click the   Cog wheel account and settings and it's in the  expense tab category right up top and what you   have to do is you have to click to open it up and  click to activate it so expenses we have to click   this pencil tool and we have to make sure track  expenses by uh track expenses by items by customer   both have to be activated here if you close this  out it won't work it has to be open right here and   it already was open so I'm going to leave without  saving but if yours wasn't open you would have to   activate it that way so now let's do our first  example let's imagine on January 11 Alan Arby   broke the door and we paid 200 to fix it with  check number one made payable to Rex repairs shop   so what will be the result in the trial balance at  the moment we pay two hundred dollars for a repair   well if it came from Chase bank account Chase bank  account has two hundred dollars less and becomes   eleven thousand eight hundred and because this is  our first repair expense repair expense will show   up in the trial balance for the first time in the  amount of two hundred dollars so let's go ahead   and record it we click new now in order to get to  the vendors column you go to the second column and   choose either expense or check and because this  is a physical check we click check notice it   automatically comes up with check number one but  you can change the check number to anything you   need it to be if you wrote a physical handwritten  check now we're going to pay Rex repair shop   and the date that we're paying him I believe  was January 11th of 2025 in our little story now the expense category clearly is repair expense  we click for the pull down click the arrow and we   choose from the accounts in the chart of accounts  now there are a lot to choose from so you can just   click type in the first letter of the account  you're looking for and QuickBooks will filter it   and you'll be able to find the account you're  looking for easy not rental income rent no no   no type in r e P that's how it filters it repair  expense so you might have to type in three letters   to eventually get to the account name that you're  looking for and the amount of the repair expense   two hundred dollars and customer project here   this is the most important thing it's associated  with Alan Arby Allen Arby so this is all you have   to do the what the who the when the which bank  account the how much and why very easy to fill   out a check save and close and when we come back  to the trial balance the results are exactly as   what we expected you see that repair expense  has shown up for the first time as two hundred   dollars and cash and Bank decreased to eleven  thousand eight hundred however let's take a   look at our good friend the prophet and loss  by tenant if we come back and click reports   and we go down to custom reports and we scroll  and we find profit and loss by tenant double   click the one that we set up at the beginning  and you can see in the column of Alan Arby   four thousand are all of the rent invoices that we  earn from Alan and this is the total income from   each tenant but only in the column of Allen he's  the only one that we recorded a repair expense   specifically in the column of Allen lowering the  income that we earned specifically from Allen   now let's try a second example let's imagine on  January 14 Betty Boop's apartment needed a hundred   dollars of supplies for Pat the landlord to work  alone while restoring the apartment after a flood   he paid it with online transfer number eight  eight seven seven six six five to Staples   so what will be the result in the trial balance  after we pay supplies to Staples well we just paid   a hundred dollars so the Chase bank account will  decrease by a hundred and become eleven thousand   seven hundred dollars and because this is the  first time that he paid supplies expense supplies   expense will show up in the trial balance for the  first time as the amount we paid a hundred dollars   now let's go ahead and record it in the top  left we click new but then this time when we   go over to the vendor column we will click expense  because that's more normal for an online payment   click expense and if I just scroll out a tiny bit  you can see that the fields in the expense window   are exactly the same as the fields in the check  window the only difference is this says reference   number instead of check number and you'll put in  the number that they give you for the transaction and of course you have to choose the  correct vendor in this case Staples   and payment method we already know is an online  transfer we can skip that and the category of   excuse me the date that we're paying is  January 14th of 2025 in our little story   and we're going to click here to bring supplies  expense type in s u in order to filter it to   bring the account that you need more quickly the  amount we're paying is a hundred dollars and most   importantly we're tracking it by tenant and it  was this tenant that cost us the hundred dollars   or at least her apartment so when we click save  and close the results and the trial balance are   exactly as what we expected click reports trial  balance and you can see if I zoom in a tiny bit   that the resultant cash in bank is what we  expected eleven thousand seven hundred and   supplies expense shows up for the first time as  one hundred dollars but most importantly let's   look at the profit and loss by tenant if we click  reports and we go to custom and we scroll down to   the one that we made profit and loss by tenant you  can see that under Betty Boop the four thousand is   the total of all the invoices that we made for  rent but specifically under Betty's column we   have a hundred dollars of supplies thereby making  the net profit we made specifically from Betty go   down to three thousand nine hundred dollars and  now it's time for you to give it a try go ahead   and enter the January 17th check that we wrote  to Rex repair on behalf of Betty Boop who broke   the gate and go ahead and enter the January 22nd  supplies that we paid for from Staples because   Allen's apartment needed some more supplies so you  can pause the video and see if you can enter these   two expenses exactly the same way that I entered  the example two expenses that we did together   see if you can get a trial balance that looks  exactly like this if your trial balance does   not look like this you have to use the techniques  that we learned in earlier videos to find and fix   your mistakes and of course when you're finished  you should also look at the most important report   regarding this video the profit and loss by  tenant and if I open it now because I already   recorded these transactions your profit and loss  by tenant should look like this in the column of   Alan Arby you should have these two expenses and  this net income just from Alan and in the column   of Betty you should have these two expenses and  this as the net income just in the column of Betty   and at this point you should also look at the  sum total profit and loss and save it on our   custom list that's the profit and loss for the  whole entire company together and we can open   that up by clicking reports and from Custom we  click standard and be very careful as you scroll   down once you pass business overview you go to the  bottom of that section and you get profit and loss   click on it and do what we always do click  the pull down arrow choose all dates and click   run report now you can see that the income and  expenses for all tenants together are summarized   in the overall company profit and loss for late  fees income and Rental income and all the other   expenses and this is what you would give your tax  person in order to do your full company's taxes   chapter 14. you think security deposits  security deposits are money that we   collect from tenants to pay for possible future  damages that might be caused by those tenants   we usually collect the security deposit  at the moment we move in but in the real   world that doesn't always happen we owe  this money back to the tenant up until   the moment that we either apply it to any  cost for damages or return it to the tenant   some states require that we put this in a special  Trust bank account we will not do that here but we   easily could from the Knowledge and Skills  that we've already learned in this course   now the name of the account in the chart of  accounts that represents the total money that we   owe back to all tenants in total specifically for  all of the security deposits that we collected is   called security deposits payable and security  deposits payable is a liability because it   represents a future obligation whether it be  money or service back to the tenant and like   all liability accounts it has a credit balance  and shows on the right side of the trial balance   now it's equal to the sum of all tenants deposits  together so if we were able to determine how much   we collected just from Allen specifically for  security deposit and not for rent and add that   to only Betty's security deposit not for rent and  add that to Candy security deposit and just the   money we collected from the tenants just for  their security deposit all of that together   should equal the total balance in that one  account security deposits payable which is   a liability showing up on the credit side of the  trial balance now in order to set up for security   deposit payable we have to put this account in  the chart of accounts the type of account will   be other current liabilities and the detail type  will be trust accounts now choosing a different   detail type will not have any effect on what we do  but it's proper to label it so that it's maybe a   little bit more clear it's money we're holding for  the client or the tenant who trusts us to pay it   back so that might be the most appropriate detail  type even though it might not affect anything   so let's put it on the chart of accounts and  do it exactly as I do click accounting chart of   accounts now we're going to make a new account  and clearly the main category is liability   but under liability you should choose other  current liability and for tax form section   which is really the detail type we'll call it  trust accounts okay other current liabilities   trust account and the name in capital  letters will be security deposits payable and you can pause the video to type it in if  you type slowly that's fine and now when we   click save it will be in the accounts in the  chart of accounts in the liability section and now that we have the account let's discuss how  to record receiving the security deposits well we   use the bank deposit window that's a different  window than the window we use to collect the   normal rent and we would simply put in each data  field related to the transaction just like we did   before