How do you track and collect all the expanses?

Question

Hi,

I am about to have my first TAX report this year, and the CPA is asking for all the expense.

During the rehab, I got tons of receipts and invoices.

How do you keep track? Do you have some filing system?

Thanks

Doron

Account Closed · Answer

Profit & Loss Report:  QuickBooks

QuickBooks is all about forms, headers and sub-headers.  You use them in everyday life.  You may write down a Shopping list of things to buy at the store.  You may write the name of the Store at the top of the list and then the items you plan to buy as a sub-account (Indenting) the items you plan to buy.   This is QuickBooks.

Here is an example of a Profit and Loss Report

It is a "Video" of all that you do and have done during the year.  You can view this report for any given day, or month, or year.  Type in the dates, and QuickBooks will generate this report for you based on the date you choose.

If you have a lot of properties, you can view them individually, by choosing the Profit & Loss by Class Report.  Here is an example of an apartment building.

Profit & Loss Report by Class:  QuickBooks

Everything we do in life, for the first time, looks hard.  The reason is because we have never done it before.  But once we try it, we suddenly discover how silly we were for not doing it sooner, and could kick ourselves dearly.

QuickBooks has been around for a very long time and will continue to be there.  It is reasonably priced, and your CPA's prefer to use it.

I think we get intimidated because QuickBooks is a Financial Software Program.  We automatically think, IRS, Income Taxes, I don't know this stuff, therefore, I can't do it.

But QuickBooks isn't really just for your Accountant to do your taxes with, it's really for YOU, to see where you stand financially, any time you need to know.  You need to have something that is going to be accurate to help you know whether or not you should invest more money into the business, e.g., buy that next house, or wait.

Hope I have helped those of you who may be undecided.

Nancy Neville

Trevor Ewen · Answer

@Doron Nisenbaum

Expensify is the best tool I have used. Great mobile app, web app, and tablet. I highly recommend it.

Ken P. · Answer

I put all the receipts associated with managing 26 properties into Quicken software. It costs less than $100, organizes expenses into categories, and syncs with most financial institutions to reconcile bank statements. End of the year reports are easy to generate, too.

Nick C. · Answer

We keep a P & L statement for each property in Excel and also in a customized CRM software. A good starting point for a spreadsheet could be

(Resell price - Closing costs - Rehab) - (Purchase price + Closing costs + Lender fees + Holdings costs) and that should be your spread. You can customize after each deal is complete.

We scan and upload all the receipts, HUDs, etc into the CRM.

Hope this helps!

Gita Faust · Answer

Josh C. On QuickBooks online you can track houses and group them. As to QuickBooks desktop, if you host the software, you can use your ipad to access your file in the cloud.

100% agree with your Go Digital.

Jim Adrian · Answer

I use this excel for my sfr that I built.  Very simple to use.  I am going to try quicken this year but haven't got it set up yet.    The key is to spend an hour each month around the 5th to enter your stuff.  At this time enter rent or send a late notice.

https://www.biggerpockets.com/files/user/JimA732/file/rental-expenses-report

Gita Faust · Answer

Check out Smartvault, Hubdoc and Receipts - works great with QuickBooks.

Cameron Skinner · Answer

@Doron Nisenbaum, This is an easy effective way I have found for clients who don't want to worry with a spreadsheet or accounting software. I call it solitaire. Open a separate checking account for the rehab, get an account that prints copies of the the checks on the statements.  In the memo column write specific expense categories that you ask your CPA to give you like utilities, repairs, etc. At year end cut out individual checks and then just group like catogories and add them up staple individual groups together and then write down all the totals on a single piece of paper throw it in a file and hand to your accountant and he will love you.  Remember IRS does require you to keep receipts and invoices to make sure your not buying personal stuff along with your materials from Home Depot but you can just stuff those in a spot in your wallet and throw them in a shoe box at home when your wallet gets too fat, so you can go back and dig them out if your audited. I have one client who gets all his kids envolved at year end and makes a big game of it.

Super low tech, but easy and effective,

Hope this helps,

Good luck!

Jana Cain · Answer

@Doron Nisenbaum Another vote for Expensify. I know it can sync with Quickbooks, too, if you opt to go that route.

How do you track and collect all the expanses?

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