Tampa FL, FL · Member since 2012 · 8 posts · 0 votes
As a new investor and someone who is meticulous with keeping things organized I'm just curious how all you experienced REI keep your expense receipts filed and organized?
Thanks,
Eric
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
13y
Our system is very similar to that used by Aaron McGinnis.
I’ll add though that I have a Neat mobile scanner that doesn't leave my sight. I keep it in my backpack with my laptop and can scan anything anytime and anywhere I get some free time. This could be in an airplane or while watching TV. The important part is to keep up.
As soon as I get a receipt, I immediately write its purpose on the front. If it involves several categories or classes, I write those too. If you wait a day to do this I promise you won’t remember what it was for. In the case of deductible meals, I’ll note the attendees and business purpose of the expense on the back and anything else that’s relevant.
Everything gets scanned, front and back (if necessary) as a PDF and put into a Dropbox folder. I don’t use the Neat software because its proprietary and I can’t see receipts offline or on my phone. For the same reason, I don’t scan receipts into Quickbooks. Plus, I fear the QB file will become huge (yes?/no?).
Each pdf is labeled with the date of the expense or bill, the name, and the amount. For example:
2013 01 06 Lowes $27.33.pdf
Annotated with the property(ies)
2012 12 25 Verizon wireless $140.57.pdf
2012 08 23 BofA Deposit $4515.98.pdf
This pdf will include a scan of this receipt and previously scanned copies of the associated checks and stubs, plus any correspondence.
Sometimes I’ll add the date it was paid to the end of the name, especially for credit card receipts. This makes it very easy to find on a CC statement:
2013 01 10 La Vecchia $92.81 2013 01 27.pdf
Using year month day format keeps everything chronological.
I’m currently experimenting by adding these file names to the memo field in Quickbooks but it’s not clear that this is necessary (your thoughts?). As long as I have a date, name, or amount, I can easily locate a receipt in no time by doing a file search. Running a QB report of the relevant transactions is all I need to quickly gather receipt images. This also means I don’t need many Dropbox folders.
Then, all paper with anything identifiable on it gets thrown into a “to be destroyed” box and shredded about once a month. If you don’t know someone who uses a shredding service, you can bring a pile of receipts to Office Depot for a few dollars a pound and they’ll do it. I find that most normal home office shredders are just not heavy duty enough long term.
The best part is my desk has never looked cleaner and I can now run reports and find receipts in seconds.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
I am the last person to give advice on this as organization with paperwork is not my specialty, however, I keep it simple on this task. I assign a 10X13 envelope and write the property address on it. I keep this in my vehicle during a rehab and all receipts go into this folder. Once the rehab is done, I have all the receipts entered into quickbooks by my CPA's assistant and then I have an electronic means to see the profitablity of each project as each one is assigned a class in quickbooks.
It has been suggested to me by others to also keep a log/talley of every expense by simply writing each item down in a log book so at any given time, I can see how much has been spent on each project. I have failed to do this, but it is something I should do. Perhaps it is just my confidence of knowing my budgets ahead of time and knowing I will hit them keeps me from doing this extra step.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
I keep them in my Daytimer or wallet until I sit down and enter them into Quick Books (or Quicken for my personal receipts). Once I have recorded them I simply put them in a file named Receipts.
Since I have several companies, I have a receipts file for each one. If I am doing a rehab, that project would have it's own receipts file. In a couple of my companies the "Receipts" file is getting pretty big so I will break it down with a separate file for each year.
Now I use traditional hanging folders with manila folders inside. I invested in a label maker which really makes a difference in the appearance of the files and easier to file and find stuff.
However you could just as easily scan all receipts and put them in digital file folders on your computer.
Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
14y
As I get receipts I use a scan app on my iPhone. After I scan them I email them to myself. I keep a "to file" folder on my desktop and send all the receipts there until I get enough to warrant some time to go ahead and put them in their respective folders which I share via Dropbox.
Real Estate Investor · League City, TX · Member since 2012 · 54 posts · 9 votes
14y
I give them to Heather and she enters them in the system. I am not allowed to file anything or pull anything from a file. I ask for it and put it in her basket when done.
Thank God for Heather.
Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes
14y
Scan in everything. Log it all in Quickbooks, then toss the paper.
(We have thousands upon thousands of transactions yearly, if I tried to keep the paper I'd have to build a wall of filing cabinets to store it all... and I am not about to do that.)
I make sure to run regular reconciliations, and catch at least a few things every time that I missed.
