---
title: "Due to and due from accounts in QuickBooks | Ledgerbrook"
source: https://ledgerbrook.com/blog/due-to-due-from-accounts/
description: "Due to and due from accounts: which is the asset, the QuickBooks Online setup, entries in both files and the month-end match."
---

[Blogs](/blog/)

# Due to and due from accounts in QuickBooks

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[Omkar Moraye](/about/) · October 17, 2026

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## What are due to and due from accounts?

Due from is an asset: money another of your companies owes this one. Due to is a liability: money this company owes another. They mirror each other, so a $1,200 Due from Northside Coffee in one file must equal a $1,200 Due to Northside Properties in the other at every month end.

Due to and due from accounts track what your companies owe each other. They come up the first time one of your businesses pays a bill that belongs to another. Northside Properties LLC pays the $1,200 insurance premium for Northside Coffee LLC, because the property company had the cash that week. Nobody wrote a loan agreement, and nobody meant to. But from that moment the coffee shop owes the property company $1,200, and both sets of books should say so.

This post covers what the two accounts are, how to set them up in QuickBooks Online, the entries in both companies’ files for one month of real movement, and the month-end check that the two files agree. The examples use the same two companies as [owning multiple LLCs](/blog/multiple-llcs/).

## Due from versus due to

The two names describe one balance seen from each end. The company that is owed records a due from. The company that owes records a due to.

| | Due from | Due to |
| --- | --- | --- |
| Recorded by | The company that is owed | The company that owes |
| What it is | An asset, like a receivable | A liability, like a payable |
| Normal balance | Debit | Credit |
| Goes up when | This company pays for or advances money to the other | The other company pays for or advances money to this one |
| QuickBooks Online account type | Other Current Assets | Other Current Liabilities |
| Named for | The company that owes it | The company it is owed to |

A quick test when the terms blur: read the account name as a sentence. “Due from Northside Coffee” means money is due from the coffee shop, so the coffee shop owes it. Some glossaries print the two the other way round, so trust the sentence over the summary.

### Is due to an asset or a liability?

Due to is a liability, and due from is an asset. Both are usually current, because they are expected to be settled within the year. A balance between your companies that will not be repaid for years is really a loan, and it belongs in a loan account backed by a note.

### Is a due from account a receivable?

Yes, but a related-party receivable, not part of Accounts Receivable. Keep it out of Accounts Receivable in QuickBooks Online. That account is built for customer invoices, and a balance from your own company there mixes into your customer aging reports and your collections list.

## When to use due to and due from

Use the pair whenever one of your companies pays for, collects for or advances money to another, and the amount is expected to come back in the ordinary course of business. Common cases in a small group:

- One company pays another’s bill: insurance, a repair, a software subscription.
- One company’s card is used for the other’s purchase.
- One company collects money that belongs to the other, such as a deposit paid to the wrong account.
- Payroll for staff who work for both companies runs through one of them, and the other’s share is charged back.

Three kinds of movement do not belong here:

| Movement | Where it goes instead |
| --- | --- |
| A loan with a signed note, an interest rate and a repayment schedule | Loan accounts; the entries are in [intercompany loans between LLCs](/blog/loans-between-llcs/) |
| Rent or a fee for real work between your companies | Income in one file, expense in the other |
| Money between a company and its owner | Owner draws and contributions, or a [shareholder loan](/blog/shareholder-loan/) in a corporation |

Keeping the loan apart matters most. A loan has a schedule to check its balance against, and mixing everyday bill payments into it means neither balance can be explained on its own.

## Setting up the accounts in QuickBooks Online

Create one account per counterparty in each file, named for the other company. With two companies that is one account in each file. With four companies it can be three in each, and a name like “Due to/from intercompany” tells you nothing about which file holds the other side.

We use one account per counterparty, named for the direction it usually runs, and let it carry movement both ways. When the coffee shop pays a bill for the property company, the coffee shop’s Due to Northside Properties goes down rather than a second account going up. That keeps the month-end match to one number per pair. Some bookkeepers keep a separate due to and due from for every counterparty in every file; that works too, as long as both files follow the same rule.

### In the file of the company that is owed

Intuit’s [steps for tracking a loan you make](https://quickbooks.intuit.com/learn-support/en-us/help-article/service-items/track-customer-loans/L4hR3EYib_US_en_US) set up the right kind of account:

1. Go to **All apps**, then **Accounting**, then **Chart of accounts**.
2. Select **New**, then **Assets**.
3. From the **Save account under** and **Tax form section** dropdown, select **Loans to Others**. Older files show account type and detail type fields instead; there, pick **Other Current Assets**, then **Loans to Others**.
4. Name it `Due from Northside Coffee` and select **Save** without an opening balance.

