Looking for a book keeper what Should I look for?

11 Replies

Hi all

This maybe a little late in my real estate investing career but I am officially in need of a book keeper. I already have a good CPA but unfortunately he doesn't handle the monthly books. The book keeping has finally got to the point where I don't have time to keep track of all my expenses and income from the 11 properties I own. What are some things you look for in a book keeper? Do you have your booker do taxes at the end of the year? Do you give your book keeper access to your online banking? How would you go about sending monthly statements and other documentation to you book keeper?  Can you automate this?

@Dustin Salmon In researching bookkeepers, you'll definitely want to know their business operation, as in, how do they work with clients. Some come to you, some work entirely remotely, some do a hybrid. I have known bookkeepers that will go to a client's office and use paper statements/documents to enter everything and will do that on a weekly or monthly basis. Others may be remote only and therefore require online access to everything.

You'll also want to ask if they have a software preference, and what that is. Quickbooks is highly popular, but there are plenty of folks who love Xero, Freshbooks, etc. 

As for automation, most bookkeeping software will link to your bank accounts to download transactions automatically. They typically have open APIs that allow you to add apps that streamline uploading bills (accounts payable) and invoices (accounts receivable). There are plenty of file sharing sites you can use for sharing everything else (Box, Dropbox, Google Drive, etc). 

I recommend basing your choice on their operations and if the software choice makes sense before factoring in price. To get a sense of pricing, you can check Craigslist for bookkeeping postings just to see what some going rates are. You often get what you pay for, but that doesn't automatically mean that a pricey bookkeeper is your best bet. I would guess that you'd be fine (in terms of quality) if you go with someone in the mid-upper range of what you see advertised.

As an example, I work with my bookkeeping clients 100% remotely (even though most are local) since I have a full-time day job. I have online access to everything I need, and we rely on email/text/phone calls and file-sharing software to stay on top of everything. I don't do payroll, I don't cut checks, and I only work in Quickbooks Online. I'm just one example of one type of service model that exists.

You basically need to figure out what you need specifically (data entry? just monthly recs? do they need to run payroll? do they cut the checks?), and then go from there.

I hope this helps!

@Dustin Salmon - As with taxes, bookkeeping in real estate is best left to someone who focuses on real estate clients. It also depends on your activities. You say you currently own 11 properties. Are you also flipping any units? Self managing the properties? Improving the units?

These activities will all have various tax implications, and need to be recorded properly throughout the year (and a generalist CPA may miss something). 

As far as your questions @Jana Cain   is correct. The process of getting the monthly statements is pretty seamless, and usually doesn't require giving someone access to your accounts (instead, they will have access to the info through the accounting system).

I'd recommend starting your search here on BP. You'll know you are getting someone with a solid real estate background.

Finally, I would prioritize "fit" over location. These days, location doesn't matter much for a CPA. Like Jana, many on here including myself work with clients remotely. So just make sure you feel you have a good fit with whoever you decide to work with.

Best of luck!

I agree with to two people whom have already responded to you.  Bookkeeper offsite do not matter if they are in the same state. Some companies do just part of the books for you and some do everything. You do not have to give the bookkeeper access to your company's bank account but they will need to see the bank statements to do a complete month end and year end.  

I agree with what @Alan Rohrer said.  The most important thing is to hire someone with extensive real estate experience, and particularly with precisely the kind of deals you are doing.

I actually have experience with this, as when I first started my company I outsourced bookkeeping to a company in India to save costs.  What a mistake.  They had no idea what I was talking about with the transactions and kept allocating costs and expenses the wrong way.  Finally, I brought the bookkeeping back to our real estate accountants.  It's more expensive, but I never have to worry about it being done correctly, there is never any aggravation, and it saves on tax preparation because they know the books intimately and don't have to reconstruct anything.

Definitely find someone who is very knowledgeable in real estate. The bookkeeper will connect with your CPA for year-end tax. Bookkeepers will not do the actual taxes.

Working remotely is the norm now. If you feel uncomfortable with allowing access to bank accounts, you can just send the bank statements at the beginning of each month.

I personally do not like the pulling of transactions since this can get allocated incorrectly and this tends to make the person lazy in reviewing the expense codes.

All good recommendations thank you all for your responses. Are there any specific certifications to look for? Are most book keeper bonded or insured incase of fraud, identity theft etc?  

Currently I use an Excel sheet that I created entering in all of my data is the most time consuming part I guess I am worried that uploading all of that would be just as timeconsuming if not more time consuming than my current system.

Originally posted by @Dustin Salmon :

All good recommendations thank you all for your responses. Are there any specific certifications to look for? Are most book keeper bonded or insured incase of fraud, identity theft etc?  

 No. It just depends how much data you want the bookkeeper to handle. If they are just doing the typical A/R and A/P then no.

Typically when cutting checks, you would have to sign it anyway. Bank Recs report are for you to see what has been in and out. Payment Register should be provided to you on a monthly basis.

Originally posted by @Dustin Salmon :

All good recommendations thank you all for your responses. Are there any specific certifications to look for? Are most book keeper bonded or insured incase of fraud, identity theft etc?  

 Quickbooks provides certifications that bookkeepers can choose to obtain - it's their ProAdvisor status, and there are levels to it. Other software platforms may have a credentialing system for their professional users as well. 

As far as liability protection, a bookkeeper might choose to carry some form of liability/E&O insurance, but it's not required.

@Dustin Salmon

In regards to credentials - I would look for someone who has an accounting degree.
The barrier to entry into the bookkeeping industry is low.
There is no real regulation on the industry.

I would also look for a bookkeeper with many clients in the industry you are in.
So if you are a real estate investor - ideally you should work with a bookkeeper who has many real estate investor clients.

Another thing is the bookkeeping is completely different for "buy and hold" investors and those who flip. So you should communicate this with the bookkeeper that you interview.

Originally posted by @Basit Siddiqi :

@Dustin Salmon


I would also look for a bookkeeper with many clients in the industry you are in.
So if you are a real estate investor - ideally you should work with a bookkeeper who has many real estate investor clients.

 If everyone follows this, then I feel bad for the ones who are getting started.