If you have multiple properties quickly write which property it’s for on the receipt before you take a picture. Take a picture of all receipts – If I go to the store and have a paper receipt, I will snap a picture.Here is my method for making sure I’m never collecting paper receipts and invoices: The best system is whichever one you will actually use. And what worked for me was incorporating the tools I was already using on a daily basis – email and Google Drive. But I could never seem to consistently stick to the system. There are a million apps and tools out there to help you digitize receipts and keep your documents in order. Link your accounts online – If you use something like Mint or Personal Capital to manage your personal budget and finances, then you can also pull in your business accountsįorget the old days of sitting down at the kitchen table with a box of receipts and manually entering them into Excel (or – the horror! – a paper notebook).It is a no brainer to set up autopay with your lender to pay the mortgage every month. Set up mortgage autopay – I would be lost if my bills didn’t pay themselves every month.There are a lot of services out there, but I’ve been using for several years now and highly recommend their service. It then goes directly into my bank account, and I don’t have to chase anyone down. Online rent collection – I pretty much require all of my tenants to pay online through an automatic ACH bank draft.Here are a few easy ways to automate your accounting tasks: Rental property bookkeeping doesn’t have to be a labor intensive task if you set things up right from the beginning. In the digital age we live in, there is no excuse for not taking advantage of all the efficiencies to be gained by automating as much as you possibly can. This is the absolute easiest set up you could have, as you will have a running total of all your income and expenses at the end of the year just by looking at your bank statement! 3. Set up your rent deposits to go to that account, put your mortgage payment on autopay from that account, and run any expenses such as property management, repairs, etc. Then set up all of your income and expenses for a given rental house to run through that specific account. While this is not a requirement, if you have 1-4 properties or so, you can make things really easy on yourself by setting up a separate bank account for each property you own. Consider Having Separate Accounts for Each Property Once with my personal credit card, and once with my business card. So if I go to Home Depot for both personal items and rental property items, I check out twice. I personally have a separate credit card and checking account that I only use for our real estate expenses. For example, was that trip to Home Depot for plants for your personal home, or a new sink faucet for your rental property? Or a mixture of both? In addition to being an IRS audit nightmare, it just makes it extremely difficult to go back and reconcile what was spent on personal vs. Do not mix your business and personal finances! If you haven’t heard this a million times before, let me say it again. Separate Your Business and Personal Finances There are a few things that every real estate investor (or any business owner) needs to get right to set their rental property bookkeeping system up for success.
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