Mint.com mixed with google drive for invoices/receipts makes tax time pretty simple. 

I'm thinking you can invoice the seller (your friend) and have it paid through escrow, since you actually did the work.

We provide detailed monthly reports...all the Client needs to do is keep the monthly reports with the paid invoices, and bundle them with the December year end financial that shows totals for the year, everything is ready for your tax preparer.

I also use stessa.com to save all documents, invoices, receipts, etc.

I had an invoice for the hvac, an estimate for the dryer and I just showed told them which bath fans I owned. 

We bill the mortgage company for the annual premium on that house and then use that toward your monthly invoice total.

From different investors in the past I have heard that they involve a real estate attorney to be the go between (release the draws) and receive subcontractor invoices/confirmation of payments.

I currently use Tenant Cloud, just signed up with them and I'm having a few issues with their system sending out emails to the tenants about the invoices being due.  

I'd ask to look at past invoices from contractors of work done (i.e. plumbing, landscaping, electricity, etc). 

I always recommend keeping a great paper trail (before/after pics, invoices, receipts, etc) when it comes to rehabs - some lenders will be more lenient on the seasoning requirements and whether they use purchase price/appraised value if you can evidence the value add.