Some companies expand their revenue streams by renting out equipment to others. As some business owners may have found out, tracking of rentals and properly accounting for the money they generate is a tedious task. The goal is to show you two ways to track rentals using QuickBooks and QuickBooks Point of Sale.
QuickBooks Only Method
QuickBooks does not have a specific area or tool that allows you to track rentals; however, do not let this stop you.
- Identify all the equipment you will rent out.
- Enter the equipment as non-inventory items in QuickBooks
- Setup the individual equipment names as Other Names
- Use timesheets to track the rental/reservations
- Mark the time entries as billable and then create an invoice for billable expenses.
QuickBooks Point of Sale Method
Using QuickBooks POS to track rentals is a lot easier than using QuickBooks. QuickBooks Point of Sale is able to use deposits and set up specific items and fees that can be adjusted on the fly instead of QuickBooks.
- Identify the equipment you will rent out.
- Create an inventory item for the equipment.
- Set the cost to zero, the price to zero, and the quantity to the number of units you have to rent out.
- Create a non-inventory item named Deposit on Equipment make the price zero
- Repeat the process above but name the item Rental Fee.
- When a customer rents the item, create a receipt with the inventory item on the first line of the sales receipt.
- On the same receipt, Deposit on Equipment item will be the next item you add. The inventory item (the rental) will be 0 dollars, while the Deposit on Equipment will have the amount you are charging for the deposit.
- Record the receipt, take the payment using standard payment methods.
- Track the equipment using either a spreadsheet or another process.
- When the item is returned, locate the receipt and reverse it. This will create a refund for the customer. If the deposit was done using a credit card, the card will be automatically refunded. This process places the rented item back into inventory.
- Create a new receipt using the non-inventory item Rental Fee and enter the amount for the rental charge.
It may be wise to track rental equipment as a fixed asset in QuickBooks so you can depreciate it for tax purposes. Please speak with your accountant about this.