### In the file of the company that owes

1. Open the **Chart of accounts** and select **New**.
2. Choose **Other Current Liabilities** as the account type. Intuit’s [liability account article](https://quickbooks.intuit.com/learn-support/en-us/help-article/liabilities/record-get-paid-upfront-loan-quickbooks-online/L2KxkzVCy_US_en_US) says to pick the detail type that best fits what you are tracking; we use **Other Current Liabilities** for a balance between companies and keep **Loan Payable** for a note-backed loan.
3. Name it `Due to Northside Properties` and save.

QuickBooks Online does not link one company’s file to another’s on the standard plans, so each side is entered in its own file. If an opening balance is needed because the companies already owe each other, enter it in both files with the same journal entry date.

## The entries in both files

Here is one month of movement between Northside Properties and Northside Coffee, recorded in both files.

**October 20: Properties pays Coffee’s $1,200 insurance premium.** The money leaves Properties’ bank account, and the expense belongs to Coffee.

In Northside Properties’ file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Oct 20 | Due from Northside Coffee | Other Current Assets | 1,200.00 | |
| Oct 20 | Properties Checking | Bank | | 1,200.00 |

In Northside Coffee’s file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Oct 20 | Insurance | Expense | 1,200.00 | |
| Oct 20 | Due to Northside Properties | Other Current Liabilities | | 1,200.00 |

**October 27: Coffee’s card pays a $380 plumbing repair at Properties’ building.** This time the money runs the other way, so each company’s existing account moves down.

In Northside Coffee’s file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Oct 27 | Due to Northside Properties | Other Current Liabilities | 380.00 | |
| Oct 27 | Coffee Card | Credit Card | | 380.00 |

In Northside Properties’ file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Oct 27 | Repairs and Maintenance | Expense | 380.00 | |
| Oct 27 | Due from Northside Coffee | Other Current Assets | | 380.00 |

At October 31, Coffee owes Properties $820 on each file: $1,200 less $380.

**November 10: Coffee settles the $820.** One transfer clears the balance in both files.

In Northside Coffee’s file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Nov 10 | Due to Northside Properties | Other Current Liabilities | 820.00 | |
| Nov 10 | Coffee Checking | Bank | | 820.00 |

In Northside Properties’ file:

| Date | Account | Account type | Debit | Credit |
| --- | --- | --- | --- | --- |
| Nov 10 | Properties Checking | Bank | 820.00 | |
| Nov 10 | Due from Northside Coffee | Other Current Assets | | 820.00 |

Only the insurance and the repair touch a profit and loss, each in the company that owns the cost. The due accounts never do.

### How to enter them

The side with a bank or card line is categorized in the bank feed: the $1,200 payment in Properties’ feed to `Due from Northside Coffee`, the $380 charge in Coffee’s card feed to `Due to Northside Properties`, and the November transfer in both feeds. The other side has no bank line, because no money moved in that company’s accounts, so it is a journal entry (**\+ Create**, then **Journal entry**). That is one of the few places a journal entry is the right tool; the [journal entry examples](/blog/journal-entry-examples/) cover the rest, and why most entries should come from the bank feed instead.

Record both sides on the same date, even when one of them is entered days later. The month-end match depends on it.

## The month-end tie-out

At every month end, the due from in one file must equal the due to in the other. Pull each balance from the balance sheet as of the last day of the month, or run the account’s own report from the **Chart of accounts** to see every transaction in it, as Intuit’s [report article](https://quickbooks.intuit.com/learn-support/en-us/help-article/report-management/run-reports-quickbooks-online/L7aILHhbl_US_en_US) describes.

| Month end | Properties: Due from Northside Coffee | Coffee: Due to Northside Properties | Difference |
| --- | --- | --- | --- |
| Oct 31 | 820.00 | 820.00 | 0.00 |
| Nov 30 | 0.00 | 0.00 | 0.00 |

This is a reconciliation in the same sense as a bank reconciliation: two records of the same thing, compared to the cent, with every difference explained. [How to reconcile in QuickBooks Online](/blog/how-to-reconcile-in-quickbooks-online/) covers the bank side; the due pair is checked after each company’s bank and card accounts are reconciled, so that every transaction is already in the file.

