Using Quickbooks Online for Your Assisted Living Facility

I started doing the accounting for an assisted living facility owned by my parents back in 1988. Times have certainly changed.

qbo

Over the years, I’ve only used two accounting programs: Peachtree and Quickbooks. I started using Peachtree in the day of floppy disks.  It was difficult to use, time consuming, and prone to error or lost data. And all of that trouble was after I hired a consultant to help me do the books. It shouldn’t have been that difficult.

The problem wasn’t necessarily the software. It was probably me.

At that time, I was a college grad with an accounting degree working toward a CPA license. I was working in the world of government accounting with enormous, complicated and expensive accounting systems. As I set up the accounting system for our assisted living business, I allowed it to become too complicated. To make matters worse, it didn’t provide quick access to the type of information we needed to manage the business.

Enter Quickbooks.

I had become a fan of Quicken to manage my personal finances. I had even considered trying to manage the business finances with those early versions of Quicken. But when Quickbooks was launched, I jumped on it.

Quickbooks simplified the process of keeping the books. It lowered the chances that I would create more problems than solutions. It saved me time, and it provided quick answers to questions we needed to manage the business.

Today, I’m still a fan of Quickbooks and use Quickbooks Online Edition to manage Senior Care Realty and several other businesses that I co-own. There are three main reasons why I like the online version of Quickbooks:

1. It’s in the Cloud. There are many reasons why I like having cloud-based software these days but the most important may be that I like to work from whereever I am. I’m not tied to a desktop computer or server in my office.
2. It’s always backed up. I realize that Intuit and other cloud-based software companies may have a problem or their service may go off-line. But I trust them a lot more than I trust myself. (However, I do make periodic copies of critical information so that I could, if absolutely necessary, move to a different system.)
3. Collaboration is a breeze. In this day of remote workers and distributed workforces, or just for any of us with multiple locations, it’s convenient to enable users to log in and share both data and workload. Plus, my accounting firm can check in as needed or get started on our tax return without me printing a single report.

I receive questions from clients about how to do their books and my immediate answer is to engage a competent financial advisor and use Quickbooks Online. In a future post, I’ll dive deeper into how to use QBO for helping manage your assisted living facility.

If you have any questions that you would like me to answer on that topic, please leave them in the comments.

Comments

  1. Do you mind iff I quote a couple of your posts aas long as I provide credit aand sources back to your website?
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  2. Jennifer says

    Hello Mike,

    What luck to have come across your blog; concise and chock-full of solid advise!
    I assist in financials for a young 60-bed, partner-owned facility in MI. We outsource payroll and tax prep/filing. I use online banking (local bank) extensively, write some manual checks and run some expenses through credit card/AMEX. Revenue is basically an excel ws. We consolidate info on QB and close monthly.
    1) Should I move payments over to QB and print checks on site? Online billpay enables access-on-the-go but requires re-entering data into QB. Additionally, I keep thinking I’m missing something by not printing checks on QB…
    2) QB online seems to be the smart option for the mobile manager; do you find the online version robust enough for assisted living and independent living (maybe not for manufacturing..)? Can info be simply backed up on a flash drive? Is transition from laptop/desktop to online, pretty seamless, and vice versa? And finally, do you vote for Windows or Mac OS for QB, whether online or laptop version…
    3) Have you posted another QB & assisted living essay somewhere? I certainly wouldn’t want ot miss that. Do you consult for non-WI clients?

    Thanks very much in advance for your time.
    Sincerely,
    Jenn

    • Jenn –
      Thanks for your comments. Here’s a quick reply with answers/opinions. 1) I use online bill pay and record payments as if we had written manual checks – I’m also a big fan of online bill pay. 2) QB Online seems to have sufficient capability for most assisted and independent living facilities. I wish it did a few more things but it does most. I have plans (someday) to create an add-on that would provide more functionality specifically for our industry. Transitioning is easy. Backing up is in the cloud by QBO, but you can download a copy of the file periodically for safety – in case something happened to the company. 3) I haven’t posted anything else on this subject but talk to people about it all the time – across the US. I don’t do consulting on this topic but it comes up often as part of my real estate advisory services. Stay tuned for more information on this site or over at http://www.seniorcarerealty.com. And keep asking specific questions – I’ll try to answer them here. Mike

