Due from is money one of your companies is owed by another of your companies. Due to is the mirror, money it owes. Due to and due from accounts in QuickBooks exist because one company paid a bill, made payroll or moved cash for another, and the books have to remember it. Each pair should net to zero across the two files, so if Company A shows $38,200 due from Company B, Company B must show $38,200 due to Company A. When the balance only grows in one direction, one company is quietly funding the other, and that is the number to watch.
What due to and due from accounts are in QuickBooks
Due from is an asset account in the company that is owed. Glencoyne's September 2025 setup guide for QuickBooks has you create it as an other current asset, named for the counterparty, so "Due from Install LLC" sits in the service company's file.
Due to is the liability account in the company that owes, created as an other current liability and named the same way, so "Due to Service LLC" sits in the install company's file. Glencoyne's guide calls the two "mirror images", which is the whole idea. One debt, recorded from both ends, one pair per counterparty. Three companies means up to three pairs.
The CFI glossary defines a due to account the same way for large companies. The difference for an owner with three LLCs is that nobody is paid to keep the pairs in step, so the two ends drift apart until tax time.
The three ways a balance shows up
The first is one company paying another's bill. The QuickBooks Community thread on intercompany transactions from March 2020, still drawing replies in late 2021, opened with an owner who had "hundreds of transactions" where Company B's bank account had paid Company A's expenses. A vendor had the wrong entity on file, or the card in the truck belonged to the other company. The untangling of that is in one company paying another company's bills.
The second is the cash sweep before payroll. The install company's receivables are late, payroll is Friday, and $25,000 moves from the service company's account on Thursday. Everyone means to move it back.
The third is a charge that is invoiced and never settled. The service company bills the install company $5,000 a month for the office, the dispatcher and the owner's time, and the invoice sits open because paying yourself feels optional. It is not optional to the books. Intercompany transactions explained covers rent and management fees in more detail.
The entries, in both files
Ridge Service LLC does repairs and maintenance and has the steady cash. Ridge Install LLC does replacements and new construction and waits on general contractors. Both belong to one owner. Over the year three things happen: Service pays the $12,400 shared liability premium that was Install's, Service sweeps $25,000 to Install for payroll, and the $5,000 monthly management fee Service charges Install goes unpaid for three months.
| File | What happened | Debit | Credit |
|---|---|---|---|
| Service | Paid Install's premium | Due from Install $12,400 | Bank $12,400 |
| Install | Premium paid on its behalf | Insurance expense $12,400 | Due to Service $12,400 |
| Service | Swept cash for Install payroll | Due from Install $25,000 | Bank $25,000 |
| Install | Cash received for payroll | Bank $25,000 | Due to Service $25,000 |
| Service | Fee charged, three months | Due from Install $15,000 | Management fee income $15,000 |
| Install | Fee owed, three months | Management fee expense $15,000 | Due to Service $15,000 |
At year end Service shows $52,400 due from Install, and Install shows $52,400 due to Service. Those are the same debt seen from both ends. If they differ, one bookkeeper has an entry the other does not, and the difference is the first thing to find.
The most common wrong version is Service booking the $12,400 premium to insurance expense because that is what the invoice said. Service then shows a cost for coverage it does not have, Install shows no premium at all, and the $12,400 has become a gift nobody agreed to.
Reading the balance as an owner
The number to read is the direction over twelve months, more than the balance at any one month end. Picture Service's due from Install at each quarter: $8,000 in March, $19,500 in June, $33,100 in September, $52,400 in December. The balance never comes back toward zero. Service is lending, and Install is borrowing, and nobody signed anything.
An intercompany loan is what a due from balance becomes when it stops being settled. Money that moved and was not repaid is a loan whether or not anyone wrote it down, and the May 2015 Proformative thread on one owner with several LLCs gave advice that still holds: use due to and due from, document any balance that persists, and charge interest on it.
The reason to care is what a stranger sees. A bank looking at Install alone sees a company that cannot fund its own payroll and owes $52,400 to a related party. A bank looking at Service alone sees a $52,400 asset that may never be collected, sitting in current assets as if it were cash. Either view is wrong on its own, which is why lenders on owner-guaranteed loans run the global cash flow analysis across all of your companies and you.
Common advice for a balance that will not clear is to reclassify it as a distribution from the strong company to you and a capital contribution from you to the weak one. We would not, at least not by default. That erases the debt, makes Install look funded rather than indebted, and removes the trail your CPA and your lender will both ask for. Book the loan, then decide with the CPA whether some of it should be equity.
