What makes a good Book keeper / CPA ?

Question

Answer

Those are going to be two opposite things. Most good Tax pros aren't amazing bookkeepers and vice versa. Bookkeepers are obsessed with details, know the software in and out, and often don't know tax. Tax pros are going to be bigger picture. They won't care if an account is off by $3- they will want to strategize, look big picture, know tax law in depth, and their biggest concern should be the your taxable income, treatments, and filings.

Answer

We just talked to the girls who did our payroll. They have an investor that they collect the rents for, take care of all his accounts payable, work invoices & run the entire 13 properties on quick books.They also issue the 3 day pay or quit but the attorney does the evictions per se. They charge the guy $35/property/month & $25/hr to run reports etc but tax return prep runs $1600-$2000/yr.

Answer

Well said!!!Education, experience and an analytic mind plays a huge role in real estate accounting. You have to look for a bookkeeping service with fractional controller/CFO not a bookkeeper to get you tax ready. Then only a tax adviser, tax strategist and a tax prepare will be able to advise you. We clean up books everyday that find someone punching numbers just because they know a software.

Answer

Over the last 30 years we have probably been through as many CPA's as we have attorneys . Our last CPA transposed a digit on the SSN & then TRIED to charge us $75 to correct & refile. Meanwhile the IRS had created yet another person under that new SSN & we spent several weeks correcting it with the IRS. That CPA came highly recommended but he's history now. Prior to that we had several recommended by our attorney's at the time & that was another disaster, an audit & 2 years of extensions because they couldn't get a handle on our REI & Corporations etc. We find most of them have a $8-$12/hr punching in numbers & they have no concept of the consequences if the data is incorrectly entered & subsequently filed. Then when we sat down with the 'CPA' to question their logic & apparent errors they argued with us, in fact one told my wife to leave her office & she still wanted to be paid for an S-Corp return fraught with obvious errors. Whatever you do find someone with verifiable REI knowledge & then scrutinize every page of your return(s). Another reason we take advanced IRS Tax courses every year as it can & has literally added up to $1000's. An audit is a very LONELY, daunting experience.

Answer

@Mehgan MooreTo answer the title of your post, I would say a good Bookkeeper/CPA is one who will do the following: Keeps you compliant with timely and accurate books and tax returnsMakes sure that no deductions are falling through the cracksProvides tax advice in your industryCommunicates in a timely fashionAll of these are critical, but I can't stress #1 enough.

Answer

Hi Mehgan, Questions to ask bookkeeper/accountant:1) Do they have a expertise in a specific accounting software (ideally the one you use)? It is important to know if they have expertise in a specific software like Quickbooks to ensure they can get the job done right. 2) What services do they offer? Most miscommunication happens here - you need to know exactly what you are paying for. Besides monthly reconciliation, do they offer accounts payables, bill pay, payroll, receipt management, financial analysis, individual project budget vs actual tracking, etc...3) Are they real estate experts? This is by far the most important question - you want to avoid accountants that are generalist. The more they are familiar with your industry, the better service they'll provide BUT the higher the cost. Remember you get what you pay for. The generalist will charge anywhere from $100-300/month; the real estate accountants will charge $500+/month depending on size/revenue. 4) Physical or online business? Meaning do they work locally or have an online business. This questions will depend on you - do you like physically working with someone or are you ok with everything online and video conferences. 5) Ask the bookkeeper/accountant, "Based on the current status of my business, what would you do to improve it?"This will help you get a sense of how knowledgeable they are, how they are going to be able to help your business and if they listened to your pain points. *My last little TIP is make sure that you are not just paying a bookkeeper to categorize and reconcile your books. The bookkeeper/accountant should be analyzing your financials - like a second pair of eyes. Diving deep into your expenses, profits and cash flow. I hope this helps!Jorge A.

Answer

I am an accountant, I will say this. I have taken and am eligible to sit for CPA test. I have not done so for two reasons. Once I get CPA license I can charge the going rate here about 150-200 an hour for my time. Yes I know do it and be greedy. The thing is that I would loose all my current clients. I do not like those who have no education to be bookkeepers. If you say your a bookkeeper than you have zero degree. I am a accountant I charge by the hour but not 150 or 200.I would say whomever you get needs to have a Bachelors degree in Accounting at least. This way you will know they know the laws and the financial side as well as the tax side. I have all my clients use a CPA at the end of the year to do their taxes as I am too busy doing my normal 9-5 job.There is always something that they will ask either me or the client and we discuss if something needs to be changed for tax purposes. Once a client informed the CPA firm but not me that he was gonna sell the business and that is the only time I had to change something that I had done. For REI it is more straight forward and that kind of thing never happens.I do continuing education all the time and to tax seminars every year to make sure I am up on the newest things.Ask a ton of questions of potential people and find out what the fees would be then after asking questions decide which way to go.

Answer

100% agree with Natalie. Tax planners are great at exactly that - big picture strategy and research. A bookkeeper will need to be timely, consistent, accurate, and understand the real estate biz. Ask either one to do the other's job, and your results diminish. You should also be able to depend on your team to give you advice beyond "just" bookkeeping and into things like financing and other advisory services. The popular thing in bookkeeping/accounting right now is flat rate billing. In fact, it's so popular that Quickbooks is hiring people to help customers with their bookkeeping. They keep changing the price and scope of their offering, but you should expect outsourced bookkeeping to start in the $300-500 per month range and go up depending on how complicated or frequent you would like financial information. Of course, Quickbooks is just hiring warm bodies with no guaranteed REI accounting experience - choosing a niche small business is your best bet.

Answer

I have found that CPA's know bookkeepers in the area and will make referrals-that is how it has worked for me anyway. In California I was paying 50 dollars an hour-she provided everything needed for the job. Two of the ones referred to me were outstanding and delivered on time. The third one was amazingly bad. Never give anyone anything that you do not have backed up!

Answer

@Mehgan MooreGood luck in your search with finding a bookkeeper.Here are the questions I would ask:1. What is your familiarity level with the accounting software I’ll be using? 2. Please describe your experiences with the software and some of the advanced capabilities 3. Do you have a bookkeeping business or will this be your sole job? If a business, ask how they will prioritize you if you need something done immediately. 4. Please detail a time when you communicated something effectively to another party and saved significant time while not sacrificing quality (it’s important because the bookkeeper may have to communicate with your accountant if you have one so communication is key)Tough to know the going rates. Could be $15-$50 would be my guess but I’m not 100% sure. I’m in Chicago. Another thing to consider is you could hire a bookkeeping person elsewhere if need be. Doesn’t have to be in Phoenix assuming your systems are paperless! Hope this helps and good luck.