Users who are already using QuickBooks will be amazed to know that the QuickBooks accounting software can be a befitting option for real estate as well. QuickBooks is a choice of millions of users around the world. Know how to enter rent received in QuickBooks.
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What we Will Learn Today?
Today, we will learn about “How to Enter Rent Received in QuickBooks Accounting Software”.
Here are a few important points to know before we proceed:
- To record the rent received in QuickBooks accounting software requires numerous steps, and we need to ensure about entering the correct information about the while recording the entries.
- QuickBooks is designed for all types of businesses like small to medium used by every type of business, so it is not that instinctual to use for entering the rent received.
- We can enter the rent received in QuickBooks by producing an invoice and recording a payment, or we can also make the direct entry in QuickBooks while we receive the rental income.
What is the Process to Amend the Default Deposit Settings in QuickBooks?
We can get rid of the unnecessary hassle of depositing rent into an Undeposited Funds account and then moving funds to an actual bank account. Not to mention, for many users it is an unnecessarily difficult process.
Below are a few steps mentioned which can assist the users to amend the QuickBooks settings to deposit rent receipts directly into a bank account:
- First, you need to navigate to the Edit menu from the Home screen and choose the option of Preferences.
- After that, choose the Payments option from the list and navigate to the Company Preferences tab.
- You need to uncheck the Use Undeposited Funds As a Default Deposit to Account checkbox and press OK
- The bank account to deposit a rent payment can be chosen every time when we receive the rent once the Undeposited Funds default has been unselected.
What is the Way to Record the Rent Received in QuickBooks Accounting Software?
There are a multiple ways to record rental income in QuickBooks, one is by recording the rental income when it’s received or by creating an invoice and record the payment against it. In QuickBooks Accounting Software, we use rental property as a Class, a tenant as a Customer, and every rental income is a Product.
1. Record the Rental Income When Received:
Sometimes landlords never mind sending an invoice every time to the tenants when they receive the rent, and it’s logical. In addition to this, the rental amount and payment due date is always similar. In these types of scenarios rental incomes can be entered in QuickBooks Accounting Software when they are received.
Below are a few steps given which will help us know how we can enter the rent QuickBooks accounting software when received:
- Firstly, you need to go to the Customer menu from the home screen and now choose the Receive Payments option.
- Secondly, you are required to select the Receipt Account from the Accounts drop-down menu and choose the accurate Tenant from the Customer list, and now you need to enter the amount of the rental payment.
- You can select the group with other undeposited funds if multiple rent payments are being entered at the same time and now choose option next to enter the remaining rent receipts.
- And lastly you can Save and then Close.
2. Receive Rent Against an Invoice:
An invoice must be created before receiving the rent payment. In some cases landlord wish to provide the monthly invoice to a tenant to bill for any additional charge, like electricity or water bill or any late charge if there is any, and it’s also serving the purpose of a reminder that the rent is due. Here are few steps given to adhere to create the invoice to record the rental entry in QuickBooks accounting software in this way:
- Firstly, you are required to open the Customer menu from the Home screen and choose the accurate Customer name and post that select Create Invoices and Add New.
- Once these steps are done now you need to enter the rent charges, you must be ensured that correct product is chosen which corresponds to the type of rental income and the correct Class if there is more than one rental property or unit and now choose save and close option to complete the steps.
Once the invoice is created now you need to adhere to the below-mentioned steps to receive a rent payment in QuickBooks accounting software:
- First you need to open the Customer menu from the Home screen and choose to receive Payment.
- After that in the drop-down you need to open the Received and choose the Customer name.
- Now write the Amount received.
- You need to be sure the correct date is entered for the rent payment was received.
- Now, select the Payment method and choose the Invoice to pay option
- Choose the save and Close option once you are done with the above-mentioned steps.
So we are well aware about How to record rental income in QuickBooks. Now we will learn about how to make deposits in QuickBooks after rent has been received.
By default Rent payments received in QuickBooks are deposited into an account named Undeposited Funds. Below are a few steps mentioned which will guide us to transfer funds to an actual bank account from an Undeposited Funds account:
- Firstly, you need to open the Banking menu from the Home screen and choose the option of Make Deposits.
- And now, navigate to the Payments to Deposit window and choose the payments to deposit and click ok.
- From the drop-down menu you are required to choose the Deposit To option.
- Select the accurate banking account for the property and save and Close it.
The steps given above can assist you to get rid of any issue however if in case you still face the challenge then do not hesitate to connect with Dancing Numbers team via LIVE CHAT.
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How QuickBooks Accounting Software Works for Landlords?
Landlords can use the QuickBooks Accounting Software in the following ways:
Best QuickBooks Alternatives for Landlords
Best Overall Accounting and Reporting Software
Best for Tax Preparation
Best for Expense Tracking
What is the Reason for Complication while Recording Rental Income in QuickBooks Accounting Software?
In QuickBooks Accounting Software maintain the record for the rental income relatively complicated. It can be a tough task to set up a rental property in QuickBooks, maybe that’s the reason why the company provide the service of the live Bookkeeping expert support to assist with the setup at very reasonable price. However, it may be worth to pay some amount for the better service to ensure that accounts are correctly set up to start with. One reason QuickBooks is difficult to use for rental property is that the software is not particularly mentioned for the real estate industry.
Is it Possible for Landlords to use QuickBooks for the Rental Properties?
Many real estate investors choose QuickBooks simply because it is a name they are most familiar with. QuickBooks accounting Software is identical for accounting however, it’s not the best choice for rental property owners. This is due to the specific requirements of real estate investors. However, yes it is possible for Landlords to use QuickBooks for the rental properties.
What are the Options for Rental Property Accounting in QuickBooks Accounting Software?
There are few options for Rental Property Accounting in QuickBooks Accounting Software given below:
Property Management Software