My partner and I are in the process of looking at software to help our bookkeeping and accounting of our business.
We have an accountant and have been using the old and faithful excel to do our books over the past couple of years but was hoping for some suggestions of a relatively easy system that other investors are using.
Also, any apps to track mileage from a smartphone would also be appreciated.
Thanks in advance!
We use Simply Accounting in our (non-real estate) business, which we chose on the recommendation of a friend who is a Chartered Management Accountant. I've used it for the past 8 years. And our CA here in Calgary who takes care of our fiscal year end loves it that we use this program because it's the industry standard, and he and all of his assistants are very, very familiar with it.
BUT, if I had a chance to do it all over again, I'd choose Quick Books. Simply Accounting had a really steep learning curve. Everyone I talk to says QB is a breeze to learn and very intuitive. Not so with Simply Accounting. I still regularly spend time on their 1 800 line trying to figure out what has gone haywire, or to get help because I can't figure out how to do something. That being said, my bookkeeping background includes one course of Accounting 101 at a university level, and then years of experience actually keeping a set of books. I think if the person using Simply Accounting had more of an accounting background than I do, the learning curve would have felt far less onerous.
You should also know that once you choose a system, that's it. You are pretty well committed to it forever. They'll tell you you can port information over if you ever feel like switching, but when you really dig deep (as I did this fall when it came to renew with Simply), you end up losing years of data, and there are a lot of hazards switching systems. I don't recommend it, mainly because of the disruption to your business, and because if you need to dig into previous years of data (and I often do) it would mean operating more than one accounting program to get the reports needed. And that's just going to be a giant pain.
And lastly, consider the payment structure. Both companies (most annoyingly) just moved to a monthly subscription service. Because we are such a small business, I find this structure to be quite a rip-off. I want to own my software outright, and wait until the last possible moment to upgrade to next version - I want my cost per year to be as low as possible. I recommend calling both companies to find out what they can offer as a subscription service, or the option to buy the software outright. You should also know that what they initially offer you is a good deal more than what can be negotiated. I'm a long time customer, and I wanted to buy the software upgrade this past fall. It retails for over $800, but for me, oh valued and long-standing customer, now only $629. I balked, this was way to much. In the end, after days of negotiation, I paid just over $400, and am now good for at least 2 years. Anyway, I guess the moral of this story is: do your research. Once you choose your accounting software, you are pretty much married to it for the life of your business. Good luck!
Few suggestions for mileage tracking apps I've tried and liked - TripLog, Driversnote, Magical Miles, Autoed, MileWiz, MileME, MileIQ, Everlance. Sticked with Magical Miles because of simplicity and fit for my workflow.
Regarding accounting - for simple rental income/expense tracking I use Landlordy, then sending exported sheet (csv file with all photographed receipts) to my accountant to do the rest.
I use Quickbooks and got an ebook from landlord accounting.com that taught me how to make it specific to property management... Example: customers are properties and jobs are tenants.
Mike IQ is what I use for mileage but still use pad and pen in my truck.
Hello @Jay Shaw
For accounting it sounds like everyone above are on the same page as suggesting Quickbooks. That is a really great tool. If you are looking for cloud based software for rental property management you should look into Buildium.com, Appfolio.com, or Yardi.com. These are very helpful because they tie in all the accounting aspects along with leases, background checks, maintenance requests, and much more.
Quicken Rental Property Manager
@Jay Shaw If you already have an accountant working with you, QuickBooks may be an easier transition for him/her. I find that if you are handling more than 15-20 properties QuickBooks does not have a good system to track repairs. If you don't already have a repair tracking system, a low cost software that can handle repairs tracking, accounting, and tenant/owner portals is Buildium. @ $40 / month it does everything that Propertyware, Appfolio, or Yardi do @ $200 / month including free advertising on Zillow. Trulia, etc.
@Marcia Jeanes is correct about changing software as they all say you can export and import to others. It never seems to work out like they say it should.
I wish you well in your transition Jay!
I only take care of 4 properties at this point, however have used Buildium since 2010. HIGHLY recommend it. I also foresee them adding quickbooks integration which I think a lot of folks have asked for in the very near future. Just an educated guess on my part.
Background checks, free website, online applications, easy to advertise vacancies, accounting etc....If you use all of the features Buildium has to offer it will save you time and make you more efficient. Just takes some time and a serious commitment on the front end to get set up - however once you do, makes your life easier.
I have been using truerent.com for a few months now and I am very happy with them. They are free for under 10 units.
Our clients have tried it all - here are their response:
Here is what Tom said: I am building a profitable business and you helping us zapping our profits. We have done it all but here is what I am going to say:
- No free software
- No Quicken
- QuickBooks Pro, Premier, Accountant or Enterprise for accounting and management; or
- 3rd party property management software for management and QuickBooks for accounting
Quickbooks sucks for rentals and many of the other options out there are either too expensive or lack key accounting features. If only there were something better on the horizon..... :-)
@Jay Shaw Xero is a great option that connects to so many other back office applications. Especially ones that are designed for property management. Feel free to get in touch with me if you want.
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I'd strongly suggest Quickbooks for many of the reasons listed above but make sure you buy a version that allows you to organize entries by "class". I'd also recommend it for the following reasons:
1. 90% of accountants are familiar with Quickbooks making tax preparation far easier and fewer mistakes.
2. If you ever want to sell your business all investors will be able to understand Quickbooks.
3. If you're ever audited by the IRS or need "audited" financials to raise money or sell equity/debt auditors will all know Quickbooks making the process far easier.
4. It syncs up with most online bank accounts making data entry more streamlined and monthly reconciliation more efficient.
5. If you want/need GAAP numbers you won't have a problem.
Do any of them have a Smart Phone App that lets you enter in the field and email receipt automatically with integration to your Desk Top or Cloud?
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