QB Online, Escrow and Operating bank accounts- record sales

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#1
Posts:
71
Joined:
19-Sep-2019 3:08pm
Location:
Baltimore, MD
Hi Everyone,

I would really appreciate help on this.

I have a client that is a Real Estate agent. He has an Escrow bank account where he holds funds belonging to the buyer until they close on the house. When they close, he transfers the money from the Escrow account to his operating account.

I need to do two things:
1. Record the outgo from the Escrow account to debit the liability of contra escrow account and credit the Escrow bank account
2. Record the incoming transaction in the operating account as Sales to show it is income.

What would you suggest the best way to record this would be?

Thanks!
 

#2
Posts:
2887
Joined:
21-May-2018 7:50am
Location:
Northern MI and Coastal SC
I maintain accounting for several trust accounts. Unless you have software dedicated to being able to track it, and Quickbooks is not it, then you will need two sets of books (and thus two subscriptions)--one for the Trust, and another for the actual operations. Otherwise, it gets VERY messy and violates laws in most states concerning Trust accounts.

When I need to track source of escrow funds per specific entity, I set them up as customers and receive a payment against their account, which creates a credit balance and debits the Trust account. When it comes time to pay out the escrow funds, you write a check against A/R and code to the customer so it debits the credit balance. When done properly, it will eventually equal zero by the time all funds are disbursed or returned.

For a real estate agency I had and tracked their Trust accounting, the customer ID was set up as the MLS number and broker-in-charge since they had multiple locations. Class was used to track the BIC since it is generally the BIC that is responsible for that office's escrow. If multiple escrows ended up existing for the same MLS #, it was appended with a B, C, etc., depending on how many prior escrows had existed for the same MLS #.
 


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