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?

All my receipts going into one big folder for over 20 properties. I write the property on the top of the receipt. Then I sit down once and put everything into my tax spreadsheet in January which sums up everything by category and property. I also go through my business credit cards and checking account to make sure I have everything. I add in any 1099s I get. I then add in my income from my rent roll spreadsheet which is updated monthly. I have a tab for every property but one summary tab that pulls in the final numbers for each property. I then have everything ready for my CPA to easily do my taxes. Easy Peasy.

@Bud Gaffney, @Dennis Gavilanes, Account Closed - I appreciate the feedback. I put the SOP is a nice easy to read format. Feel free to use it if you want. Thanks again for the input all.

@Austin Fogt. Quickbooks will do what you are asking for a cloud based accounting software. Xero will also do that, the entry level is cheaper here but doesn't have as many features as Quickbooks. I like quickbooks and prefer it. Account Closed would be happy to speak with you about Xero. There is also a third option which is Wave accounting. It is a free software and works nicely, but with anything free you it gives up a lot of features. Property management softwares are just that, property management with accounting as an add-on. It gets the job done but not as well as an accounting software. Hope that helps.

@Andrew Freed you can use QuickBooks if you prefer, but you have to have a minimum of QBO Plus in order to use class/location tracking. It's super expensive (way overpriced in my opinion). I actually prefer Xero's Growing plan because it's more reasonably priced for the same functionality and it's super quick and easy to set up for investors.

All - keep it simple! Scan EVERY receipt as a PDF - pics are okay if you are in a hurry, but they are too big and too hard to manipulate! You can print a pic to PDF pretty easily. Regarding naming your files - @Andrew Freed your "Vendor_Purpose_Cost_Date" is okay, but you'll find in time the date is the most important data point, followed by the property address, etc. We use this format: yyyy-mm-dd Main_E_123_#2 (vendor) Purpose $xx.xx (adjust address as necessary) HIGHLY recommend that date format year first, then month, then day - makes finding/sorting so much easier! Street name first, then street direction, then street number, then unit# is also an easier find/sort trick:)(our brains process words faster than numbers)

@Andrew Freed I am very happy using ReiHub for bookkeeping for the past 2 years. Much easier than Quickbook.

@Andrew Freed For the first few years of investing and operating my two small businesses I used simple google sheets, a filing cabinet, and email files to separate and enter each expense. As my portfolio and businesses have grown I was forced to invest in some real systems. I now run everything through QuickBooks Desktop Pro, the web based version would not work for me because each book has a separate subscription fee, so each property and business would cost like $30 each per month to keep a book. Desktop allows you to have unlimited separated books in one system, but it is only locally based which is a downside. Now my bank feeds and credit cards are auto pulled into my books so I can quickly categorize each income or expense in the system, its a few hours per quarter for me to keep my books, and some months I have hundreds or even thousands of receipts. I do not currently have a bookkeeper but I do have an assistant who I plan on training on bookkeeping next year to help take it off my plate. I still keep a physical copy of each receipt and file them in my file cabinets by property or business.

Account Closed, I haven't heard of Xero before; I'll check it out. If it doesn't have an existing connection to a given financial institution, how do you get transactions into the system from them?

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How do you track your expenses? Looking for best practices

Andrew FreedBusiness Member

Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes

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?

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How do you track your expenses? Looking for best practices

How do you track your expenses? Looking for best practices

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