but we have to follow some special rules  when we record deposits or security deposits   from tenants in QuickBooks Online you see it's  the same simple data entry when it comes to the   date and the name and so on but you must follow  this Special Rule you must always type in the   tenant's name in the description field in addition  to choosing their name from the pull down list so   you choose their name from the pull down list so  we know which tenant gave the deposit then you   must put that same name type it in yourself in the  description field and this will help later when   we're managing the tenants deposit data and that's  the only extra little rule that you have to follow   when using QuickBooks Online to record security  deposit transactions for example let's imagine   back on January 1 Allen had given us two thousand  dollars security deposit that we never recorded in   a previous video lecture we recorded the rent but  we didn't record this separate two thousand dollar   deposit so let's record it now now what will  happen in the trial balance at the moment that we   record receiving the first security deposit that  we never previously recorded well two thousand   dollars is the security deposit we just got so  security deposits payable will show up in the   trial balance for the first time as two thousand  and because we're keeping the security deposits   in the operating account which you don't have  to do some states have a separate trust account   but we're putting it in Chase Bank and Chase Bank  will increase by two thousand and become thirteen   thousand three hundred twenty five so let's go  ahead and record that first security deposit we click new and go all the way to the right and  click bank deposit now the date that we collected   it was January 1 in our little story which is  happening during 2025. now from whom did we   receive by the way this is the bank account and if  you had a separate Bank type of account as a trust   account to physically hold the deposits that would  be the bank account that you would choose click   under receive from and choose the tenant Allen now  obviously the account will be you type in sec to   filter it so we can go directly to security  deposits payable but remember you must type   into the description field the name exactly as  it's spelled and what it is Allen RB Dash initio initial deposit now of course in a real situation  we'll have a payment method and a reference   number and we will have in later examples but  for now just put the amount of the deposit   and that's all you have to do to record receiving  a deposit a security deposit from a tenant when   we click save and new we can excuse me we  can click save and close check the trial   balance click reports my trial balance and  the results are exactly as what we expected   you can see that cash in Bank increased to  thirteen thousand three hundred twenty five and   security deposits payable showed up on the trial  balance for the first time as two thousand dollars now let's do a second example let's imagine  back on January 1 Betty had also given us   a two thousand dollar security deposit that we  never recorded so let's record it now but before   we record it let's discuss what the results will  be in the trial balance well we have two thousand   more in the bank so cash and Chase Bank increases  to fifteen thousand three hundred twenty five   and we have two thousand more in security deposits  payable so security deposits payable increases to   four thousand let's do it the exact same way new  go over and click bank deposit now of course the   date is the same the bank account is the same  but we're receiving it from Betty this time of   course it's going into the you have to type in  sec to filter the account to get your security   deposits payable and don't forget you must put in  the description field the name of the person Dash   the reason or you will have a problem later  that's a special rule for QuickBooks Online now normally we would have a payment method  and we would have a reference number okay   but we might have to scroll out a little or zoom  out a little to be able to get the amount field push tab now we recorded Betty's deposit properly  click save and close when we come back to the   trial balance the results are exactly as what  we expected you can see cash and bank went up   to fifteen thousand three hundred twenty five  and security deposits payable increased to   four thousand now we're going to talk about  the details so that we know exactly which   tenants paid us security deposit and what  we owe to each one we're going to have to   make a customized security deposit report you  see there are no separate reports for security   deposit liability in the way there are reports for  the details of the unearned rent which is also a   liability that we owe back to the tenant we must  create a report that will show us the details of   each individual's tenants deposit balance this  could be this must be tracked separately from   the details in the tenant's rent balance so we  have to go ahead and create a detailed security   deposit report that shows what we owe just for  the security deposit similar to the way the rent   related reports show specifically what we owe  for rent so how do we do that well we want to   make sure that we open something that shows the  name of each person who gave us a security deposit   so what we do is we open the security deposit  payable account and then we filter it but   before I show you how to filter it watch we go  to security deposits payable and we double click   and this my friend is the security deposit payable  account notice it lists each person's individual   security deposit both in the name and in the  memo description field and it shows that this   is the account and it shows all the information  so this will show us the details of what we need   but it's too wide and it's too spread out and  it has too many columns that we don't need so   what we need to do is customize only for these  columns now we can do this by clicking in the   top right corner of the report and get the Cog  wheel and filter for just the columns we need   make sure you click only on the columns that are  selected here like date name number transaction   type memo description and amount we want to make  sure that only those boxes are checked and nothing   else this way we have a clear efficient report  that tells us all about the security deposit so   we come here and we double click security  deposits payable from the trial balance   and now we have the actual security deposit  account in front of us and you can clearly see   which tenant gave which deposit on which date and  so on but we have to customize it we click in the   top right or excuse me we actually have to click  not that Cog wheel this one the Cog wheel that's   in the top right of every report that you run in  QuickBooks online and when you click it you can   click show more and make sure we only have what we  need date type number name description account and   amount we don't need split and we don't need  balance and before we close the little window   we go up here and click run report and now you  can see we have a report with only the columns   that we need in fact we can remove the column for  account we don't need that we know it's security   deposit so that one was still selected let's  remove it boom run report now we really have   a concise compact report that tells us all the  information we need about each tenant's security   deposit and when we click save customization we  want to change the name to security deposit report and of course you can change you can  excuse me you can pause the video if   you need to type it in and I suggest you type  it in capitals it doesn't matter click save   so now when we click reports and we go to the  custom reports section we can look at the security   deposit report to see the detail of individual  tenants security deposit let's do a third example   now this third example is very interesting back  on February 1 Ellen had given us a two thousand   dollar check check number six one one now a  thousand dollars was for February rent and the   other was the one thousand dollar overdue security  deposit that she should have given us back in   January but in the real world sometimes people pay  their security deposit late now she gave us the   deposit and the February rent with the same check  you have to record it on two separate lines of   the bank deposit window to make sure that only a  thousand dollars goes for the security deposit and   the other thousand dollars goes for unearned rent  so what will be the result in the trial balance   after recording this very interesting transaction  well cash and Chase Bank just increased by two   thousand because the amount of the entire check  that we just deposited was two thousand dollars   and Chase Bank will become seventeen thousand  three hundred twenty five only a thousand dollars   of that check increases security deposits payable  so security deposits payable becomes five thousand   and because the other thousand dollars was  to be used for future rent payments unearned   rent increases by that thousand dollars and  becomes two thousand eight hundred fifty dollars   from the top left we click new and we go over to  bank deposit now the date is February 1 of 2025.   