No matter the type of business you are doing right now you need to record your all financial transactions from the beginning of the business to make sure your business is moving forward and is on the track.
Whenever you will be thinking about this lots of accounting software must have popped up in your mind and juggled around, and the most prominent name among them is QuickBooks. Today in this blog we will discuss the pros of QuickBooks for real estate or rental property business.
Although tracking income in any business is necessary but in the rental and real estate business, this needs a specific way to be done like you might want to track the income and profits over buildings but you do not want to send invoices every month. But you also want to calculate the running cost of this business and turnover it.
QuickBooks is one of the major accounting software providing you with lots of powerful features and tools to manage your bookkeeping and fulfill accounting needs like keeping a check on the accounts, daily invoices, billing, and financial reports making.
You can use some useful features of QuickBooks to make your business more manageable.
Grouping your tenants in QuickBooks will help you classify your work according to your buildings and regions. You can use classes to further divide your customers according to segments.
Similar to grouping the tenants by buildings you can group the expenses according to buildings, all you need is to use specific expenses accounts and classes within the QuickBooks
For example, you did some maintenance and you got the bill from the service provider and it was the work done on other buildings, so when you will enter that payment in QuickBooks you will be able to split into all the groups whose work have done accurately.
In addition to grouping the tenants or expenses you could further manage your cash flow on QuickBooks to meet the requirements of your rental business you can design your monthly workflow.
Collection of rent
One of the most hectic parts of the rental property business is to collect the monthly rents which could be organized and done digitally.
- QuickBooks memorized transaction features will help you in this process, it will automatically create invoices for all tenants which will be paid when you will receive the amount.
- This way you will be able to track your expenses automatically, and invoices will be sent on their own and will be paid. You can automate their reports too.
There are a lot of varying expenses that need to be recorded for proof cause when you ask for the payments you can be asked what is it really about you need to keep track and proof of the transactions.
Products and services
You just need to set service items for each property and will also add one service item for security deposits.
Chart of accounts
This works like magic when you are not owning the property you’re just disbursing the funds on behalf of the property owner. When you’re collecting the rents it means they don’t belong to you either.
We call this trust accounting, it means everything is happening on the balance sheet, rents come in, and records in liability when you pay for things on their behalf it reduces the liability.
It applies very simply for each property you everything goes through one account and properties have either their bank account. For each property, a service item will be created and will be in a liability account. And only one security deposit item will be sufficient.
You only need to set up the following things:
- Chart of accounts
- Products and services
- Customers and classes
You just only need to set up things to set up your products and services.
While setting up your customers you have to add the information of your customer and also you can attach the lease agreement along so it can stay close.
Automatically invoices will be emailed to your tenant and you will be informed when they will be paid.
You can generate the progress reports of each property at the end of the year. On automation, it can also be emailed directly to the owner.
Whether you are an owner or your property manager you can take your business forward.
If you don’t have time you can hire Virtual Bookkeeping services for this and can get your works done according to your requirements and it is very affordable and peaceful.
You’ll only focus on your business growth and your books and invoices will be done and reports will be emailed to you.