How do you track your expenses? Looking for best practices

[Andrew Freed]

I'm just curious what others do to track their rental / business expenses, like their SOP. I'm tying to develop a best practice.

For instance, this is what I do:

• 1. Create a google business email / drive and create folders per property and business.
• 2. Create separate folders per month within each property / business.
• 3. When I have a receipt, I will take a picture and email it to my business address
• 4. Save it in the folder under the following naming convention: Vendor_Purpose_Cost_Date
• 5. Input the charge into my property accounting software (Stessa) along with the receipt.
• 6. Hire a bookkeeper to quality check / organize materials for CPA

*** Pro tip - You can download google drive to your desktop and have it as a computer drive (e.g. like your C drive) for easy uploads. 

What do you do to track your costs? 

[Chelsea Monk]

Use a business account for all business transactions, exclusively. Use a receipt manager that connects to your bookkeeping software to attach receipts to expenses. Use a real bookkeeping software (not a spreadsheet, I beg of you) to track all of the expenses. Stessa is acceptable when you have a small portfolio, upgrade to Xero when you have more properties. An investor specific software that includes bookkeeping alongside tools to manage rentals is also fine. Have your pro check your bookkeeping file for questions and errors at least quarterly, making sure to schedule a little more thorough review in December to prepare for tax season.