Due To and Due From Accounting: Recording Money Moved Between Your Own LLCs

What happens when one of your LLCs pays for something belonging to another?

It happens often: the flip company's card pays the rental company's insurance. The money left one business and the cost belongs to another, so both sets of books have to record it.

On Sep 15, 2026, the Demo Flips LLC business card pays $1,140 for a yearly liability policy on Property 1, 275 Demo St, Davis. Property 1 belongs to Demo Rentals LLC. Its hazard insurance is paid from the lender's escrow, so this is a separate policy.

Same amount, same date, opposite signs. It was paid by card, so the card balance goes up where cash would otherwise go down.

This is the most common transfer, and it does not look like one. No money moved between the 2 companies' bank accounts. Every cost is checked against the property-to-entity map before it is booked, so the $1,140 lands in Demo Rentals LLC.

What is a due-to and due-from pair between your LLCs?

2 accounts, one in each company. The company that paid shows a due-from, money it is owed. The company that benefited shows a due-to, money it owes. They are 2 views of the same transfer.

Each account names the other company. Demo Flips LLC keeps "Due from Demo Rentals LLC". Demo Rentals LLC keeps "Due to Demo Flips LLC". The 2 accounts always move together, by the same amount.

The books show the balance between your LLCs exactly. How and when that balance is settled, and what it means for your taxes or for keeping the companies separate, is for your CPA and your attorney.

Money between you and one of your LLCs is not a pair like this. It is owner money, and owner contribution vs owner draw shows how we record it.

What does the entry look like on both sides?

In the paying company: cash down, due-from up. In the receiving company: the expense or asset recorded, due-to up. Same amount, same date, on both sets of books.

On Jul 8, 2026, Demo Flips LLC sends $40,000 to Demo Rentals LLC for the rehab on Property 2, 1640 Test Way, Vacaville. Here is the entry in both sets of books.

The same entry in debits and credits, dated Jul 8, 2026.

Each company's entry balances on its own: $40,000 of debits and $40,000 of credits.

Here the asset recorded in Demo Rentals LLC is cash. When Demo Rentals LLC pays the rehab invoices, those are its own entries: rehab cost on Property 2, paid from its checking. Demo Flips LLC records no rehab cost for Property 2.

Why is it not income or an expense?

Because nothing was earned and nothing left the group. Recorded as income, the receiving company looks more profitable. Recorded as an expense, the paying company looks worse. Both are wrong, and both distort the year.

Recorded as income, the $40,000 would make Demo Rentals LLC's July look $40,000 better than it was. Recorded as an expense, it would take $40,000 off Demo Flips LLC's profit. Neither company earned or spent anything. The money changed which company holds it.

Income and expenses are where profit is measured, and transfers stay out of them. Our guide to bookkeeping for real estate investors shows how the rest of the books fit around them.

Money moving between 2 accounts inside one LLC, such as checking paying the business card, stays out of profit the same way. We cover that in how to record transfers and credit card payments.

How do you check it at month end?

Put the 2 balances side by side. The due-from in one company should equal the due-to in the other, exactly. If they differ, a transfer was recorded on one side only.

1. 1On the last day of the month, take the due-from balance from the paying company's books.
2. 2Take the due-to balance for the same pair from the other company's books, on the same date.
3. 3Put the 2 balances side by side. They should be the same amount, with opposite signs.
4. 4If they differ, list the entries in each account for the month and find the one that appears on one side only.
5. 5Record the missing entry in the company that lacks it, then compare the 2 balances again.

Here is the check for the demo pair on Aug 31, 2026. In August, Demo Flips LLC paid a $600 overhead bill that served both companies. Demo Rentals LLC's share was $240, and it went through the same pair.

$40,240 in both books. Difference $0. The pair agrees.

Suppose Demo Rentals LLC's books had missed the $240 share. The check would show $40,240 against $40,000. The $240 difference points straight at the missing August entry.

In September, the $1,140 policy went through the same pair. On Sep 30, 2026, the pair stood at $41,380 in both books.

We reconcile every account at each monthly close, and each pair is part of it. Each LLC then gets its own monthly report, and our real estate bookkeeping report example shows what one LLC's report looks like. Its cash position lists the $41,380 as owed to you by Demo Rentals LLC.

What happens if nobody checks it?

The pair drifts. After a year the balances differ by a number nobody can explain, and reconstructing it means going back through every transfer between the accounts for the whole period.

Every month adds entries to the pair: transfers, overhead shares, bills paid from the wrong card. A single missed entry is easy to find in its own month, because the difference equals it. After 12 months, several missed entries add up to one figure that matches none of them.

The pair is also where the balance between your LLCs is read from. When it drifts, nobody can say what one company owes the other.

What if you have more than two entities?

One pair per relationship. 3 companies need 3 pairs, not one shared account, because a single pooled account cannot tell you which company owes which.

Add Demo Wholesale LLC to the 2 demo companies and there are 3 relationships. Each company keeps one account for each of the other 2.

3 LLCs, 3 pairs, 6 accounts. Each pair is checked on its own.

The count grows with every LLC: 4 LLCs need 6 pairs.