of course if we were choosing a Trust bank account  we would make that choice here but in our example   we use the operating account to deposit the money  to click under received from click the pull down   arrow and choose Ellen egluston now on the same  row on the same row that you just put her name   on the first row go over to amount and put only a  thousand dollars and push tab that's because only   a thousand is being applied to this account type  in SEC security deposits payable so on only the   first line you put security deposits payable and  put only the amount associated with the deposit   the reference number is the check number that  she gave us and the payment method was check   in the description field do the same thing  and the description field becomes even more   important in a case like this so you  must type in their name clearly first and of course you can pause the video If I'm  going too quickly and you have to type in their monthly deposit all on the first row but  the check was two thousand so click directly   under her name where it says received from click  in the second row click the pull down arrow and   choose her name again you should also choose  payment method check again and you should also   type in the very same check number and the amount  that goes to rent instead of security deposits is   a thousand and if you click directly under  security deposits payable and type in un you   will filter for unearned rent so you can see the  total that she gave us is 2 000 for this check a   thousand goes to the security deposit and the  other thousand goes to unearned rent make sure   that you type in her name in the  description field on the second row as well and now that you've filled out the form and typed  in everything properly at the moment you click   save and close you can see the results are exactly  as what we expected cash and Chase Bank increased   by two thousand unearned rent became 2850 and  security deposits payable became five thousand   you should also check the details in the  security deposit report click reports   security deposit report and now you can see Ellen  egluston has been added to the details but only   in the amount of one thousand but of course you  could always double click and open it up to see   the whole details and now it's time for you to  try one on your own let's imagine Gary Greenstein   moved in on February 1. he gave you a thousand  dollar check for the first month's rent and that   was check number 167 and he gave you a different  check for a thousand dollars for the security   deposit and that was check number 2020. see if you  can record these two transactions by yourself and   get the same results that I have when I look at  my results after recording these two transactions   from Gary Greenstein cash and Bank should be  nineteen thousand three hundred twenty five   unearned rent should be three thousand eight  hundred fifty security deposits payable should   be six thousand and the rest of the numbers should  not have changed and if you need a moment to pause   the video and Rewind it to show to remind yourself  how to record getting two separate checks for both   the rent and the deposit go ahead and review  then enter Gary greenstein's transactions and   see if you get these results then you should  try this one on your own back on February 1   Freddy froda had given us a two thousand dollar  check with check number eight four seven two   now it was the same check for February rent  and the security deposit the check was 2   000 but only a thousand was for unearned rent  and the other thousand was for the security   deposit payable go ahead and record this and see  if you get this result as you can see security   deposits payable increased to seven thousand  unearned rent increased to four thousand eight   hundred fifty and cash and Chase Bank increased  to twenty one thousand three hundred twenty five   so if you need to pause the video and go back  and review how we recorded getting one check   for both the deposit and the first month's  rent go ahead and review it and apply it to   Freddy's transactions here and these should be  the numbers when you finish but wait there's one   more result to check if we click reports and  we open the security deposit report you can   see that all the information about the security  deposit for Ellen and Freddie and everyone else   is all listed they're all listed in the memo  field and these are the numbers and these are   the memo descriptions that you should have when  you finish recording everybody's security deposit   chapter 15 applying security deposits  security deposits are money we collect   from tenants to pay for possible future damages  that might be caused by the tenant in the future   when they cause damage that we have evidence for  we can apply some of the tenant's security deposit   for what we paid for the damages now what would  normally happen when you pay an expense that a   tenant is not responsible for but you are well  if you pay your cash and Bank Goes Down And if   you were the one responsible your expenses would  go up like they did in Prior videos however what   happens when you pay an expense that the tenant is  responsible for well of course your cash goes down   because you paid some but instead of your expense  is going up if the tenant is responsible then at   the moment you pay the tenants security deposit  will go down instead of your expense going up   it's not an expense to you if the tenant is  responsible so when you pay an expense that   a tenant caused you that will be deducted  from their security deposit your expenses   don't change the tenants deposit balance will and  the proper account in the chart of accounts that   represents the tenant security deposit is security  deposit payable so when you pay an expense that   the tenant is responsible for both cash and the  security deposit payable account should decrease   now when you record that type of expense  you're going to use the expense or check   window in the exact same way that you learned  in a prior video you will record every field of   data the same way that you would in a normal  transaction except you will put the security   deposits payable account in the account category  field instead of the expense that you're paying   for and that's what will make the security deposit  balance go down instead of your expense going up   and of course because it is still a security  deposit transaction you also have to put the name   of the tenant and the reason clearly written out  in the description field and you're going to see   why putting that information in the description  field is going to help us very much in our coming   videos but for example let's imagine on February  5th Betty broke the countertops you paid Rex   repair shop four hundred dollars to fix it with  an online payment with this transaction number   now if Betty is responsible we will take it  from her security deposit so what will be the   result in the trial balance after recording  this four hundred dollar payment well we have   four hundred dollars Less in the bank account so  cash and Chase Bank decreases to twenty thousand   nine hundred twenty five and because we owe  security deposit lessen the future because   we just paid 400 now security deposits payable  decreases to six thousand six hundred dollars   so watch how to record this we click new  expense now the date is February 5th of 2025. and the person whom we're  paying is Rex repair shop   and of course we have to  put in the reference number and this time even though we're paying Rex repair  we're not going to put repair expense instead sec   we're going to put the security deposit payable  now of course we put the amount we're paying   and it wouldn't hurt to add the tenant's name to  the customer field in case we need extra data for   this later so put the customer name but most  importantly remember this is still a security   deposit related transaction so you must put their  name and the reason in the description field and of course you can pause the video as  I type it in if I'm moving too quickly   but these are all the fields you'll fill out  with all the information you need and then you   click save and close and the results in the  trial balance are exactly as what we expected   cash and Chase Bank decreased to twenty thousand  nine hundred twenty five and security deposits   payable decreased to six thousand six hundred  now of course it's important to look at the trial   balance but it's also important to look at the  security deposit report so we can click reports   and we can click down security deposit report and  of course we might want to scroll out a little and   you can see that the balance of security deposit  payable decreased on February 5th by 400 because   we applied 400 of Betty security deposit  to an expense that we would normally have   so let's do the next example let's imagine on  February 20 Ellen accidentally left the water   running and cost us 250 dollars of supplies we  paid Staples for the supplies with an online   payment number 9988-776 and Ellen is responsible  so it will come out of her security deposit   so what will be the result in the trial balance if  we pay 250 and take it out of her security deposit   well cash and Chase Bank decreases by 250 and  become becomes twenty thousand six hundred seventy   five and because this 250 dollars is coming from  the security deposits payable security deposits   payable will decrease and become six thousand  three hundred fifty well it's very simple we click   new expense and this is uh being paid two Staples  from the company bank account on February 20 of   2025. now don't let it pre-fill with a previous  transaction because we don't want supplies expense   we want security deposits payable and the  amount in this example that we're paying is 250.   and the reference number is 6677-889 or whatever  the reference number is now it couldn't hurt   to add the customer again here uh for you know  just to have an extra piece of data but the most   important field to fill out is the description  field with their name and what happened   and you could type in Ellen Eggleston made a flood  or whatever you like but make sure their name is   first and their reason comes second and you'll  see very soon why the description field is the   most important but anyway if we finish typing in  the proper data we can click save and close and   the results when we click reports trial balance  or exactly as what we expected cash and Chase Bank   decreased to 20 675 and security deposits payable  decreased to 6350 and don't forget to look at the   details in the security deposit report we click  reports security deposit report and you can see   because of Ellen egluston back on February uh  20th year even though Staples is the one we paid   it's clear that this 250 decreases the security  deposits payable specifically for Ellen egluston   and now it's time to try one yourself let's  imagine on February 26 Betty broke the window   and is responsible for it it costs 350 dollars  to fix we paid Rex repair shop with check number   three in order to fix it now when we record  this if you do it the proper way this is what   the trial balance will become we will decrease the  cash and cash will become twenty thousand three   hundred twenty five and you're also decreasing the  security deposits payable and security deposits   payable will become six thousand even because  you just used 350 dollars of Betty's deposit and in addition to the trial balance  looking exactly like this your deposit   report for security deposits should look  exactly like this with the new transaction   added in the right way decreasing the  security deposit specifically for Betty chapter 16. let's practice what you learned this  is what the trial balance should look like before   you start this exercise set if it does not look  exactly like this then you need to pause the   video open up your transactions and QuickBooks  online and use the techniques that we've learned   in this course to find and fix your mistakes so  that when you finish your trial balance looks   just like this before you start the exercise set  you should also make sure that your rent report   should look exactly like this so you can clearly  identify whatever the current unused rent balance   is for each of the tenants that we have recorded  