Do yourself a favor... learn Quickbooks early and start using it. I started with Excel, and always had mysterious issues with matching the bank to my records.
Think about it: Houses are a high-cost business to be in. Quickbooks is a measly $300... it's cheap insurance against human error.
Rental Property Investor · Charlotte NC Fort Mill SC Lake Wylie SC, SC · Member since 2009 · 174 posts · 103 votes
14y
I actually just blogged about a related topic--going paperless.
Original receipts are the only thing I keep in hardcopy, as far as accounting matters go. Otherwise, I scan everything. I keep original receipts because stores usually want the original, not a copy. I post the transactions to Quicken, and then stick them in an accordion file sorted by month.
I try to enter my receipts every day, pay bills weekly, and balance accounts monthly. Otherwise, it gets out of hand. Recording your receipts daily is vital when managing a rehab project. You start out with a budget--you must keep track of your spending; otherwise, how do you know if you're on budget?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
You'al know I'm old fashion. I put them in a file folder stapled at the sides making a pouch. Then I put them on the copier and get a photocopy of several on a page. The pages go in the expense file, the originals go in small boxes with the property written on the box. I do all the accounting from the pages. If I got audited, the poor little IRS agent gets to go through the boxes and they can sort them out for the source documents, I wouldn't let them see my photocopies! LOL
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
13y
i know this is a thread from last year, but its relevant right now (around tax season)...
Aaron, how do you organize the receipts if they have items for more than one house? Sometimes i get items for the rehab i am currently working on and the rental that's occipied. how do you split that?
I know how to split it in Quicken, but not when you scan a receipt.
Also, do you store the receipts under "Date or House address"? How do you search for it later?
i'd appreciate input from anyone else. I have a shoe box with envelopes and i do not want to start another shoe box..
Then the individual receipts are named something like -
123 Main St - Stock Building Supply 1-1-13.pdf
123 Main St - Stock Build Supply 1-2-13.pdf
123 Main St - Precision Floor and Tile 1-3-13.pdf
This method takes some extra work to process the receipts, but it keeps the records nice and neat.
Quickbooks also has the ability to scan straight from a scanner into a specific transaction, but it takes a little while longer per transaction.
One of my goals for this year is to stop running my own books, so I imagine whomever I train to do it for me I'll just have them incorporate Quickbooks' receipt scanning process into the weekly reconciliation...
As I mentioned in another thread - something that's been of great help in keeping receipts organized is starting to use Lowes and Home Depot credit accounts. When someone buys something on my account, a full receipt (Inc. SKU numbers, quantities, and most importantly a PO number or job name) is available online. This saves us a TON of time and effort over trying to wrangle dozens and dozens of receipts from those two stores.
Moving to that system has decreased the amount of paper receipts we handle by probably 80%. Our major vendors now all have online receipt tracking and it's AWESOME.
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
13y
I highly recommend scanning receipts into quickbooks for purposes of audits. That can be a lifesaver in having all of the receipts attached to the transactions.
San Francisco, CA · Member since 2012 · 20 posts · 7 votes
13y
QuickBooks seems to be popular here, and I will echo the sentiment. For beginners, though it can be tricky. Scanning the receipts is a great feature if you're technically savvy. If not, you can create a filing system by property. Take care to try and create separate receipts for each property and for the management company.
Use classes for each, too.
If you're starting by scratch, excel and a file folder is hard to beat for the first few properties. Sure it's better to start with something more fancy, but if you're organized it doesn't really matter what you do when you're getting started.
Along the topic of organization, the biggest thing is setting aside time weekly to update your books. Don't miss that for anything. Better yet, enter transactions on your phone as they happen, so you just need to do a little reconciliation and summary entries back in your office.
Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes
13y
I have to disagree with the idea of starting with a file folder and Excel.
I ran my business that way for several years, and at the end of every.single.year. I had reconciliation problems. Invariably, I would forget to record some transaction, somewhere. Invariably, come tax time I would spend HOURS backtracking through hundreds of transactions and bank statements trying to find the missing entry.
Finally, when I decided I had had enough and bought Quickbooks, my question was, "Why didn't I do this years ago?"
Think about it, folks - we deal in one of the most expensive consumer products that can be bought. We have transactions worth tens (Or hundreds) of thousands of dollars.
By comparison, Quickbooks is a PEASLY $300 and will take you, at most, a few hours to learn... or a few hundred bones to have professionally set up so you can run it with minimal effort.
I would wager that most people will save in time and frustration what they will spend in money to start off with Quickbooks from the get go, rather than trying to "Make do" with a spreadsheet (or a dozen spreadsheets.)
