[Top 5 tips for Real Estate Bookkeeping]
(and avoiding early grey hairs)
“But, what can I do in my business to make the bookkeeping easier?” We get this question all the time.
Heyyy there investor friends!
We are sharing our top five tips for smooth-running bookkeeping in your real estate business.
These tips will help immensely in running your business and staying away from some of those early gray hairs!
And who doesn’t love a cherry on the sundae?! We have a BONUS TIP AT THE END that might change your life!! (no peeking, the first five are REALLY important too)
Without further ado, let’s hop into it:
Tip #1: Invest in a cloud based accounting software.
The ability to access information anywhere – on any device – has more become a necessity than a luxury in the past few years. We use a cloud-based accounting software for its ability to have multiple users and accessibility. The saying is true… time is money. Don’t waste it on unnecessary roadblocks.
We recommend QuickBooks
Tip #2: Have the correct chart of accounts.
The chart of accounts for each business builds the reports that you’re going to be looking at, and it’s the backbone of all of your accounting. Without accounts specifically tailored to real estate investing, the reports mean zilch and won’t help you in making any good decision.
Tip #3: Enter all of your final settlement statements (HUDs) from the title company.
When purchasing, refinancing or selling a house, it goes through escrow. Before signing all the closing documents, an escrow officer will send an Estimated Settlement Statement that you’ll look over and make sure it’s correct. After the escrow is closed, there will be a Final Settlement Statement that will have the escrow officer’s signature on it, certifying that it is the final and correct copy.
All of these statements – whether it’s the purchase, refinance or sale – will have to go into your accounting software.
Tip #4: Keep all of your receipts (audible groaning)
Yes, we know. It’s tedious to keep all the receipts. Whether it be for an office expenses, materials for a specific rehab project, A/C repair on your rental property, all of the receipts are important to keep. To know the numbers, all expenses will be itemized per property. The good news: Most receipts can be sent via email nowadays… setup an email specifically for receipts!
Tip #5: Be consistent
We’re getting towards the end of the year… fourth quarter is upon us!! And unfortunately, a lot of people will be waiting until tax time to think about bookkeeping, but we’re here to tell you RIGHT NOW is the time to get all your ducks in a row.
Be prepared and have less stress when it comes to tax time. Start thinking about it, start getting everything in order (it’s not as painful as you think, I promise)
We hope these top five tips have brought some good insight. Implementing this approach has made the entire difference in running a smooth real estate business, being able to analyze your finances and make quick decisions versus someone that is all over the place, unorganized, and stressed out.
**BONUS TIP** (sound the buzzer!!) DELEGATE your bookkeeping.
As a real estate investor and a business owner, you probably got into this industry to make money, lots and lots of money! The whole point is to be doing deals and bringing in income – not worrying about all of the backend details.
Delegating is the most powerful thing that you can do.
We are a bookkeeping service.
We do this specifically for real estate investors.
We know how the industry works.
Reach out to us if you have questions and need help.