transactions with so far if it looks any different   you have to use the techniques that we learned  in this course to find and fix your mistakes and   make sure that your rent report looks exactly  like this before you start the exercise set   this is what the profit and loss by tenant should  look like before you start this exercise set and   you may notice we've only had expenses with Alan  and Betty but we recorded in invoices for all four   of the current tenants so if it does not look like  this again go back and fix it with what you learn   and the security deposit report which we just  recently checked should look exactly like this   and if it does not you might have to review the  security deposit video to make sure that all of   the transactions and all of the details look like  this so that you can start with the right balance   now this is the first set of tenant transactions  you can pause the video in this position or take   a screenshot and Export it either way you should  enter these transactions very slowly and carefully   all of these transactions are transactions that  we experienced earlier in the course and if you   forgot how to record one of them you should leave  this video go to the previous video Chapter and   refresh your memory about how to record that  specific type of transaction then come back   here and try to re-enter it try to remember as  much as you can about the ones that we've done so   far because these are exactly the same these are  the remaining transactions in this exercise set   you need to do all transactions in  proper order and go as slowly as you   need to make sure that you're remembering  exactly how we did it during the course   now when you finish your trial balance should  look like this and you can pause the video   to compare it to your trial balance and if  there's any number in the body of the trial   balance that's different than yours you need to  apply the knowledge and the techniques that we   learned in this course and go back and look at the  transaction list and find and fix your mistakes   the rent report when we finish this exercise set  should look like this and again if there are any   differences use what you learned to find and  fix your mistakes and make your numbers perfect   this is what the profit and loss by tenant  should look like after finishing this particular   exercise and you can pause the video here if  you want to compare the numbers more carefully   and this is what your security deposit payable  report should look like when you finish this   exercise set so you have a good number of  transactions to record and you have a lot   of results to check carefully and hopefully if you  did make a mistake you'll easily be able to find   and fix by comparing everything one by one like we  learned in the course I wish you good luck and I   will see you in the next video lecture chapter 17  saying goodbye to tenants so what happens at the   end of your relationship with the tenant when the  tenant moves out under any circumstance you have   to settle the security deposit balance that you  may or may not have with the tenant and you have   to settle the rent balance that you may still have  with the tenant at the moment the tenant moves out   now regarding the security deposit balance there  are only three things that could happen either you   pay it back to the tenant or you keep it as a gain  if the tenant abandons you and stops communicating   with you or you could apply it to the last month's  rent if they did not pay the last month's rent   now regarding the final rent balance either you  pay the remaining unearned rent back to the tenant   or if they abandon you and don't communicate you  can keep the unearned rent as a gain or you can   write it off as a loss if they stayed for much  longer than even the rent or the security deposit   would cover it and these are the only things  that could happen at the end of your relationship   and you need to know how to record each of  these six separate events now when it comes   to these two these are the normal and perfect  ways to end your relationship with a tenant   any good tenant will still have some unearned rent  and some security deposit to pay back and it's so   so simple to handle each of these I'm going to  show you in a later video Chapter how to write   one simple check for each of these and that check  will handle all of the bookkeeping requirements   necessary to record things properly when you pay  back the unearned rent or pay back the unused   security deposit however the other four scenarios  that could happen when you end your relationship   all require two minutes of a set up step and if  you take two minutes to set up for each of these   three because you can see these two are the same  so it only takes you about two minutes to set up   for each of these three separate scenarios where  you do not have a perfect ending with your tenants   relationship and once you do that each of them  will be very simple to input and your tenants   records and general ledger chart of accounts  and financial statements will all be completely   correct so how do we set up for each of the three  scenarios when you have an imperfect ending well   the first thing you have to do is add an item to  the list of products and services and QuickBooks   Online for each of the three imperfect endings  that I just mentioned a moment ago you also have   to add two additional accounts to the chart of  accounts to be used when you record transactions   at the end of the tenants relationship with you  where the ending is not perfect and we will add   them as needed for each one and there'll be  a separate video Chapter for each scenario so   you can see how to add the items and use them in  each separate case the most important thing you   need to know about ending your relationship with  tenants regardless of the circumstance is that all   of these methods require that you find the amount  of unused security deposits and with QuickBooks   Online unfortunately you have to find that  number yourself why why can't QuickBooks Online   just tell you the amount of the unused security  deposit well we know that we have one account   for rent one account in the chart of accounts that  represents the total unearned rent and all of the   preset customer reports that come with QuickBooks  online only relate the tenants balance to that one   account unearned rent and you can have only one  account in QuickBooks Online the unearned rent   account that that syncs with and matches the total  of all tenants rent balances so you can't use that   same account again to find out each individual  security deposit balance which is separate from   Rent so how to account for subsidiary tenant  deposit records the way you can easily account   for subsidiary tenant rent records well security  deposits payable in the chart of accounts needs   to be equal to the total of Allen's remaining  unused security deposit plus Betty's remaining   unused security deposit plus candies remaining  unused security deposit well how can you do that   if QuickBooks Online is already using the reports  for unearned rent instead of security deposit   all you have to do is four to six simple clicks  and you will easily be able to isolate any   individual tenants security deposit remaining  balance all you have to do is have Excel on   your computer and ironically you do not need to  know any excel in order to do these six simple   clicks to find the security deposit balance of  any specific tenant just watch me here are the   clicks I'll sh I'll tell you about them and then  I'll show you you open the security deposit report   you export it to excel you select the range of  the data then you sort by the description column   and then you select the specific tenants  transactions to print that's all you have   to do now you can pause the video in this spot  here if you want to write this down but I'm now   going to show you exactly what the steps are and  they're very easy and you will use them every time we click reports then we go to custom reports and  go down to security deposit report now notice it's   huge and you could pull out everything yourself  you could sift through each memo and description   to find only transactions that relate to that  specific tenant and add them up yourself but you   see every report in QuickBooks Online has the  an icon that you can click to export and when   you click in the top right next to the Cog wheel  that allows you to customize the report there's   an arrow that allows you to export and when you  click on it you make the choice export to excel   now here we are in the Excel spreadsheet that  QuickBooks has exported I'm going to zoom in a   tiny bit here like this boom so you can see things  a little more clearly now we'll do the very simple   steps click and drag to highlight only the data  not the titles not the sum just the data inside   then go to the top of Excel and click data sort  now you notice that the description field that   we worked very hard to put in for each security  deposit transaction is filled out clearly and now   that's in column F in Excel so you sort by column  F and click OK notice all of Betty's security   deposit transactions are now next to each other  and you can use an elementary school calculator   or a little Excel to find the remaining amount  of deposit that Betty is entitled to be paid   back oh that's all you have to do highlight  data sort and sort on this column notice all   of Ellen's are together we can easily calculate  what she's entitled to right all of patties are   together we can easily calculate what she's  entitled to in fact if we wanted to do Betty   we could highlight we could we could click  next to the middle one in Betty and go home   sum and then just click and drag over the cells  that we're adding and hit enter and now this cell   is telling you what Betty is entitled to this cell  you can clearly see is the sum of her original   security deposit minus each of the incidents  where she was responsible for something she broke   and that's why the amount that she's getting  paid back is one thousand two hundred fifty   so you could use a hand calculator and you could  if you wanted to sift through if there's only   one or two you can use a calculator or add it  yourself but if a person broke several things   and you applied their security deposit several  times you might need four to six Clicks in Excel   to determine the final number you could even  highlight this watch you could even highlight   this and then you can click file print and it  will print only the part that's highlighted   and you can give that to the tenant as proof you  know you could even do this you could highlight   from the date so that they can remember the  incident themselves so that's how you isolate   the deposit balance and that's how you use  it and we're going to use it for each of the   scenarios that we discussed that ends your  relationship with your tenants chapter 18 .   