Fortunately, you can follow these three accounting tricks to keep your QuickBooks LLC setup under-control and well-organized.
Trick #1: Pretend the LLC Is Something Else
A limited liability company, for tax accounting purposes, is always treated as something else. For example, a one owner LLC (also known as a single member limited liability company) operating a business is treated as a sole proprietorship. An LLC with multiple owners that operates a business is treated as a partnership.
What's more, both limited liability companies with a single owner, or member, and those with multiple owners, or members, can make tax elections to be treated for tax return purposes as regular C corporations or as Subchapter S corporations.
And all this leads to the first tip for setting up QuickBooks for an LLC. When you run the QuickBooks EasyStep Interview to setup QuickBooks, don't indicate that you're setting up QuickBooks for a limited liability company. Rather, specify that you're setting up QuickBooks for the type of taxpayer the limited liability company be treated as.
For example, if you're a one owner LLC that hasn't made any special elections to be treated as a corporation, tell QuickBooks you're a sole proprietor. If you're a multiple member limited liability company (members are LLC owners) that hasn't made any special tax elections, indicate to QuickBooks that you are a partnership. And if you have made an election to be treated as a C corporation or an S corporation, tell QuickBooks that's what you are--a C corporation or an S corporation.
Trick #2: Combine Child and Parent LLCs in a Single QuickBooks Datafile
A common asset protection technique is to have a parent LLC or a parent corporation own child LLCs. A retailer with three locations, for example, might put each store location into a separate LLC. These three child LLCs might then be owned by a parent LLC or parent corporation.
Separate LLCs, however, shouldn't be segregated into separate QuickBooks datafiles. Rather, the LLC's accounts, income and deductions should be tracked within the parent's QuickBooks data file.
This combination seems (at first glance) just plain wrong. But here's the logic. In a parent-child structure, the child (so to speak) is owned by the parent. And that means for tax accounting, you combine the income and deductions of parent and the children. That combination means that both the parent LLC's and the child LLCs' income and deductions need to be combined into a single QuickBooks data file.
One caution, however. Because each LLC (whether parent or child) is a different legal entity, you should use separate QuickBooks accounts for each LLC's separate assets and liabilities.
For example, each LLC might have its own bank account within the QuickBooks data file. And each LLC should track its own accounts receivable, furniture and fixtures, and liabilities with separate, specific-to-that-LLC accounts.
Trick #3: Customize Forms for Each LLC as Necessary
If you're working with parent-children LLC situation, one other setup tip should be mentioned.
While for tax accounting purposes, you can and should combine the parent LLC and the child LLC transactions, you still want to recognize and visually highlight the separate legal identity of the parent LLC and of any child LLCs.
Within QuickBooks, a practical method for doing this is to customize forms for each LLC. An LLC with its own bank account will have its own check forms of course. And those check forms will have the LLC name on them.
But go a step further than that. If an LLC invoices customers or clients or sends a customer or client statements, that LLC should have its own customized invoice template or statement--one that uses that LLC's name.
Similarly, if an LLC issues purchase orders to vendors, that LLC should have its own purchase order template that uses the LLC's name.
Each QuickBooks form window includes boxes and buttons for creating customized forms.
The first thing that I have found when marketing a small business is that it is time consuming and highly frustrating, especially if you are self-employed or have a small number of employees. Running a business of any kind is not easy and when you are marketing a small business, you can find yourself spending a huge amount of time without much to show for it.
The best way to get over the frustration of marketing a small business is to check what audience you are targeting. Every service, product and business has an audience that it caters too. Once you have determined the target audience. The next step is to look at the demographics of that target audience. What are the income levels, what is the average size house and so forth. This information is available through the web. However, depending on the target audience you may have to do a little searching. Government websites are a good source of information for demographic information, as are some university websites. This information is generally available to the public free of charge.
Once I determined the target audience and gathered the demographics of that audience, it was time to set up ad copy. Ad copy is going to be different for every business depending on the audience and placement of the advertisement. However, it is important to make sure that the advertisement is correct both in content and is consistent with the demographics of the target audience.
The next thing I did was a two-fold process. The first was to build a website that consisted of information about my company and what I had to offer my target audience. I made sure the website was completed before posting it. This is important. A website is like a first impression and under construction signs, usually do not invite a second visit.
My next step after creating my website was to submit my company information to the search engines as part of the online yellow pages. I noticed myself that when I went to look for something in my area no matter what it was I did not hit my phone book for the number, location or what was available in the area, I went online and did a Google search for what I was looking for and the location. This is a great way to promote business without having to add to the overhead of your company. If you have a large ad in the regular yellow pages, you might find it more advantageous to redirect some of those funds to online sources of marketing.
Finally, I looked into advertising options such as the radio, Google ads, and promotional offers. I asked around and found out a few related events were happening in the area, dropped off my product to the events, and just asked them to give them away to anyone who was interested. It generated a decent amount of interest and publicity and it was relatively inexpensive to do. I also checked out related newsletters and groups in the area that had advertising either through newsletters or email.
Both Stephen Nelson & David Ledoux are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Stephen Nelson has sinced written about articles on various topics from Finances, Setting Up Company and Tax Deductions. A Seattle-area tax CPA, Stephen L Nelson wrote both Quicken for Dummies and QuickBooks for Dummies. As a adjunct tax professor, he also taught the popular Golden Gate University graduate tax course,. Stephen Nelson's top article generates over 90500 views. to your Favourites.
David Ledoux has sinced written about articles on various topics from Real Estate, Marketing Tips and Marketing. David Ledoux is an author, speaker, trainer and mentor to entrepreneurs. His newest report The Small Business Death Sentence can be downloaded for free at