I have an LLC which holds two separate DBAs. Each business has its own checking account. Most expenses are distinct, but some, like office space and internet are shared expenses. How can I properly pay for and record these expenses in my books? Is it wise to open an additional checking account specifically for shared expenses?
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Can you write two checks for these expenses, one from each DBA checking account, each for half of the amount? (In the Internet age, or even just with QuickBooks generating the checks for you, this shouldn't be as back when they were hand-written.)– RonJohnCommented Nov 20, 2019 at 3:09
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Some vendors won't accept partial payments. These are the kind I would put on a credit card and then pay half from each checking account. But I'm wondering if there are better solutions.– user91716Commented Nov 20, 2019 at 3:54
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1For those of us not in the know - what is a DBA?– LawrenceCommented Nov 20, 2019 at 7:16
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Scratch that. I managed to find it on my second try: “Doing Business As”, also known as a business name.– LawrenceCommented Nov 20, 2019 at 7:21
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Given that the two DBAs are part of the same LLC, is there any need to formally share the expenses between the two DBAs? It doesn't matter for taxes. If you want to compute profit of each DBA, you can take it into account then.– minouCommented Nov 20, 2019 at 13:20
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1 Answer
You could use a monthly reimbursement check (or electronic bank transfer) from one company to another and split it as negative expenses (rebate) per category. For example,
Company A:
Deposit Withdrawal Account Memo
$100 Internet For A and B
$500 Rent For A and B
$100 Gas/Electric For A and B
$350 -- Split -- Reimbursement from Company B
Internet $50
Rent $250
Gas/Electric $50
Company B:
Deposit Withdrawal Account Memo
$350 -- Split -- Reimbursement Payment to Company A
Internet $50
Rent $250
Gas/Electric $50
Note you don't actually have to do this monthly. You could true it up quarterly or even annually if you wish.