when a tenant moves out the first thing you  have to do is determine how much of their   security deposit has not yet been used and  is therefore unapplied you need to use the   check or expense window in the same exact way  that you used the window when we had any other   security deposit transaction in order to record  paying back the tenant security deposit all you   have to do is make it payable to the tenant  and everything else in the window is the same   but what happens when you refund a tenant security  deposit and give the money back to the tenant well   we know if you're paying cash that the cash in  the bank will decrease by the amount that you paid   back to the tenant but of course because they're  paying back the security deposit security deposits   payable will decrease by the amount that you pay  back to the tenant and that will be the results so   let's think of an example let's imagine on March  1 Betty one of our perfect tenants paid 2 000 rent   in March with check number 221. this should take  us only a second to set up for the transaction   where she moves out so we click new receive  payment and it'll be March 1 in our little story 2025 we received it from Betty it was  payment method check it was check number   221 and the amount of Betty's rent is 2 000.  so this we learned and did many times and we   click save and close so now we know that Betty is  planning on staying in March but follow the story   let's imagine on March 3rd Betty  moved out due to a landlord's mistake   she is entitled to the return of March rent  and requested her security deposit back   first we must determine how much she should  get from the security deposit now we learned   that in the prior video lecture we learned if we  clicked reports and we clicked on the security   deposit report we could isolate each of Betty's  security deposit transactions where this was the   security deposit but if we go down we could  find where we deducted from that for breaking   the counter and another deduction from breaking  the window and we could pull it out one by one   but if we have many we learned in the prior  video that we can click the export to excel   and then of course do whatever you normally do in  your computer to open it up in Excel and with a   couple of simple clicks you can see that we're  right here in Excel and we have the security   deposit report available to us now we learned  that once the security deposit data is in Excel   we highlight only the data with the click and drag  motion and after it's highlighted we click data   sort and the memo description field that  we worked so hard to make perfect in the   previous videos regarding the security deposit  that's column f so we sort in this example by   column F and when we click OK you can see that  we have isolated all of Betty's security deposit   transactions if you want you can just highlight  this and click file print want to see this file   print and if you have a print is supposed  to be a print okay so if you had a printer   then you could simply give that report to the  tenant and that explains why they're getting   back that amount you could use a calculator you  could use your experience in Excel but there are   many easy ways to find the net amount I use  the previous example in the prior video where   you can go next to it and then click home sum  and then just highlight Betty's money amounts   hit enter and it tells you the amount or you  could say two thousand minus 350 minus 400   because those are the only Betty transactions  it's very rare that one particular tenant will   have many security deposit transactions so it  will never be a challenge to determine the net   amount that the tenant should receive but if  they should receive 1250 then what does that   mean for us it means now we write her a check for  one thousand two hundred fifty but if we write   her a check for one thousand two hundred fifty  what will be the result in the trial balance   well our cash and bank will decrease by one  thousand two hundred fifty and become thirty   five thousand eight hundred seventy five but  security deposits payable will also decrease   by one thousand two hundred fifty and become eight  thousand fifty and this is how you write the check   you click new and you go to the vendor column and  click check now of course Betty is not a vendor   but we go to that column to write the check  and the day we're writing the check is March   3rd the day she's moving out now the person whom  we're paying is Betty on the customer list as a   tenant and let's assume it's check number five you  know that's the next next check in succession but   now the most important thing to put is when you  click under the word category you simply choose   SEC security deposits payable and you  have to write refund excuse me Betty Boop follow the rules we learned put the tenant's name   in the description field first if it's  a security deposit transaction refund of and the amount where refunding is one thousand   two hundred fifty it doesn't hurt to have her name  in this extra piece of data and when we click save   and close we can click reports trial balance  and the results are exactly as what we expected   cash and Chase Bank has decreased to thirty  five thousand eight hundred seventy five   and security deposits payable has  decreased to eight thousand fifty chapter 9 paying back the unused rent is as easy as  one two three first you determine how much   is unused and you will do that by looking at the  tenant balance detail to get the proper number   then you simply use the check window or the  expense window to record the transaction and   it's very simple but what happens in the trial  balance when we refund any unused rent well cash   and bank will decrease by the amount we refund  because we just paid money from the bank account   and unearned rent will decrease because now  we have less of attendance balance in unearned   rent for future rent services so that number  should get smaller the moment we pay the money   back to the tenant for example let's imagine on  March 4th we returned any unused rent to Betty   we first have to look to see what she is  entitled to so if we go now to click reports   and we click tenant rent balances we  can see maybe we'll zoom in a tiny bit   but we can see for each tenant if you scroll to  the right their balance excuse me their balance   should be the number hanging all the way to the  right so if I zoom out a tiny bit we can see the   names with the balances so for example Alan has  a two thousand dollar prepaid balance now look   so does Betty Betty Boop 2000 and Ellen has two  numbers in the balance column when that happens   you look at the very bottom number and it should  match the number in bold under the open balance   950 950 900 900. so that's the way to be sure that  that's the amount of unused prepaid rent and now   we know it's two thousand so we will now pay her  two thousand dollars with transfer number eight   seven six five four so what will happen in the  trial balance if we pay back two thousand dollars   to a tenant who did not use two thousand dollars  worth of rent well we said the money in the bank   account will decrease so Chase Bank becomes 33  875. and we said that the unearned rent will   decrease by the amount we're paying back the 2000  so unearned rent will become three thousand fifty we click new expense the date is  March 4th the tenant is Betty Boop and the reference number for the transfer and the most  important thing click directly   under the word category to bring the pull  down click on the arrow and type in un   and then it will filter and you will  easily find unearned rent the amount the amount we saw a moment ago two  thousand push tab it doesn't hurt   to add her name as an extra piece of data in  case you're searching in different ways later   but now when we click save and close we  can see that in the rent report you now   owe Betty Boop zero rent because you just paid  her back and if you click reports and you click   my trial balance you will see the results are  exactly as what we expected cash and Chase Bank   became thirty three thousand eight hundred  seventy five and unearned rent became 3050. chapter 20 buying the puppy it is appropriate to apply any unused  deposit that has not yet been applied to expenses   to any unpaid rent the tenant security deposit is  still unapplied but they owe you some rent they   never paid so in a case like that it is acceptable  to take specifically the unused security deposit   and apply it to the rent balance of any unpaid  rent but in order to do this you must first   determine the remaining unapplied deposit before  applying it to the tenants unpaid rent balance now   we learned how to do this twice before we click  reports and then we go to the security deposit   report that we set up and then after we open up  the security deposit report we could sift through   each memo description one by one to find all the  transactions that relate to a specific tenant   but the trick I showed you had four  to six simple clicks export 2XL for most of you you can just double click the  Excel spreadsheet my browser doesn't always behave   perfectly but as long as you eventually get to the  spreadsheet and see that your security deposits   can be sorted in the way that we learned if you  click and drag and highlight them and then click   data sort now we sort by column f and click OK  and now we have everyone together I'll even zoom   in a little now I hope that none of you missed the  two prior videos where we did this very slowly and   learned how to do it in both of those prior videos  because what we're going to do now is discuss what   happens when we apply the unused rent well we  know that the balance of the security deposit   payable account will decrease by the amount of  the unused security deposit that we're now using   so we're making that particular tenant  security deposit balance go down to zero   so the whole account decreases by that amount  and the other account that changes is unearned   rent and unearned rent will also decrease by  the amount of the security deposit that you're   applying because the tenant now owes less unearned  rent or excuse me we owe to the tenant less rent   services in the future because we just decreased  that amount by taking their security deposit   and remember it not only changes in the  chart of accounts it should also change   in the tenants records so that we can see the  specific tenants rent balance has also decreased   so how do we set up for applying  deposits to the unearned rent   we must put a new item on the list of products  and services in our QuickBooks Online we must   connect the item to the account called security  deposits payable