Accounting Set Up Basics

17 Replies

We already have one SFR and are about to close on the second one. Confession - I haven't set up my accounting yet. I have all my receipts and documents. I plan on using a bookkeeper and Quick-books. Any BASIC suggestions I can provide her. I don't believe she's done any bookkeeping for Rental Property. OR is there a tutorial available that some may suggest?

Second, do we need to keep the second home a separate entity in Quickbooks?

No need to set up a separate entity. How much is the going bookkeeping rate if you don't mind me asking?

I've heard accounts talk about Xero as an accounting solution both on BP podcast and others. From my small amount of research, it appears to be a good value and comparable to what quickbooks would provide. Might be worth looking into.

@Brien OConnor I agree with @Thomas Graham No need for multiple entities in QB. Just make sure you have a version that allows for class-tracking and assign each property to its own class.

 "I don't believe she's done any bookkeeping for Rental Property"

I am going in for heart surgery tomorrow. I don't believe the surgeon has ever done any heart surgery. 

Are each of us making the best decision regarding the professionals we have chosen to do a job for us ??

I just used excel for the first 10 properties or so, works fine. That was a few years back but still applies. If in an LLC you do need software though.

@Ronan M. - I was wrong.  It turns out she HAS done several people who own rental property.  So that was good news.  

@Thomas Graham she charges $25/hour.  

@Brien OConnor IMHO, if you have time, learn to do your own book keeping. Keep track of everything and ask your accountant what will make his/her job easier when comes time to hand over dosuments and receipts. Everything can be handled through Quickbooks. Bookkeeping can be a big task if you have lots of stuff to track, but it would save you money to do it yourself and it also forces you to be serious about your business.

I spoke to a potential accountant and he asked me if I will also need bookkeeping services. I told him that I will be doing it myself. He then told me that it's not a bad idea and that due to the fact that I am using QB-online, as long as the accountant that I select has QB-online, I can grant them access and they can follow up and fix things when comes tax time.

Once I start acquiring over 10 units, then I might consider a book keeper, but for now I want to cut costs and be over looking all numbers.

Thanks @Chris Walters .  I may take your advice.  I'm in the insurance business, and for many years I did my own accounting with Quickbooks.  

Quickbooks online is better to sync with your bank accounts so evern easier to reconcile. Just need to assign the accounts at the end of each month. 

@Fulton Sanchez Can you please provide some advice regarding the following situations:

1-my monthly QB payments are processed on my personal credit card which is only used for my business expenses (as i await for my bank to eventually grant me a business credit card). What is the best way to go about entering each expense in QB? Should i enter my credit card bill and attach the statement in QB or should I enter each different merchant/service providers individually (ex: QB, telephone, web hosting,etc?

2- How to attach picture of my bills into QB-online?

Thanks

@Chris Walters how are you? First connect your CC to QBO. Personal transactions classify them as distributions if LLC. Company expenses as such. When you enter the expense or the bill, you can attach the pdf or jpg bill but you need to create a vendor first to do this.

@Brien OConnor You asked if "do we need to keep the second home a separate entity in Quickbooks?" Is the home purchased on a different EIN or SSN? If so, you will need two sets of books.

Are you guys using a property management software to track lease dates and work orders? If not what are you using? 

I've always seen Accounting v. Tenants v. Maintenance as separate issues.  Guess I adopted this from my software development experiences over the years.  I disdain software suites as they tend to get too general when attempting to all things for all people.  Therefore I use silo / standalone products that do one thing well and have no dependencies on other products.  This means I can maintain/update or upgrade as I please with out impacting other things I need.

*IF* I were a Property Manager, then the  focus needs to shift to Tenants and Property(physical asset) management and less on accounting per se and creating PnL's

Thanks @Jeff B.  I'm accounting illiterate.  I'll leave it to the pros.

Originally posted by @Brien OConnor :

Thanks @Jeff B.  I'm accounting illiterate.  I'll leave it to the pros.

 Try adult night school Basic Accounting - - at least you'll have some insight.

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