The Bookeeping World

13 Replies

     As new investors my husband and I are learning as much as we can get our hands on before taking the plunge into our first rental, hopefully beginning of next year. 

     As we build our team, business plan, and organize finances we realize the tremendous importance of keeping tract of those assets and its financial. 

     So my question to you all is the following: 

-How do you keep track of your assets? Softwares?

    (QuickBooks, Buildium, Quickens, Excel?

- What was your decision based on when you made your choice? 

 Thanks in advance, 

                         Nataly 

Hi Nataly, 

I have the exact same question and hope that some good folks out there have a suggestion or two! 

We have our first buy and hold and will also be selling a property, and we have a property management company as well as a separate LLC. We really need to find a way to streamline our finances in (hopefully) one place.

I keep wanting to go to Quickbooks, but before I make the decision, I am hoping some people out there have some insights into this. 

Thanks for posting. -- Alissa

@Alissa Collins

Hi Alissa, congrats on your first property, I've heard that once you break the ice with the first one the rest follow quickly! :)

I wanted to let you know that I posted the same question under "Landlord Forum and rental Properties", it has over 40 replies, and you might learn quite a bit from the BP members who graciously shared their experiences and advice. 

You can search " The Book keeping world" in the forum section and it should take you there. 

Otherwise feel free you let me know and I'll send you the URL. 

           Nataly 

Web app for asset/operations management, income/expenses, repairs, etc; Quickbooks Online for the more advanced accounting. Almost done with an integration between the two...

Hello Nataly, I am a Texas Certified Public Accountant and I am familiar with various software systems. For most bookkeeping beginners I would recommend using QuickBooks Online, or QuickBooks desktop version. Before you rush out to purchase the software, allow me to make the following recommendation. Educate yourself on the basics of accounting. If you understand the "guts of money" as many people say, you will have a big advantage when it comes to making financial decisions. And as with many things on the Internet, you can learn this stuff for free. I wouldn't pay anyone to teach you, unless you want to get into learning technical details. Specifically, I would learn the following: 1. Basics of navigating and using QuickBooks. I.e. Creating a chart of accounts, entering bills (expenses), making standard real estate journal entries, tracking jobs, writing checks, paying bills, bank reconciliations, etc. 2. Understanding the difference between Balance Sheet accounts (snapshot in time) and Income Statement accounts (changes over a given period of time) 3. Understanding how financial statements work or "flow". This one is less of a requirement in the beginning, but as you grow your business, these concepts will become more and more important. Best of Luck, Angel Cepeda, CPA

ONE RULE - Never, never enter journal entries in QuickBooks software unless it is for depreciation at the end of the year.

QuickBooks Online is not for Rental Properties. Even though my clients use them, they use excel and other reporting to make it work.

Free - let us say you spend time suffering the internet to learn (free stuff), would you know that it is going to work for you? My question is always been - how much is your time worth? vs paying someone to do the work or learn from them.

It is like saying go visit the IRS website, read blogs and file your own tax return. Why do you need an CPA or EA to prepare your taxes?  

It takes a life time of experience, education to learn, implement, analyze your financial reports and accounting. Hire a professional.

If you are reading this post view your Profit and Loss and Balance Sheet and see if:

- Can you file your tax return today? (Say you have to file tax return as of today)

- Can you get a loan with your reports?

- Do you know how much money you spend on each property?

- Do you take advantage of the 5, 7, ... year depreciation on your improvements?

- When you purchase the property, do you take a flat % of depreciation? 

If you said no to even one of the questions - you need to hire a professional. Remember it is not about the IRS or taxes - it is about you been PROFITABLE.

AND it all starts with QuickBooks - Learn it right - 

It is a lifetime investment. 

It is a one time investment. 

Make it a great Tuesday.

Gita Faust

I may get tar and feathered for this reply but I struggled with the same question.  I have a mix of res/retail/office space and use Excel.  One spreadsheet for deposits and one spreadsheet for each property.  Each month I reconcile my business credit card and allocate expenses.  My online bill pay is separated by property so at year end I just download and allocate.  

All I am doing is essentially bookkeeping.  At the end of the year, I turn in one spreadsheet per property to my CPA and he works his magic.  I researched the quickbooks route and found some people who wished they stayed with Excel due to QB over complicating things.  I wonder if there are others like me or if I am just being resistant to change and trying to justify it.

In order to use Excel you need to know how to use Excel.

In order to know what you need to present to your CPA for tax purposes, you need to know what you need to have.  (A vicious cycle)

Life is a process of educating ourselves and learning.  

The difference between QuickBooks and Excel, is that QuickBooks will calculate everything for you, whereas with excel you need to program it to calculate everything for you.  

It's not that your method is bad.  But QuickBooks would make your job easier, once learned.

You are comfortable with your procedures because you learned how to do it and it works for you.  But one day it may not.  You may get so much bigger that it may be  too cumbersome for you to keep track manually of  everything you are doing in your business.  QuickBooks grows with you as your grow. 

But too, we need to visualize how we look to someone we want to borrow money from.  A professionally printed out copy of our Profit and Loss Report shows your banker, or hard money lender you are professional, not that you aren't with excel, but it does show you are business savvy when you use something like QuickBooks. 

Nancy Neville

In order to use Excel you need to know how to use Excel.

In order to know what you need to present to your CPA for tax purposes, you need to know what you need to have.  (A vicious cycle)

Life is a process of educating ourselves and learning.  

The difference between QuickBooks and Excel, is that QuickBooks will calculate everything for you, whereas with excel you need to program it to calculate everything for you.  

It's not that your method is bad.  But QuickBooks would make your job easier, once learned.

You are comfortable with your procedures because you learned how to do it it works for you.  But one day it may not.  You may get so much bigger than it is too cumbersome for you to keep track manually everything you are doing in your business.  QuickBooks grows with you as your grow. 

But too, we need to visualize how we look to someone we want to borrow money from.  A professionally printed out copy of our Profit and Loss Report, shows your banker, or hard money lender you are professional, not that you aren't with excel, but it does show you are business savvy.

Nancy Neville

This post has been removed.

Having problems with my Internet.  Nothing like repeating oneself over and over again! 

Sorry!

I use Quicken Rental Property Manager.  My needs are simple and I do it all myself.  It does of course take some self-education to make things do what you want to do.  I spend less than 4 hrs a month on record keeping.

Thank you everyone for your replies! Nataly Llanes