What is the best accounting software for flipping business? Are there options for a software in your computer, not in the cloud? Or may be a flipper does not need an accounting software, then what is the best way to prepare for taxes?
I would start by asking your accountant what their preference is. If you don’t have an accountant, find one who understands the industry.
I use Quickbooks desktop edition. My accountant likes it as I can send him a copy of my file and get his direct input where needed.
It also lets me track each asset individually and track WIP for each property so I can get accurate profit and loss statements as I go.
I use spreadsheets to setup my initial budget developed during the purchase process and compare to actual cost to see how well I did and where I missed something and learn for next time.
If you’re like me, and like to buy some items in bulk when you find a good deal, you can track your inventory as well and assign items to each project as you go.
Quickbooks is the most popular business accounting software. Quickbooks has an Online version or a Desktop version that can be installed on your computer.
Do you need an accounting software to flip houses?
If you are only flipping a handful of houses a year, you can probably get by with a spreadsheet, but here are some important items you need to track/consider for tax season & business management:
- Tracking Project Expenses & Revenues to calculate your project Net Profit
- Tracking Assets/Liabilities
- Profit & Loss Statements showing Profitability of each project
- Tracking how much you paid each vendor/contractor for filing Annual 1099s
- Actual vs Budget Tracking so you can see what repairs were over/under budget
- Bank reconciliation to make sure your accounting books match your bank statements
- Provides a history of the business, so you can track financial progress or pull past financials in case of an Audit
Also, choose a system that will allow you to track your projects effectively; if you are using QBO, class tracking (Plus version) seems to work the best. Xero has the functionality to track different properties as well. If spreadsheets, perhaps different tabs or another method.
Thank you for your great input.