and the name of the item in   our example will be called security deposits  applied it's very simple we already know how   to click the Cog wheel and go over to all lists  and we click the list of products and services   now I might have to zoom out a bit and you can see  we already have been here before and we already   have added items of service now we're going to add  another item called security deposits applied so   what do we do we click new now we will make it a  service and it is called security deposits applied and of course you can pause the video for a moment  and type it in and now the category is excuse me   the category we will not use but we will come  down to income account now this is not an income   item we will connect this to the account s e c  security deposits payable and that's all you have   to do give it this name make sure it's a service  and connect it to security deposits payable and   save and close now we're all set up to apply the  tenant security deposit to their unearned rent   for example let's imagine on April 3rd Peter  problemhead is formally declared lost at sea   it is clear he will not pay the remainder of  February rent nor will he pay March's rent we   will apply any unused unapplied security deposit  to the rent balance to decrease what he owes in   unpaid rent so exactly how much rent does he owe  what do we have to do to find that out let's check   Peter's rent report and find out well it's very  simple we click reports and we go down to tenant   rent balances and click on it and you can see if  we go down to Peter problem head at the bottom   remember maybe we zoom in a little to help the  folks at home right you can see for Peter problem   head the balance here at the bottom here and here  this is the release of the numbers thirty eight   hundred dollars So at the moment he was declared  at sea at the uh lost at sea at the end of March   he owed three thousand eight hundred dollars for  six weeks in back rent basically so what do we do   well if we determine that he owes thirty eight  hundred dollars then the next thing we do is   see how much of his unused deposit he has actually  left to apply to that thirty eight hundred dollar   rent balance so we will take the sixteen hundred  dollars that we just determined is the amount to   apply and we will apply it to Peter's unused rent  balance now when we do this we know that both the   security deposit and the unearned rent account  will decrease by the sixteen hundred dollars   remaining in their security deposit so what  will be the result in the trial balance after   recording this transaction well we know security  deposits payable will decrease because we have   sixteen hundred dollars less available so that  will become six thousand four hundred fifty but   unearned rent will increase because Peter has a  negative balance and it goes more negative and the   result in the unearned rent account will be four  thousand six hundred fifty but how exactly do you   record a transaction where you apply a security  deposit to attendance balance what you do is   you record a credit memo and you record a credit  memo on the day that he was declared lost at sea   so we click new credit memo and we put  the date maybe I'll zoom out a little   and we put the date April 3rd in our little story  2025. the person is Peter and we click directly   under products and service and we click the pull  down arrow and we choose security deposit applied   and a moment ago we determined that his  security deposit that we are applying   is sixteen hundred dollars and when we  click save and close we can click reports   trial balance and you can see the results are  exactly as what we expected you can see that   unearned rent has increased to four thousand six  hundred fifty and security deposits payable has   decreased to six thousand four hundred fifty  now how much rent does Peter still owe because   remember we determined that he owed 3 800 and  he only had 1600 left for his security deposit   so he should still owe two thousand two hundred  dollars and the rent report should reflect that   so we click reports and we go down to tenant rent  balance and click on it and when we scroll down to   Peter you can see he still owes two thousand  two hundred dollars in unearned unpaid rent   chapter 21 writing off on collectible rent writing  off uncollectible rent earned may be necessary   after applying any available security deposit  there still could be some additional unpaid   rent owed to you the landlord you should have an  invoice for each month the tenant stayed so that   there is a permanent record of what you actually  earned from the tenant the earned rental income   that was recorded from those invoices will be  offset by the expense you record for the loss   of uncollectible rent now that expense in a normal  company would usually be called bad debt expense   but because we're a landlord or rental property  company we will call the bad debt expense loss on   uncollectible rent and the account type is expense  and the detail type is bad debts so how do we do   that we scroll down and click accounting chart of  accounts now in the chart of accounts we click new   clearly this is an expense so we save it under  expenses and the tax form section that is the   detail type we click bad debts now in capital  letters we type loss on uncollectible rent and of course you could pause the video and  type it in yourself if I'm typing too quickly   but once your account looks like this we  click save now we're not finished setting   up for uncollectible rent in addition to the  expense account that offsets the income that   we earned but never collected we must also put an  a new item on the list of products and services   and we must connect the item to the account we  just created loss on uncollectible rent and we   will call it uncollectible rent written off and  that will be the name of the item so we click the   Cog wheel and we go over to the list of products  and services and then of course we click new now   this will be a service so we double click and we  will scroll down to make sure that it's connected   to lo you know you can l o s s it will filter it  for you click on the account loss on uncollectible   rent and we want the name uncollectible  rent written off so we go to the name and of course you can pause the video if you  need to type it in more slowly save and close   and now we're ready to actually write off one  of the tenants balance so what exactly happens   at the moment we write off an unpaid uh a tenant  uh who can't pay well we know that unearned rent   will decrease because we're removing the  balance from the tenants uh we're removing   the tenants rent balance from the unearned  rent and if you have one fewer tenant it   means that you have less unearned rent and that  should go down and of course the account called   loss on uncollectible rent should go up by  the amount of rent that you're writing off   and of course in the tenants subsidiary details of  the specific tenants balance that tenant's balance   should be zero when we finish this process  for example let's imagine on April 3rd Peter   problemhead was formally declared lost at sea  now we asserted this in our previous video and   in our previous video we already depos we already  applied his remaining security deposit to some   of the unpaid rent balance but there's still some  unpaid rent balance left that we have to write off   the rent report will show us how much uh remains  of Peter's unpaid rent to write off so we will   check the rent report to find out exactly how  much rent he owes so we will click reports   and we go to custom reports and go down to tenant  rent balances and when we go down to Peter you   will see Peter problem head we uh still owes us  two thousand two hundred dollars of unpaid rent   that we earned and made invoices for and keep in  mind this is after the previous video where we   already applied his remaining security deposit to  decrease this so this is the decreased amount and   the amount he owes and the amount that we're going  to write off now remember unearned rent goes down   loss on uncollectible rent goes up by the amount  we're writing off two thousand two hundred dollars   so what will be the result in the trial balance  at the moment we record writing off Peter's rent   well loss on uncollectible rent is going to show  up in the trial balance for the first time as two   thousand two hundred dollars and keep in mind the  unearned rent becomes a larger number because it's   more negative and it's more negative because we  remove the invoices that were a positive balance   so if you understand the positive and negative  nature of unearned rent like we talked about   earlier you'll understand that this will be the  result after recording writing off the balance   and exactly what window do we use to record  writing off the balance how do we record this   we make a credit memo very simple we click new  and in the customer column we click credit memo   now the day we well the person whom we're  writing off is Peter problem head and we   know that the date we're writing him off is the  date that we were informed he was lost at sea   and what we do here on the bottom watch carefully  we click directly under products and services to   bring the arrow and we choose the item that we  just created uncollectible rent written off then   we simply put the amount of Peter's balance that  we're writing off and we're done and this one   credit memo with the item we created connected to  the account we created will work and we click save   and close and now let's check our results of the  trial balance reports trial balance and you can   see the results are exactly as what we expected  loss on uncollectible rent showed up for the first   time as two thousand two hundred and unearned rent  increased to a larger negative because we removed   the positive number by removing the invoice from  unearned rent and it became six thousand eight   hundred fifty but now let's check the subsidiary  records reports tenant rent balances and you   can see Peter problem head is no longer on the  rent report because he no longer owes any rent gain from abandoned deposits and rent   tenants sometimes do abandon their own money it  is rare but a tenant may leave and not communicate   with you while still having some time left in  the apartment or in the unit that they paid for   they also may have a security deposit  that they never asked for the return of   this is unexpected income and not part of your  normal operation so in a case like this what you   need to do is create an account in the chart of  accounts called gain on abandoned rent or deposits   and this will reflect income from any abandoned  funds the type of account will be other income and   the detail type will be other miscellaneous income  and we already