      • Jennifer says

        Mike,
        Excellent, thanks. 2) Would any of those functionalities have an impact on management reporting (my main objective for using QB) and how do you compensate if so? on another note, have you found QB, be it laptop or online, to work better on Windows versus Mac platforms? Appreciate kind offer, will post specific inquiries if need arises. Cheers, jenn

        • Management report can be a bit more cumbersome than with an industry specific or more advanced program. But it’s hard to beat the price and simplicity of Quickbooks. I often export reports to Excel and manipulate them a bit to get the info I need, such as rent rolls, occupancy history, key operating metrics, etc. I will try to upload some instructions and/or video of this later. For QB Online, the platform doesn’t seem to matter much when you’re using a compatible browser. For a laptop/desktop version, I don’t have much experience but have used the Mac version and have found its capabilities seem to lag behind the Windows version – that may or may not be the case at this time but it used to be so. Hope that helps. —- Mike

          • Jennifer says

            Real good point, I can extract data onto Excel, even big NY banks do that… Sounds like you set up revenue accounts in QB, by room number then yes? Would I be able to notate and change resident name on account title and ensuing invoice? So based on our exchange we will use QB online (i won’t have to admit defeat and give up my MacBook Air), can transition later if need more robust engine. THANKS. Jenn

          • Jenn – I set up revenue accounts for the various revenue types, but not by room. I also set up recurring monthly invoices for each resident that can include a field for the room number, if you choose. I often find clients have too many revenue or expense items in their chart of accounts, tracking things that are (in my opinion) better tracked via the accounts payable or accounts receivable side of QB. As for your Mac Air, I use a Macbook Pro and it does just fine. Good luck! Mike

  3. Judith Mahbier says

    Hi Mike,
    Quick question, when setting up Assisted Living Facility in QuickBooks what industry should it be?
    I really appreciate your post, lots of good information to assist me with other task.

    Thanks,
    Judith

    • There really isn’t a good pre-loaded industry to use in Quickbooks for assisted living. The best option may be real estate, if that’s an option. It’s sometimes best to start with your own chart of accounts. We have an upcoming article on a model chart of accounts to use in Quickbooks. Stay tuned and make sure you’re subscribed for updates. Mike

      • Did you ever provide a model COA? I would like to see what it consists of.

        • Alyssa – This is a very simple chart of accounts including income and expenses. I have seen dozens or hundreds of others, some that are more details and some more simple. I tend to favor a degree of simplicity in the chart of accounts because I like to focus on the big picture as much as possible. If your accounting software allows account roll-up in reporting, then I think you can make a case for some sub-accounts that may be good additions to this chart. Remember – as a manager/owner focus on the big things but don’t forget about the little things! Mike

          Chart of Accounts

          INCOME
          Resident fees – Private pay
          Resident fees – Third party
          Other resident income

          EXPENSE
          Accounting and legal
          Activities
          Advertising
          Bad debt expense
          Bank charges
          Cable TV
          Consulting
          Dues
          Employee recruitment
          Equipment rental
          Food
          Garbage removal
          Gas and electric
          Insurance – property
          Insurance – liability
          Kitchen supplies
          Lawn and snow
          License
          Meals and entertainment
          Office supplies
          Payroll expenses
          Bonuses
          Employee benefits
          Officer’s salaries
          Payroll taxes
          Staff salaries and wages – care staff
          Staff salaries and wages – kitchen
          Staff salaries and wages – maintenance
          Staff salaries and wages – housekeeping
          Worker’s compensation insurance
          Postage
          Repairs and maintenance
          Supplies
          Taxes – personal property
          Taxes – real estate
          Telephone
          Training expenses
          Transportation
          Travel
          Uniforms
          Water and sewer

          Net operating income

          Other non-operating expenses
          Rent expense
          Interest expense
          Depreciation
          Amortization
          Management fee

          Net income

  4. Leonard Kersellius says

    What i need to start my alf

  5. Theressa Johnson says

    What classes do I need to open up assisted living home

    • Theressa – Good question but it depends on where you’re located. Assisted living is regulated by each state and the requirements vary quite a bit. Feel free to reply back with your state and I’ll try to help you out. But one other point – there are required classes and then there are suggested classes. In my opinion, there is a lot to learn before opening an assisted living home and much of it isn’t what you learn when taking a required class for a license. Those classes are good and important too but they just don’t cover many of the small business issues that are unique to owners of assisted living facilities. Seek out all the training you can get online and in classes. Good luck Theressa! Mike

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