How to keep the books for more than one LLC (without mixing them up)
Plenty of small business owners end up with more than one company. A consulting firm plus a holding company that owns it. An agency that spun a product into its own LLC. A partnership with one group of people and a side venture with another. Each one made sense when you set it up. The bookkeeping is where it gets messy.
The good news: running books for several entities isn't harder than running one, as long as you keep a few habits. Here's how. (This is general information, not legal or tax advice. Your attorney and CPA can tell you what applies to your entities.)
Rule one: every LLC gets its own books
Each LLC is its own business on paper, so it needs its own set of books: its own chart of accounts, its own bank accounts, its own customers and invoices, and its own profit and loss. Don't run two companies out of one file with a “Company B” category. It feels faster for a month and then makes year end miserable, because your CPA has to pull the two apart before they can prepare either return.
Separate books also back up the reason you formed separate LLCs in the first place. Our guide to separating personal and business money explains why keeping each entity's finances distinct matters.
Rule two: separate bank accounts for each entity
Each LLC should have its own checking account, opened under its own EIN, and ideally its own card. When money only enters and leaves an entity through that entity's accounts, its books almost build themselves. When one card pays for everything, every transaction becomes a question.
Rule three: invoice from the right company
If you bill other businesses, your clients care which entity sends the invoice. It's on their vendor records, their W-9 on file, and possibly their contract. Send each invoice from the company that did the work, with that company's name, logo and payment details. Before you send, check two things: the company name at the top, and the bank details your client will pay into.
Keep each company's customer list separate too. If both entities work with the same client, set that client up in both. That way each company's receivables and statements are accurate on their own.
When money moves between your companies
This is the part that trips people up. Sooner or later one LLC pays a bill that belongs to another, or you move cash from the company that has it to the one that needs it. That's fine. Just record it on both sides.
One company pays another's expense
Say your consulting LLC pays a $600 software bill that really belongs to your holding company. In the consulting company's books, that $600 isn't an expense. It's money the holding company owes it, often called a “due from” or intercompany receivable. In the holding company's books, the $600 is an expense, plus money it owes the consulting company (a “due to,” or intercompany payable). When the holding company pays it back, both balances go to zero.
Moving cash to cover a shortfall
If you transfer $5,000 from one LLC to another, decide what it is before you move it. It might be a loan the receiving company will repay, or a distribution to you as owner followed by a contribution into the other company. Those two are treated differently for tax purposes, so ask your CPA which fits, and write it down. A one-line note in each company's books (“Loan to Holdings LLC, to be repaid by Dec 31”) saves a lot of guesswork later.
Keep it rare
The cleanest setup is one where intercompany activity is unusual. If one company keeps paying the other's bills, it's usually simpler to give the second company its own card or account and fund it on purpose.
Shared costs: pick a split and stick with it
Some costs really do serve more than one company, like an office lease, a bookkeeping subscription, or a shared assistant. Pick a fair way to split them (by headcount, by revenue, or a flat percentage your CPA agrees with), write the method down, and use the same split every month. Consistency matters more than precision here.
A monthly routine for each entity
Do the same short routine for every company, once a month:
- Review and approve that month's bank and card transactions.
- Reconcile each bank account so the books match the bank.
- Check who owes you and send statements to clients with open balances.
- Record any intercompany activity on both sides, and confirm the “due to” in one company matches the “due from” in the other.
- Glance at each company's profit and loss on its own.
Doing it company by company keeps your attention on one set of books at a time, which is how mistakes get caught.
Bring your CPA into every entity
Your CPA will likely prepare a separate return for each LLC, or fold some into your personal return, depending on how each is taxed. Either way they need access to each company's books, plus a clear list of any money that moved between them. Give them access early in the year, not in March. Our checklist of what to hand your CPA at year end works for each entity.
If you want one combined picture of everything you own, that's a consolidated report, and it's usually something your CPA builds from each company's statements.
A quick checklist
- Separate books for every LLC, no “Company B” categories.
- Separate bank account and card for each entity, under its own EIN.
- Invoices sent from the company that did the work.
- Money between companies recorded on both sides, with a note on what it is.
- Shared costs split the same way every month.
- Each company reconciled monthly.
- Your CPA has access to every entity.
How Apsis helps
Apsis gives each company its own separate books, with its own chart of accounts, bank feeds, customers, invoices and reports, all under one login. Pick which books you're working in when you sign in, or switch from the sidebar. Your first company is $19/month with three users, and each extra company is $10/month with its own bank connection. Someone who works in several of your companies counts as one user, and every company gets a free accountant seat so your CPA can review each set of books.
To be clear about what Apsis doesn't do today: it doesn't produce consolidated reports across companies, and it doesn't create intercompany entries for you, so you record each side yourself or with your CPA. (A company set up as a holding company starts with Due from and Due to Related Companies accounts for exactly that.) It also doesn't run payroll. See how Apsis works for multi-entity owners, or try Apsis free for 30 days.