know how to create this we know to   scroll down and click accounting chart of accounts  then when we're in the chart of accounts click new   now we know that this is an income type of  account but it will not be under income it   will be under other income and the tax form  selection will be other miscellaneous income   then of course the name we put in capitals and of course you can pause the video  if I type a little too quickly for you   but make sure this is the name  in all caps and then click save   so now we'll set up just for recording the gain  on the abandoned rent to do that you must put a   new item on the list of products and services and  you must connect the item to the account we just   created gain on abandoned rent or deposits and we  will call it abandoned rent well it's very simple   we click the Cog wheel we go to the column of  lists and we go down to the list of products and   services and if you remember how we did this with  the all the other items we created we click new   now of course this is a service and  the name of it will be abandoned rent and of course you can pause the video if I'm  typing too quickly and once you put the name   the only other piece of information is the  income account attached and you can type in   G A to filter it to get gain on abandoned  rent or deposit save and close and now we   have the item on the items list that will  help us record abandoned rent as a game and   now we're ready to do an example let's imagine  on April 3rd Patty perfect went to find Peter   she left us a note that she is not coming back  and we can keep April's rent and still move   someone in now I know that's an extreme example  but you should know the circumstance under which   you're allowed to acknowledge that the abandoned  rent is actually your gain so first let's settle   her rent balance now in order to do that we  have to look at the rent report by clicking   reports and go down to tenant rent balances  and scroll all the way down so that you can   see specifically for this tenant Patty perfect  the amount of unused rent that she's abandoning   two thousand dollars so two thousand dollars  will be our gain that means when we record   this event unearned rent will decrease by the 2000  because we have two thousand Less in unearned rent   but gain on abandoned rent or deposit will  increase because we have more of a gain because   somebody abandoned the unused rent and we also  have to make sure that when we finish recording   this that the tenants rent balance is zero in the  tenants records so what will be the result in the   trial balance when we record for the very first  time attendant to abandon their rent well gain   on abandoned rent or deposit will show up for the  first time in the amount that we actually gained   two thousand dollars which means we have two  thousand dollars Less in unearned rent and   unearned rent should become four thousand  eight hundred fifty dollars when we finish   so how do we record this well very simple now  that we have an item on the items list all we   have to do is make an invoice so how do we  do that well it's very simple we click new   invoice now we know the date that the  deposit was abandoned was April 3rd   of 2025 in our little story and the customer or  the tenant who abandoned it was Patty perfect   now all we have to do is Click  under the words product and service   click the pull down and then choose abandon  rent the item we just made then we put   2 000 and then click save and close now when we  go back to the trial balance we click reports   my trial balance and you can see gain on  abandoned rent or deposit showed up for   the first time as two thousand and unearned rent  decreased to four thousand eight hundred fifty   now we also have to click reports tenant rent  balances and confirm Patty is no longer in the   rent balance report which means she no longer  has a rent balance it means we did it properly   now we'll settle the security deposit balance  well we have to first find the unused unapplined   amount and we did that several times in this  course it's Seventeen hundred dollars but how   do I know that well let's remind ourselves  we click reports security deposit report   and you should remember clicking export to excel  now everybody exports to excel differently because   everybody's browser is set up differently but  once you export to excel you should be able to   find the number you're looking for within a  matter of seconds so we learned in the prior   videos what we have to do is highlight the data  and then sort and that's a very simple thing to do   all we have to do so I'm moving around a  little but all we have to do is make sure   that we've included all the data and then  we click and drag just on the data part   and then as we've done several times we click  data sort and we're going to sort on column   F because that's the important column when it  comes to security deposit when we click OK we   can see that Patty perfect actually had two  security deposit transactions we received 2   000 on January 1 and then on February 15th we took  300 of her deposit and applied it to some damages   that means the remaining amount is 1700. so what  do we want to happen in the trial balance at the   moment we remove her security deposit from the  security deposit payable account and put it into   the gain well security deposit payable should  decrease by the amount that we're taking out   of the security deposit payable account and the  reason it's decreasing is we have a gain so we   now have more gain we gained more because somebody  abandoned their security deposit and the amount   will be 1700. so if we know it's 1700 the question  is how to record this well I'll tell you in this   case we have to make a journal entry now don't be  intimidated let me explain what a journal entry is   it's usually done by accountants it's a window  to enter anything that cannot be recorded in a   normal transaction window and you don't need  to know any accounting to settle the security   deposit balance and Gain just follow me step by  step and you will see that making the journal   entry when someone abandons the security deposit  is very easy and you could use what I'm about to   show you as a model so that all you have to do  is re-watch the video or just remember the two   or three simple steps anytime somebody abandons  their security deposit so what do we want the   result to be in the trial balance at the moment  we acknowledge somebody abandoned their security   deposit well security deposits payable should  decrease by the 1700 that was just abandoned   because we're taking it out so if we do that  security deposits payable should become 4750.   and because that 1700 is a gain it means gain on  abandoned rent or deposit should increase to three   thousand seven hundred so this is how we make  the journal entry it's very simple we click new   we go all the way to the right to the column of  other and we go down and we click journal entry   now just follow the steps the first account we  click on will be secure s e c security deposits   payable and in the debit column we put the  money amount that we determined a moment ago   and it helps to put an extra piece of data  on the right where we put the person's name   then click in the next row under security deposits  payable click the arrow g-a-i type in gain on   abandon rent and the computer knows that the 1700  for gain goes in the credit column just to be safe   add Patty as an extra piece of data this is all  you have to do take a look take a screenshot with   somebody abandons their security deposit record  the date that they demand abandon it and record   this exactly in this way the security deposit  the gain the debit and the credit and now when   we click save and close and click reports trial  balance the results are exactly what we need them   to be unearned rent and security deposit payable  are correct security deposit payable has decreased   to 4750 and gain on abandoned rent or deposit  has increased to three thousand seven hundred   chapter 23 automation for landlord transactions  using the recurring transactions feature   landlords will benefit more from  the recurring transaction feature   than any other type of business the recurring  transaction feature allows transactions that   will happen at a regular interval to be recorded  automatically by QuickBooks Online instead of you   this is great for rental property owners  because each month's rent invoice is usually   the same amount and the same time each month even  reliable tenants rent payments could be memorized   and repeated in this way so you don't have to  bother recording anything that's going to happen   on the same day with the same amount at the same  time so how do you use the recurring transaction   feature well you first create the transaction  that you would like QuickBooks Online to repeat   monthly like the tenants rent invoice once it's  created in the normal way as a natural transaction   you have to reopen it and then click at the  bottom of the window the words make recurring   then the selection that opens will allow you  to explain to QuickBooks Online exactly how   to record and enter each future recurring  transaction of this nature and after saving   the recurring settings you can see the memorized  transaction displayed on the recurring transaction   list that's how you know you saved it and you  did everything right for example let's reopen   the February 28th invoice for Allen and make  it recurring and see what this is all about   now the report that I like to use when looking  for a specific tenants transaction is the   transaction list by tenant so if we open  Allen's information right here with this   little triangle we can see that there's a  February 28th invoice and we double click   now it already exists as a normal Transaction  what we're about to do is Click make recurring   now this middle section here opens up for us to  be able to put in the details about how it should   be recurring most transactions that require are  monthly especially for a landlord and it's fine   that it can be on the first day of each month or  any particular day of the month that you want you   can have it do every other month every quarter  whatever you like but the most important thing to   pay attention to here is the start date there's  something very important you need to remember   you see the start date is the date of the first  automated entry the first day in the future   that you want QuickBooks Online to record this  automatically and the rule is it cannot be before   the date that you are setting it up as recurring  meaning the date in real life so the desktop   version you can go back and put a pass date  and reopen the file and it will record all the   reoccurring transactions that were scheduled from  the past date till today that's not