What is a "Book Keeper"?

Question

I currently have a 1 LTR condo in Orange County, CA with the goal to expand 3-4 in 2024. As I start to expand I do not want to get caught in a paperwork pile.

In terms of a Book Keeper what do they actually do to provide value?

How do they differ from an accountant?

What is a good market average for that service?

Basit Siddiqi · Answer

I think there are two types of bookkkeepers/bookkkeeping

1) One that is recording, paying, billing in real time.
I.E. If you get a bill from the utility company, he/she will input the invoice into the software and have a date planned on when to pay it.
At the start of the month, he/she will send invoices to your customers/tenants regarding payment of rent.

2) The other is the type that is recording the transactions that occured in the past.
I.E. after the end of the month, you may have 10 transactions between rental income, bank fees, repairs, taxes, mortgage payment which the bookkeeper has to classify.

Nate Meeker · Answer

@James Mays

I always recommend to all new clients that they have a separate bank account and credit card for each property if possible. If you run everything through that then at the end of the year you can export and organize a P&L on excel. You may not need a bookkeeper for a while.

Dig B is also a good user friendly software.

Bookkeepers are typically 100-500/mo and may or may not have certified training.

Accountants like myself would charge more or pass it off to a staff member, but depending on the engagement may provide other services like tax prep and planning.

Bruce Woodruff · Answer

Depending on the size your business, a bookkeeper can be invaluable. I used to have one come in 2 x wk when my Construction Company was larger (10 employees).

They did payroll, billing, accounts receivable and a lot more. I was in the field from 6am - 6pm so I did not have the time for it....And although my math skills are good, my accounting skills.....not so much. I figure you should have people do what they do best, I pound nails, bookkeepers do books.

It doesn't cost much to do it right, I'd say don't be cheap and hire a good bookkeeper. They also will get everything ready for your CPA, the State Auditors, IRS, and tax people in terms all those kinda people understand.

It would be silly, like an investor trying to remodel a house or buy all the materials for a project...... 😂

Jake Baker · Answer

@James Mays

For 1 LTR digb or Stessa is all that you probably need for basic record keeping.

If you still find this to be frustrating, you could probably find a bookkeeper for $100-200 per month to manage this for you and also invoice your tenants.

Scott Mac · Answer

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Scott Mac · Answer

Now that you know what a bookkeeper does, enters receipts and income into your accounting program, to make quarterly and/or end of year balance sheets and income statements [for your taxes- possibly).

There are three people who can enter this information into the accounting program. A bookkeeper, or an accountant, or you.

As has been said above the accountant charges the most . A bookkeeper will charge less , and in my business judgment it seems like a bookkeeper supervised by an accountant who will handle the taxes Would be a positive.

If you intend to do it yourself and think you can master Quickbooks, And journal entries, and closing the books, and et cetera, and Find yourself in over your head, A bookkeeper will probably be a necessity.

Many work remotely and you can send the receipts to them electronically, and yes as said above there are some who will come to your office and work there.

Cost--call around and gets some bids From those who specialize in real estate accounting, Or get a good recommendation from your real estate tax pro.

Remember the old movie with Scrooge in it. Bob Cratchit who wanted another lump of coal to heat the office was Scrooge's bookkeeper.

Good Luck!

David M. · Answer

@James Mays

Mainly a bookkeeper is data entry.  somehow the various transactions have to be entered into a ledger AND categorized.

One usually then turns to an accountant to "appropriately crunch the numbers," usually for tax returns.  They can certainly give advice about tax strategies as well as business strategies.

You may not want to get caught in a paperwork pile, but but for long term rentals, there is, or should be, very little paperwork, very little transactions to document.  Monthly rent receipts and monthly mortgage payments.

Dan M. · Answer

If your doing LTR its really not that serious. I have 21 LTRs and do all my book keeping myself. Why pay someone to make mistakes unless your afraid your going to make some yourself?

To me its very straight forward, keep account of the rents coming in and a folder for expenses going out. Then in the beginning of the year give that information to your accountant. All a book keeper is going to do is data enter this stuff into quickbooks or whatever. Unless your doing full on major rehabs or STR where there is alot of transactions for only owning a few properties its not worth hiring someone in my opinion.

Gita Faust · Answer

We all talk about bookkeepers and accountants, then there are accounting advisors who offer pre-accounting and accounting services. And then there are tax planners, tax advisors, and tax preparers. A tax preparer can be an EA or a CPA (with an active license). Oh yes, we have Accounts Receivable, Accounts Payroll, Payroll, Controller, CFO, and the list goes on.

What you should look for is an accounting team.

Select a software that has a double-entry system.

Find a bookkeeper who offers you an accounting solution. They should be able to tell you what is right and wrong and ask questions before they record an entry.

What is a "Book Keeper"?

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