Best accounting software for note business

13 Replies

Hello,

Just curious as to what everyone is using for their note buying/selling/originating business?  I'm currently using Quickbooks 2007 for my rentals, and have been thinking of updating to the newer version to go along with my new laptop.  However, I see nothing but bad reviews for the latest QB version, and the other brands out there are seem either to be not any better or ridiculously expensive.

Any thoughts or recommendations?

Thanks for the replies.  So far it sounds like I might just keep my old 2007 Quickbooks desktop, or maybe find a 2012-2015 copy on Amazon for cheaper.  From the reviews the 2018-2019 desktops are garbage; at $60/mo in perpetuity the online version is way too much money. 

How are you guys entering your notes in Quickbooks?

My accountant set me up with Quickbooks Online. Works well. I get charged a small monthly subscription fee but he administers and supports the tool should I have any issues or questions. Easily accessible from any PC. Convenient. 

FreshBooks is advertised by BP. Don't know if it's any better or more user friendly. 

The big difference between online and desktop is that you can have unlimited companies on desktop. There are some other issues, but for me that is the big one. As far as where to get it, just go to Quickbooks website and buy it. I usually upgrade every other year. 

Each note is a fixed asset and if I am going to keep it short term, ie 5 years or less, all the expenses go into a holding account, which is another fixed asset. At the end when I sell it, the fixed asset and holding account are zeroed out. This is very important in regards to advances. If I have to pay the property tax in November, is it a deduction? Sure, until the borrower pays it back in April. If I deducted it in the previous year, then the repayment is income and I'll have to pay taxes on it. So do not expense that stuff. Toss it into a holding account. That includes Servicing costs, loss mitigation, insurance, etc..

If a note becomes a REO, I zero out the note accounts and create a REO accounts. If that REO becomes a rental, I zero out the REO accounts and create rental accounts. Why? Different expense rules along the way. And a rental has different asset accounts, ie accumulated depreciation, land, building, improvements, etc..

Each note or rental is a Class. That was I can have one set of books per company with many notes and I can run the report by Class to see how each asset is doing as well as the company as a whole. 

If you don't know how to keep books, get a bookkeeper. The biggest thing to know is that all of your expenses have to fall into one of the categories on the Schedule C. I took the Schedule C and built my expense accounts around that. Now when my CPA gets my books, everything is already categorized for him.

"I took the Schedule C and built my expense accounts around that. Now when my CPA gets my books, everything is already categorized for him."  @Adam Adams that's a great reminder and strategy on efficiency!  

@Patrick Britton I vote for QB desktop. We use the 2016 version and it will do just fine for a while. We went from desktop to online and back to desktop. I did not like the online version at all.

We do things a little bit differently than @Adam Adams but I think there are probably several different ways you can do it properly. We've followed the advice of our CPA and I'm sure they do and advise differently as well. 

We acquire NPN's with the intent to liquidate. NPN's are "Other Assets" and all income and expenses related to the asset are accounted for here, so they show up on the balance sheet and not on the P&L. General expenses such as LLC fees, taxes and licenses for the business, office rent, accounting, and anything related to the business itself is an expense and shows up on the P&L. Everything directly related to the individual notes is on the balance sheet. We feel that it's cleaner and provides a better financial picture for us.

@Adam Adams Yes, it's basically the same. I'm just splitting hairs here. When we liquidate, we zero out the note asset only while you are zeroing out the note asset and your holding account asset.