the case with   QuickBooks Online you can only schedule future  reoccurring transactions with QuickBooks Online   so we'll check the reoccurring transaction list  after we save it so the start date let's make   it March because this one is February March 1  and make sure we make it March 1 of our little   story 2025. this way we will not get an error  message from QuickBooks online now when we   save the template we're done we don't have to do  anything but you should check to see if in fact   this reoccurring transaction is on the list and  the way to do that is to click the Cog wheel and   go over to lists now I'm lucky that the recurring  transaction list is showing up if you don't see   this choice you would have to click all lists  and then you'd have to scroll down and you'd   have to find the recurring transaction list but  luckily we click list and for me it's right here   and you notice the invoice that we just saved is  here it's the only one on the list and of course   you can edit this right from the list if you  click edit you can change anything about the   invoice itself like the monthly money amount or  you could even change how it's supposed to reoccur   but now that we've confirmed that it's on the  list what should we expect what happens now well   all you have to do is log in on the day of the  next reoccurring transaction the next day that   it's scheduled you will see it has been recorded  exactly as if you did it yourself the totals will   change appropriately in the trial balance and  the reports that list the transactions will also   list this one now I have a funny story that I'd  like to include as part of this video in a prior   QuickBooks online course I did an experiment to  see exactly what time the recurring transaction   is recorded after midnight and I tried waiting up  for the recurring transaction like a kid waiting   up for Santa Claus and I didn't quite make it  so what I'm going to now give you is a little   excerpt from another QuickBooks online course  called QuickBooks Online for home finance now you   don't have to take the full course I just wanted  you to know that for that course as well I taught   about how to schedule a recurring transaction and  I've tried to stay up like a kid waiting for Santa   Claus and I learned something interesting about  the recurring transactions so this little excerpt   this little clip you're about to see comes from  from the QuickBooks Online for home finance course   and it gives you a little interesting perspective  about memorized and recurring transactions but   either way this can be your best friend if you  have a lot of reliable tenants so that QuickBooks   Online does most of your bookkeeping for you  please enjoy the following clip trial balance   Chase Bank and you'll see January 3rd expense  to Dr Kirk for vet bills two hundred dollars   now the lesson is finished and you don't have  to watch the rest of this video however in a   different QuickBooks online account I set up a  recurring transaction I input this right before   midnight on December 7th 2020. I set it up as  daily so it would be entered by QuickBooks Online   as soon as it became December 8th let's take a  look at the video and see what happened so this   is the reoccurring transaction that I saved and  it's two minutes before midnight on December 7th   and if we quickly take a look at the trial balance  reports sorry trial balance these are the numbers   for All Dates right before midnight on December  7th these are the numbers so you can rewind the   video to this point but if we click the Cog wheel  and we click reoccurring transactions you can see   oh it's 11 59 you can see the one that I made  I made the next date is December 8th and it's 5   000 and if I open it up by clicking edit you can  see that it started today but I didn't record one   today on December 7th and you can see that it's a  daily once a day for five thousand dollars it will   increase telephone expense and for five thousand  dollars it'll increase Citibank credit card and   neither of those balances were even close to five  thousand but right after midnight you see here   right after it hits midnight because it begins  today but I didn't record it and the next one is   on twelve eight it said the next doing that out  of the window it said the next one's on twelve   eight so it's almost 12 8 so as soon as it's 12 8  it will be a 5 000 increase in telephone expense   and five thousand dollars increase in the city  credit card and this will be this will have been   recorded for the first time so watch it hear it  uh now it's it just turned so it is now Tuesday   December 8th at uh 2020. now let's see how soon  it updates it account us um reports trial balance   nothing yet okay so this says cash uh Tuesday  December 8th 2020 at 1202 a.m gmt5 I don't know   what that means so it didn't update it yet but  QuickBooks is in California so we'll be checking   in every 15 minutes or half hour to see when the  what time the memorized transaction is recorded   I actually instead fell asleep and woke up  at 10 30 a.m the next morning on December 8th   now here we are the next morning on December  8th at 10 25 a.m and if we click reports   and then we click trial balance you can see that  the five thousand dollars was added to the balance   of the credit card and the five thousand dollars  was added to the balance of telephone expense   now you may well ask what time in the morning  because we check to see if it happened right   after midnight on Eastern Standard Time and  it did not but it definitely happened before   10 27 a.m Eastern Standard Time so of course to  find out the exact time that anything happened   we would open the audit Trail click the I uh  the Cog wheel and then we go over to audit log   now you may well ask what is the audit log well  it is a list of every activity that has ever been   done in the account from the very beginning for  each activity it includes the date the time who   did it the activity itself what activity it  was and if it was a transaction it will show   transaction details it cannot be erased or Changed  by anyone ha ha and then we go over to audit log   now we can see I logged in this morning but we  can see at 4 12 a.m Eastern Standard Time which is   just a few minutes after midnight in California  they added an expense on December 8th for 5   000. so this is the date and time that the  5000 was recorded as per what we set up with   automatic transaction thank you so much for  watching this video all the way to the end I   really appreciate devoted students and  it makes me want to help you even more   and you may well ask now that you really do know  everything that a landlord needs when managing   their books and records and QuickBooks Online what  would be next to learn for any landlord who wants   to learn more well right here on this very website  is an advanced landlord QuickBooks online course   that follows from this one it's the sequel to  this course and in the sequel to this course you   will learn any possible remaining rental property  transaction for the different types of landlords   who have different situations that other landlords  do not have so you just finished learning every   possible thing that all landlords will need but  they're still more all landlords have different   situations and the advanced sequel that is here  on this very website will show all of that for   example you will learn how to manage your leases  between you and your tenants you will get reports   that show the progress of the lease based on the  time and the money value of the lease compared to   the time that has gone by you'll be able to see in  these reports how many months remaining on a lease   how much money was earned and easily calculate the  remaining value of the lease if necessary and you   can set that up and use that if in fact you use  leases and you're using QuickBooks Online you will   also learn about shared utility costs and other  reimbursed costs there are things that you will   Bill your tenant for that you actually pay for as  a business expense and the Tenant is reimbursing   You by way of you putting that cost onto the rent  invoice with the late fee and everything else   so if you pay all the electricity for everyone and  you Bill everyone separately for their electricity   then this chapter would be for you and the last  Arrangement that only some landlords have that   most others don't is giving credit to decrease the  rent balance for tenants who perform services for   you so that happens once in a while and you'll  be able to manage that and keep accurate records   but the most important topics in the advanced  video will be flipping houses that's right I get   requests from people all the time how to record  transactions when you flip houses I'm going to   show you how to purchase a home with or without a  mortgage and you'll be able to track the mortgage   balance and be able to tell the principal  versus the interest on each mortgage payment   in addition to managing the mortgage you'll also  be able to record Renovations in the proper way   and record the property sale pay off the mortgage  and calculate either the gain or the loss on the   sale of the property and all of these things  are clearly shown and explained in the flipping   houses section of the advanced video right here  on this website and finally if you're someone who   has special reporting needs if you're showing your  financial statements of your properties to Banks   if you want to get a loan or possibly go public or  any other Advanced reason we will address all the   reporting issues for generally accepted accounting  principles you'll learn how to get profit and loss   by building or groups of apartments in one report  and you'll be able to separate the late paying   tenants from the good tenants and put those  numbers in the proper accounts when reporting   your financial statements and of course I'm also  going to give you Advanced ways to find and fix   things so that no matter what type of company you  have you will be an absolute expert in QuickBooks   Online and I really appreciate everyone who  stayed devoted to the course I want you all to   have confidence that you all know everything  you need and please stay in touch [Music]

Channel: thequickbooksdude

Views: 2,612

Keywords: QuickBooks Online For Landlords, Property managements apps, property managements software, landlord software, rental property management, QuickBooks training for landlords, tenant records, property records, management reports, property reports, property transactions, tutorial for landlords, QuickBooks online classes for landlords, QuickBooks course for property owners, how do landlords use QuickBooks online, QuickBooks online help for landlords, QuickBooks online help

Id: xOR5a6pI-kk

Length: 233min 27sec (14007 seconds)

Published: Tue Apr 25 2023