If you watch the real estate rehab TV reality shows, you might think rehabbing is all glitz and glory. Sure, in every episode of Fixer Upper, Joanna Gaines is asking Chip to do some dirty, sweaty job, but do they ever show you all the bookkeeping involved in running a rehab business? If you don’t stay on top of the bookkeeping you will never know if you are making a profit until after the project is over and even then you may not know.
So, it’s not without some irony, that I’ve learned how to do double entry accounting using Quickbooks software in order to stay on top of Stage Property finances. I say it’s not without some irony because my husband initially began his professional career as a certified public accountant before joining Boston’s high tech community. I am the right-brained one in our relationship, but here I am doing accounting and bookkeeping in order to run my business.
My words of advice:
- Save every receipt. You will need them.
- Record your expenses in your accounting system regularly. Don’t wait till the pile is so large it is overwhelming.
- Get a business credit card with the best benefits, whether it’s frequent flier miles, cash rewards or college savings. You might as well get some benefits from all those charges.
- Reconcile each account monthly. You would be surprised how easy it is to overlook a bookkeeping mistake. Comparing your books with the bank statements helps identify and correct those errors.
- Set up reports that make it easy to review the expenses to date on each property.
And, finally, it doesn’t hurt to marry an accountant. Whenever I am struggling with some aspect of Quickbooks or how to record a specific payment, I can always bring in the cavalry. 😉