Finally, when your business grows, you won't have to redo your entire accounting system from spreadsheets to Quickbooks.
Note: I don't work for Quickbooks, I don't get anything from Quickbooks. I also don't care if you use Quickbooks, Peachtree, or whatever makes you happy... but I do think that if I could give a SINGLE piece of advice to any small business owner... It's DO NOT try and start your business off using Excel as your accounting solution.
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
13y
Our system is very similar to that used by Aaron McGinnis.
I’ll add though that I have a Neat mobile scanner that doesn't leave my sight. I keep it in my backpack with my laptop and can scan anything anytime and anywhere I get some free time. This could be in an airplane or while watching TV. The important part is to keep up.
As soon as I get a receipt, I immediately write its purpose on the front. If it involves several categories or classes, I write those too. If you wait a day to do this I promise you won’t remember what it was for. In the case of deductible meals, I’ll note the attendees and business purpose of the expense on the back and anything else that’s relevant.
Everything gets scanned, front and back (if necessary) as a PDF and put into a Dropbox folder. I don’t use the Neat software because its proprietary and I can’t see receipts offline or on my phone. For the same reason, I don’t scan receipts into Quickbooks. Plus, I fear the QB file will become huge (yes?/no?).
Each pdf is labeled with the date of the expense or bill, the name, and the amount. For example:
2013 01 06 Lowes $27.33.pdf
Annotated with the property(ies)
2012 12 25 Verizon wireless $140.57.pdf
2012 08 23 BofA Deposit $4515.98.pdf
This pdf will include a scan of this receipt and previously scanned copies of the associated checks and stubs, plus any correspondence.
Sometimes I’ll add the date it was paid to the end of the name, especially for credit card receipts. This makes it very easy to find on a CC statement:
2013 01 10 La Vecchia $92.81 2013 01 27.pdf
Using year month day format keeps everything chronological.
I’m currently experimenting by adding these file names to the memo field in Quickbooks but it’s not clear that this is necessary (your thoughts?). As long as I have a date, name, or amount, I can easily locate a receipt in no time by doing a file search. Running a QB report of the relevant transactions is all I need to quickly gather receipt images. This also means I don’t need many Dropbox folders.
Then, all paper with anything identifiable on it gets thrown into a “to be destroyed” box and shredded about once a month. If you don’t know someone who uses a shredding service, you can bring a pile of receipts to Office Depot for a few dollars a pound and they’ll do it. I find that most normal home office shredders are just not heavy duty enough long term.
The best part is my desk has never looked cleaner and I can now run reports and find receipts in seconds.
Contractor · Atlanta, GA · Member since 2008 · 978 posts · 985 votes
13y
Originally posted by George P.:
jeff, what do you do if the same receipt has items for multiple properties? do you make copies and put a copy in each property's folder?
the year first (2013) is a great idea.
I don't know how Jeff Does it...
I forbid anyone from doing multiple properties in one receipt. I tell them if they're standing in line, make the cashier break items out into multiple transactions.
On pain of kneecaps. Seriously. I hate it when people do that!
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
13y
I originally tried segregating my receipts into different folders but found it unwieldy and difficult to locate anything. I personally don’t like many folders any more than I like to locate anything in many file cabinets containing many files. This is just a personal preference.
Instead, I split the transaction in Quickbooks and assign a class representing a specific property to each line in the split. That is, I let QB track multiple property assignments for one receipt. There's no need to hassle at a checkout line or try to remember, in my opinion.
I know this will horrify Aaron McGinnis, and I’m now covering my kneecaps :-), but with little exception I keep all receipts in one folder per year.
As long as I can quickly find the receipt, and I always can, it doesn't also have to be assigned to a separate property folder. Having a date, name, and amount in the filename allows me three ways to do a search. You could instead do this by property address and name, in separate folders, but it just seems redundant to me.
There’s no right or wrong answer. You just have to stay organized. Whatever works for you is the correct approach.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
13y
Originally posted by Jeff S:
...
Instead, I split the transaction in Quickbooks and assign a class representing a specific property to each line in the split. That is, I let QB track multiple property assignments for one receipt. There's no need to hassle at a checkout line or try to remember, in my opinion.
...
When you can't segregate things ahead of time, then this is indeed exactly how it should be done with Quickbooks.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
13y
i do split transactions in quicken property manager. i think you are talking about the same thing. but i will start to do what aaron is doing. much cleaner in my opinion.