The monthly clean-up
Glencoyne's guide says to reconcile the due to and due from pair at least monthly, and that "the balances must be equal and opposite before you begin your consolidation." The routine goes no further than that. Print both balance sheets on the same date, put the two numbers side by side, and chase the difference to the entry that caused it.
Then settle what can be settled. A $3,100 balance from a vendor mix-up should be a bank transfer this week, not a line that lives on the balance sheet for two years. A large balance that will not be repaid soon should be converted into a written loan with a date, an amount, a rate if any and a repayment plan, which is the only form of the debt a lender or buyer will accept. Never let it hide in a clearing account or in owner's equity.
A clearing account is a temporary holding account meant to sit at zero after each cycle. Intercompany balances parked there stop being visible, and nobody settles a balance nobody sees.
Separate LLCs are separate for a reason, and money passing between them without paper weakens the separation. Ask your CPA about interest on any balance that is large or long-lived, and about how each entity's tax treatment changes the answer. We do not know your facts and neither does a forum.
What QuickBooks Online will not do
QuickBooks Online has no intercompany feature. Every entry above is two entries in two files, both typed by hand, and if the second one is missed the pair is out of step until someone notices. One user in the same Community thread put it plainly: "currently I need to duplicate the entries in Entity A and Entity B, C, D." Intuit's reply to the original poster recommended a liability account and journal entries, which is correct and does not make it less work.
The product that does it lives elsewhere. Intuit's help article on transactions between company files describes an intercompany feature in QuickBooks Desktop Enterprise, and Fit Small Business noted in March 2025 that it is on the Platinum and Diamond tiers. An owner on QuickBooks Online with three files is doing it the long way.
When the companies are added together, the pair disappears. Service's $52,400 asset and Install's $52,400 liability cancel, and the $15,000 of fee income cancels the $15,000 of fee expense; intercompany eliminations explained walks through it, and the balance-sheet side is in the consolidated balance sheet in QuickBooks Online. Elimination only works if the pair matches first, which is arithmetic, and it inherits whatever mistakes are in the files.
Navigator reads each QuickBooks Online file read-only and shows each company's due to and due from balance as it stands in QuickBooks, side by side, on the base plan at $299 a month for the first entity. "How much does the install company owe the service company" is a question you can ask in the app or in a Slack thread, and the answer cites the entries it came from. Removing the pair from the consolidated view is on the Pro plan. Details are on the pricing page.
Questions owners ask
What is a due to / due from account?
A pair of balance sheet accounts that record money one of your companies owes another. Due from sits in the company that is owed and is an asset. Due to sits in the company that owes and is a liability. The two balances should always be equal and opposite, because they describe the same debt from both ends.
Is due from an asset or a liability?
Due from is an asset, usually set up as an other current asset, because it is money your company expects to receive. Due to is the liability on the other side. If your bookkeeper has both in one file for the same counterparty, one of them is probably wrong, or the two have never been netted.
How do I record one of my companies paying another's expenses in QuickBooks Online?
In the company that paid, book the payment to due from the other company, not to the expense. In the company that benefited, book the expense with the credit going to due to the paying company. Two entries, two files, same amount. QuickBooks Online has no feature that does the second entry for you.
Should due to / due from balances be zero?
Across the two files they must net to zero every month, or someone has recorded one side and not the other. Inside one file a balance can sit open for a while, but a balance that never clears is a loan. Settle small ones by transfer and write a note for any that persists more than a couple of months.
When should an intercompany balance become a loan?
When it has stopped moving in both directions. A balance that grows every month for a year is one company funding another, whatever the account is called. Convert it to a documented loan with a date, an amount, a rate and a repayment plan, and ask your CPA about the rate, especially if the LLCs are taxed differently.
Related
The four transactions that create these balances are in intercompany transactions explained. What happens to the pair when the companies are rolled up is in intercompany eliminations explained. If one of the companies is a property LLC, the accounts it needs are in a rental property chart of accounts for QuickBooks.
If you would rather see which of your companies is carrying the other than work it out from two balance sheets, the trial connects read-only in about fifteen minutes and needs no card: navigatorhq.ai.
You're on the list.
The next post goes to . While you wait, the free Accounting Health Check scores your own books.
Published . Last updated . Reviewed by a CFO on the Navigator team.