### When the two sides do not match

Suppose Coffee’s card charge on October 27 had been categorized to Repairs and Maintenance in Coffee’s file, the way an ordinary repair would be. Coffee would still show $1,200 owed, Properties would show $820, and the tie-out would look like this:

| Month end | Properties: Due from Northside Coffee | Coffee: Due to Northside Properties | Difference |
| --- | --- | --- | --- |
| Oct 31 | 820.00 | 1,200.00 | 380.00 |

The size of the difference usually points straight at the cause:

| Difference | What it usually means | Where to look |
| --- | --- | --- |
| Equal to one transaction | Recorded in one file only, or categorized to an expense or income account in one file | Search both files for that amount near the date |
| Twice one transaction | Recorded in the right account, but on the wrong side (a debit entered as a credit) | The account’s report in both files, for that amount |
| Equal to a transfer dated near month end | Recorded on different dates in the two files | The settlement date in each file; move one to match |
| A total of several items, growing each month | One company’s feed is routinely categorizing the other’s bills as its own | Every transaction from the other company’s vendors in that file |
| With three or more companies, equal to an item in another pair | Recorded against the wrong counterparty | The other due accounts in the same file |

In the example, the difference is exactly the $380 repair, and Coffee’s account report has no line for October 27. The fix is in Coffee’s file: recategorize the card charge from Repairs and Maintenance to `Due to Northside Properties`. Both files then show $820.

### Can a due to or due from balance be negative?

A negative balance is not always an error. It can mean the direction changed: the company that was owed now owes, because the other one paid more of its bills than it was paid for. With one account per counterparty, that shows as a credit balance on a due from. It is worth checking each time, because a sign error looks the same. If the reversal is real and will last past year end, your preparer may want the balance moved to a due to for the statements.

## Are due to and due from eliminated in consolidation?

Only when consolidated or combined statements are prepared. Under US GAAP, “intra-entity balances and transactions shall be eliminated” in consolidated statements (ASC 810-10-45-1), so the $820 owed in one company and the $820 owing in the other cancel out, and the group is not shown owing money to itself. Most owners of a few LLCs never prepare consolidated statements. A bank lending to the group may ask for combined figures, and a pair that does not match is the first thing to show up when it does.

Governments and nonprofits use the same terms for balances between funds inside one organization. The idea is the same, but those are interfund balances within one set of books, not balances between companies.

## Common questions about due to and due from

### What is the difference between due to and due from?

Direction. Due from is what another company owes this one, recorded as an asset. Due to is what this company owes another, recorded as a liability. One balance between two of your companies appears as a due from in one file and a due to in the other, for the same amount.

### Where does due from shareholder go on the balance sheet?

Under assets, usually current assets if it will be repaid within the year. It is money the company is owed by its owner rather than by another company, and in a corporation it is a loan to a shareholder. The entries and the IRS rules on those are in [shareholder loans](/blog/shareholder-loan/).

### What does due from bank mean?

It is a banking term for money one bank holds on deposit at another bank. It appears in bank financial statements and regulators’ manuals, and it has nothing to do with balances between your own companies.

### Do due to and due from accounts need interest?

A short-term balance from everyday bill payments usually carries none, and it is settled in weeks rather than years. When a balance is large or stays outstanding, it starts to look like a loan, and the interest rules for loans between related companies apply; they depend on how each company is taxed, and they are set out in [intercompany loans between LLCs](/blog/loans-between-llcs/). Ask your preparer before letting a due balance sit.

## When to hand this off

Two companies paying each other’s bills a few times a month is a few minutes of matching at month end. Once there are three or four companies, a shared card and a payroll split, the tie-out is only reliable when the same person can open every file and fix either side.

Ledgerbrook keeps each company in its own QuickBooks Online file, reconciles every bank and card account, and ties out each due to and due from pair before any file is called closed, by the 5th business day. Each file is priced by its own size from $99 a month, and the intercompany reconciliation is part of the $199 plan on the file that carries it. The plans are on [monthly bookkeeping](/monthly-bookkeeping/), and how a group of companies is priced is on [bookkeeping for multiple LLCs](/multi-entity-bookkeeping/).

> **When to hand this off:** if a due to and its due from have not matched for more than one month end, the difference is now spread across closed months in both files. A [free file review](/contact/?from=blog%2Fdue-to-due-from-accounts) starts with the file that pays the most of the other company’s bills, and you get a written answer within 48 hours.

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Published October 17, 2026

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