I have my second flip under contract and plan on growing the business. Since things are getting more and more complex, I need to figure out a system to keep things organized and stay on top of accounting. How do you guys keep track of finances for your flips? How do you differentiate between different projects? Do you use separate bank accounts or a single one for all projects? Do you use Quickbooks to keep everything organized? Any advice would be appreciated, thanks.
Quickbooks Online Plus is a good accounting software, if setup correctly. You should activate Class Tracking feature, setup each property as a class, and assign a class for each transaction (this is the key). All expenses paid for the property from the time you purchase to the time you have it up for sale needs to go to Inventory (asset account) and once sold, you move everything to Cost of Goods Sold. You can breakdown further your inventory account into Acquisition costs, Rehab costs and so on by creating sub-accounts under it, same with COGS.
You don't need a separate bank account for each property, as long as you are assigning class and properly categorizing each transaction, you should be able to generate good reports for each property.
There are professionals here in BP who can help you out with that, feel free to reach out to them.
@Khizar Hanif congrats on the growth!
1. Def use a diff account for each flip. Get checks and a debit card. Easier to keep separate
2. I just use excel. Easy and everything I need. Just put your projections in, then add a column next to it for ACTUAL expenses. Then you can track where you are going above and where you can take budget from.
I only use a separate checking account if I set up a new entity for that purchase. Many of my development projects are done under one entity and the same bank account. I use Quickbooks and assign classes to each property. This keeps the accounting separate for each project without the need and cost of separate bank accounts/check orders/etc.
Opening separate accounts and having debit cards for each project seems a bit unnecessary. I like the idea of using the same bank account if all projects are under a single entity and using QuickBooks to do the rest of the dirty work. I’ve used QuickBooks but have only touched the surface.
Do you guys have any resources for tutorials that may be helpful?
Quick books is a great tool. Personally I have a separate bank account for each of properties and keep a minimum 6 months reserves in each.
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