Quickbooks for real estate
bookkeeping for real estate
Everyone is very familiar that Intuit’s versatile system QuickBooks is a premier system for managing accounting and bookkeeping in a business. The system is optimized to provide the business owner with a simple and fast method of managing the financials of a business.
However, most people are unaware that this bookkeeping system has more uses besides managing the books for a formal business. QuickBooks can be used to manage simple financial accounts and can be used by real estate investors, owners, or managers. Managing the books of any real estate investment can be finely managed with QuickBooks. This method of organizing finances have dated back to the beginning of recordkeeping for real estate.
Click here to read more about the history.
The Basics
QuickBooks, at its basic root function, is an accounting system that may be used for any bookkeeping or accounting need. The system can easily be set up to match any type of real estate investment- commercial account, residential account, vacation rental, or even a pure investment in real estate. As with any account, the books are easy to set up, simply define the accounts and set up inputs for revenues and expenses. Of course, with real estate investing, revenues may not be booked for some time to come, as the revenue will appear when the property is finally sold. In this situation, the expense will likely occur over the course of the investment, for example, property taxes or even improvements. Thus, like any business, QuickBooks will offer the user a great deal of flexibility to set up their account as needed. For more information on the basics of QuickBooks and real estate check out this link:
How to Use QuickBooks for Real Estate: The Basics - BKPR
Setting Up QuickBooks for Real Estate
Since QuickBooks is very friendly in setting up an account, the system will offer any user multiple options in setting up titles of accounts. For example, you might want to set up an account based on the square footage of a location. You can set up the accounts based on property description, rent due date, upcoming maintenance, lease dates, or a myriad of other data points.
Just as in using QuickBooks for a business, you will be prompted to set up your Chart of Accounts. The accounts and charts can be defined by revenues, expenses, investments, or any other data that you need to use for a real estate investment. The Chart of Accounts will help to keep tenants' accounts managed properly. Thus, you will be able to quickly and accurately account for which tenant is up to date on their rent or who may be behind and by how long they are behind. The Chart of Accounts will not only keep track of your real estate but also helps you manage the property as well. Check out the following link for a video on how to use the Chart of Accounts in real estate and QuickBooks. QuickBooks
Using QuickBooks in Real Estate
As mentioned previously, due to the flexibility offered in the QuickBooks Chart of Accounts, the use of the system to manage any real estate investment or operation is easy. The accounts will allow for a quick, accurate account of all expenses while managing revenues. Just like using QuickBooks in a business, one that uses the system for managing a real estate investment, the user can quickly manage invoices for the account. Many real estate investors and since many have been working in this field for a long period, are more comfortable using spreadsheets and manually inputting data. However, this means doing everything by hand and staying on top of dates or other important accounting points. By using QuickBooks, these users will quickly find that they have more time as the system is more automated than traditional spreadsheets.
Analyzing Data
QuickBooks users understand one major benefit of automation is that it quickly and easily allows one to analyze their financial situation. Obviously, for a business, this is a necessity. However, for any real estate operation, it will be a godsend. Imagine analyzing all ROIs from multiple locations or even being able to analyze in detail all tenants of a multi-unit location based on monthly or other time data. For real estate investors, this rapid analysis can turn long tedium development work into a breezy, while allowing the investors to concentrate on the analytics, not the math behind the analysis. For real estate investments, this is probably the main reason one should use QuickBooks as the data can be developed at any time and is with the most up-to-date information. In an industry where small data changes can happen often and without much notice, but will very drastically change the ROI dynamics, this type of analysis will ensure that any investment is optimized all the time. Check out this link for more information from the creators of QuickBooks (Intuit) on using QuickBooks for real estate investment.
Tracking Your Investments with Real Estate Accounting Software | QuickBooks Canada (intuit.com)
Real Estate Accounting and QuickBooks
This blog has been focused on in general terms how QuickBooks can be a major advantage to any real estate investor. However, that is just a part of the accounting equation, developing a standard practice is key as well. To keep QuickBooks current with the most recent data, one needs to develop a habit of adding data regularly. QuickBooks is optimized to offer quick and accurate accounting, offering detailed analysis of any investment- commercial, residential, development, or holding while waiting to develop- but the information must be added regularly. This means that when using QuickBooks for real estate accounting develop a regular timetable to add information. Some investors will add data at the end of a week, while others will add data quarterly. The type of real estate investment will likely determine the frequency of adding data to a QuickBooks real estate accounting system, but the most important item is to make sure it is added regularly to get the most accurate analysis of the data.
QuickBooks for Real Estate: How to Make the Most Out of It in 2022 - Casanova Brooks
