Investor · Orlando, FL · Member since 2013 · 47 posts · 14 votes
We just closed on our first flip and I have monstrous folder of receipts and invoices. Do you keep everything on an excel spreadsheet? Do you scan the receipts electronically so you don't have a paper folder? I cannot imagine doing 10-20 flips a year and having to keep these big folders of receipts. Any suggestions on how to stay organized with expenses going forward to make my life easier? Any specific scanners that are affordable that specialize in this stuff?
I've considered purchasing that particular scanner. Currently my receipts are recorded on a spreadsheet then put in an envelope. I guess it would depend on how organized you want to be. If you were to use the scanner then you could just send an email containing the file to your CPA during tax time. I think that would save time and money.
I email myself every time I make a purchase or pay someone (along with the paper receiots) then I have folders for each rehab. I transfer these paper records and email records to excel and keep a separate excel file for each rehab. So by the end of the rehab I just use the excel file for final numbers. Not the best way but it helps me keep track of where all the money is going.
I only do 2 or 3 rehabs at a time (at most) and I am not the best at being organized. Basically, all of my receipts go into a folder. I pay for most everything with a check and I write the property address on the check (I use the kind of checks that have carbon copies). At tax time (like right now), I go through all of the checks and put them into an excel file for each property. On the expenses where I use a credit card, I print off the year-end detailed report and put each expense in the appropriate excel file. This is the most challenging for me (the credit card), but I can usually determine which purchase went to which house. It's not a good system, but I don't have the type of personality to be doing anything much better.
If you have a "smartphone," you have a scanner. If not get one, why complicate things? I use the app Cam Scanner (get the paid version) to create a PDF file and then put it in Drop Box all day long. CS will make your document more legible and professional looking. Or you could just use your camera to take pictures of everything. I forward my documents to my assistant while I'm in the field and it cuts out the time for me to drive back to the office and hand it to them.
The latest update of Cam Scanner just added making notes (or signatures on a contract/offer) on a PDF document. I am sure there other solutions out there. This is the best that I have found. Here's a video of the app. This video is of the old version of the app (they changed all their icons.) But you'll get the basic idea:
I think there is a Quicken product where you can take a picture of your receipt and upload it into the program and keep track of the expenses there. Another free alternative is using a program called Evernote, which is like a file folder in the cloud, and upload pictures of receipts into specific folders. These folders can be shared with others like your CPA.
I haven't actually flipped a house (yet) but I do take pictures of my receipts, put them in a folder on my computer, and link my Excel cells to the respective receipts. It's easy to do if you keep up with it and when it comes time to file taxes, or if you are unlucky enough to be audited, you have an automated Excel spreadsheet that links any expense in question to its respective receipt.
We use helloreceipt.com. You snap a picture with the your phone. We tag it with the street number and street name and then in the notes put the receipt amount. Its a free service for now, but I think they will start charging eventually.
I use an Excel spreadsheet, a file folder for the hard copies of the receipts, and I also scan them with my phone to Dropbox folders. The later versions of Quickbooks also allow you to attach files (such as scans of receipts) to each entry if you want. But by far the biggest thing I have done to cut down on the mess is to have the contractors buy most of the materials. Now I have a lot less receipts to worry about. :)
Basically the automated tools help manage the expense and receipts of our employees on the track. The tool is based in cloud with featured user friendly and calendar based interface to manage the expenses in a better manner. We have been using the tool from Replicon. Some other alternatives are also available like expensify, quickbooks, etc.
Home depot @Bill Briscoe I too like the HD Pro system which itemizes home depot receipts by "job name" It really helps during tax time.
My problem is during a flip/ multiple projects and while I manage many units it's hard to keep track of things in that moment. There are dozens of receipts throughout the day and not enough time to itemize them/ book keep.
I guess creating SYSTEMS is the way to go, but you really have to dedicate time for this.
I manage multiple units/ properties and do several flips and value ad multi-families in a year.
As @Bryan L. said, often book keeping tends to happen at the end of the year. Or after projects are finished. At the end of the year I have to expense to quickbooks, or if I'm really swamped throw it all on Excel. Some credit cards and banks allow you to export your transactions directly to Excel which really helps.
Currently I'm using Evernote-to keep track of some things on the run. I also have Scansnap for large documents, but often it is hard to take the time to itemize/bookkeep in the moment.