I'm thinking about hiring an Account Manager to do my Bookkeeping. What should i pay for setup and monthly rate?
Bookkeeper for what? Do you have 1 sfr? 3 commercial strip malls? Sorry, but if you want advice, give some information.
10 single family homes.
@Ricky Jefferson It depends on the level of complexity and what you are really looking for in a bookkeeper/accountant. I have experienced this first hand, some people may think they need a bookkeeper and come to find out that they needed someone with higher qualifications than originally anticipated.
There is a big difference between accounting manager and account manager; account manager doesn't imply someone with an accounting background.
It's better to find someone overqualified than someone who doesn't know the difference between asset and liabilities and operating and finance activities. That person could also setup the system/process and train someone at a lower level to manage the day-to-day.
I know I didn't give you an answer on pay rates, but I have seen it time and time again; clients hiring under-qualified talent and paying the price in the long run. I'm a firm believer in doing things right the first time. My background is corporate accounting (10 years, active CPA). I would also recommend reaching out to someone you know in HR/talent acquisitions/recruiting to help you define your needs and then the pay rate could be discussed. Best of luck!
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@Ricky Jefferson feel free to PM me if you have additional questions.
Hello all, thank you kindly for the response.
@Ricky Jefferson, If you manage your properties yourself, perhaps you could spend 10% of your gross monthly receipts on a part time bookkeeper familiar with the kind of (rental property) bookkeeping you need, from an employment agency such as Accountemps, etc. Ten percent of your gross receipts ought to be enough to hire a bookkeeper from an employment agency for 1 day a week. An employment agency may be able to find you a "retired" bookkeeper willing to work 1 day a week. You may need such a bookkeeper only for a year to get a sense of your cash flow.
10% of gross receipts towards bookkeeping seems kinda steep.
Most rental businesses do not have that much activity on a week to week basis. Most have money coming in on the first and few expenses(mortgage payment, utilities, possible repairs, possibly property management fees going out).
However, pricing for the services depends on many factors
1) how complex the books are - separating a bank account for each property simplifies the bookkeepers job. More transactions in a month can also make the books slightly more complicated.
2) how often you want a report. It will cost you more money to get your books updated on a weekly basis than if you needed it once a month.
3) experience level of the bookkeeper - those that have accounting degrees or those that have more experience will cost more.
A word of caution - an inexperienced bookkeeper will cost you more than the $$ you pay him.
Do you want to understand your cash flow? Use a software. As I am experienced with QuickBooks, let me talk about it:
Enter all transactions as you receive them and not when you pay them:
- Enter all rent as invoices
- Enter all expenses as bills
- Enter loans, closing, etc.
IT is also called Accrual Basis. Now pull up the Cash Flow report right within QuickBooks.
After you receive payments and pay your bills, you will be able to view reports on Cash Basis.
Now the questions are what you should pay?
-- Setup your books: there are two kinds of setup:
----- Set up a QuickBooks file, with the industry specific chart of accounts, over 100 of reports for your industry - estimating from $300 up (one-time fee)
----- Set up your tenants, properties list - varies
When running a business, you need to account for overhead expenses, that includes bookkeeping, unless you want to learn to be a bookkeeper, controller and CFO all in one.
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