I have 8 properties (16 units), and have grown a lot in the past 18 months. For 19 years, I've "kept books" with highly organized "paper system" which (while SOOOO 1990')s was at least a logical and organized.
On January 1st, in an effort to be more "professional," and in the hopes of making tax season less time consuming I began tinkering with Quickbooks online.
I chose January first to make a clean break from the old paper system to the new digital one.
I've had a tech person from a local CPA advising me over the phone for an hour every-other-week or so. In the mean time, my receipts are everywhere and I'm falling behind in processing them.
The paper always worked fine and I have a friend who takes pics of receipts and saves them to his Google drive; two simple ideas that seem to work well...
SO MY QUESTION: Will all this time I'm putting into QB online payoff down the road? Will it SAVE time? Save money? Save sanity? Or am I overengineering my RE enterprise?
Lots of folks hire bookkeepers very early on. I interviewed a successful investor just the other day who said a bookkeeper was his first and best hire. Something to consider!
@Jean-Paul E. Gagnon I only have one property so take this with a grain of salt lol but I have been really enjoying Stessa since I started. I highly recommend it if you haven't checked it out yet.
@Jean-Paul E. Gagnon First of all, congratulation on your rapid growth! There are many youtube videos online where you can learn about QB. I think "Income Digs" and "The QuickBooks Dude" are pretty good. Regarding receipts, you just have to organize them or at least save them to your cloud. I try to have digital receipts as much as possible, so that I don't have to scan them. For example, if you buy things from Home Depot, you have an option to receive receipts by email. A lot of people talk about Stessa, but someone said it doesn't have a journal entry, and that is a deal killer to me. While I'm not an accountant, all the accountants who saw my QB are pretty happy, so if you have a specific question, I'll be happy to give you an unofficial answer.
Jean-Paul, I also recommend stessa dot com. It's free income and expense tracking software. It's designed for real estate investors and it's easier to learn and use than Quickbooks.
With 8 properties and I am assuming you are still going to keep growing, so why spend time learning something that there are literally professionals that do this for a living?
There's bookkeepers and then there are Accountants (Non-CPA and CPA). Bookkeepers are just data entry requires no degree. Accountants require a degree and can help you analyze your financials as well as setting up your books the correct way if you find someone who focuses on real estate.
I feel like people here just study things they aren't knowledgable of to save a few bucks.
Example: People searching laws on the internet instead of getting an attorney because they want to save a few dollars.
At the end, Time = Money.
If you think your time is worth spending learning accounting, then go for it.
I would stay away from QBooks. I am stuck with it as I have used it for 15 years. It now asks you for personal info and u need passwords everytime you use it. Use something else.
Do you use a dedicated bank account for your properties (i.e., an LLC bank account)?
I'm making an app that's like a light version of quickbooks, specifically for real estate investors (you can track transactions at a property level). In short, it pulls your transactions from your bank account, then you can add receipts and allocate by property. It's very simple and easy.
Would love to have you beta test it if you're interested.
Quickbooks little brother quicken is over kill for 20 units, costs less than $50, and is 10x easier to learn than quickbooks. With it I don’t even need to talk to a bookkeeper or CPA until tax time. Then I just print reports by property and hand them over.
@Jean-Paul E. Gagnon your accountants should offer a service for you, like entering bills and reconciliation.
Quickbooks is probably not the best choice though. There is very inexpensive property management software out there that will allow you to do the accounting in the software as well as other features like collecting rent, providing tenant portals, and recording maintenance requests. This is probably a better option.
To answer your fundamental question, yes it’s absolutely worth it to get integrated with a software system, it will save you a lot of time in the long run.
@Jean-Paul E. Gagnon , I would ask the why before answering the what. are you struggling with how profitable your business is, or are paying too much for tax preparation? knowing your numbers means reporting and running p&l, tracking net worth, and a balance sheet.
manual paper trail only gets worse as you scale so efficiency becomes important. whether you pay for someone to do that depends on if you know your numbers cold. you can't possibly know if someone else is doing it right if you don't master it first. only then can you delegate and focus your time on the higher income producing activity.
I do use qb desktop btw and believe what ever tool you use will be far more beneficial than manual, and your cpa will need less time and therfore charge less, further improving your bottom line.
my 2 cents.