Author: Alita Hall

Schedule C & E: Using These Forms for the Setup of Your Accounting System

Depending upon your entity type and industry for your business, setting up the books for bookkeeping can be quite simple. For the purpose of this post I am going to discuss the two setups I am most familiar with. The first is based upon the IRS Form Schedule C. Page one of the form handles the income and expenses of your business to arrive and the profit and loss. The business expense categories listed are all that is needed in your accounting systems’ Chart of Accounts. Having this form handy keeps the Chart of Accounts clean and streamlined. You can always add sub-accounts for the things you want broken down for reports to be used internally. Another form I like to use as a reference is the IRS Form Schedule E. I love this form because my specialty is rental property accounting and it helps keep my clients Chart of Accounts clean as well. Page one of this particular form deals with the income from rent or royalties and the other page deals with other kinds of passive income such as income from Partnerships or S Corps. For this purpose, only the rents concern us. When you have property that you allow

What Bookkeepers Want Small Business Owners to Know

Being a bookkeeper is not a glamorous job. There are no fancy products to really showcase the value the service brings to all business industries. Part of my job as a bookkeeper is to educate my clients on the key reasons why professional bookkeeping is so crucial to the overall success of their business. Below are 6 of these reasons. 1. Accurate and organized financial data is NECESSARY. As a business owner, it is your job to keep financial accurate and organized financial records. Those records can tell you how well the business is doing, where the money is coming from, and where it is going. Aside from the obvious, it can help you should there be an audit. Being able to clearly explain any transaction at any given time can potentially save you tens of thousands of dollars. 2. Proper categorization of the Income and Expenses. For tax purposes this is particularly important because getting it wrong can mean an audit, over or understated income and expenses, missed deductions, and overpayment or underpayment of tax liabilities. 3. Timely reporting of sales and payroll tax. As a business owner, there are several tax reporting agencies that require timely filing and

How to Avoid Communication Pitfalls in Your Property Management Company

http://secureservercdn.net/45.40.149.34/2hd.8e9.myftpupload.com/wp-content/uploads/2019/11/PM-Communication.mp4?time=1575751990 While scrolling through Facebook this afternoon, I came across an interesting question in a Property Management group I am in. It asked “What do you feel is the number one service lacking in Property Management?” My answer was communication along with several others responding in similar fashion. I want to elaborate further on my answer. I felt there was a breakdown in communication as it pertains to the responsibilities of the owner and those of the property manager. Who is doing what? What does an owner need to provide to the PM in order for the PM to do his or her job more effectively? What does he PM need to provide to the Owner to give peace of mind to the Owner that the PM is doing the job as promised? Aside from rent, what other deliverables is the PM handing the Owner? Are they timely? These are just the few of the questions a PM firm can ask Owners and vice versa. Another side of the communication coin is that of PMs to their maintenance staff. This was another issue brought up in response to the question above. Finding good maintenance staff is a wonderful addition to

QuickBooks for Property Management – Security Deposits

Security deposits are paid by the tenant to the landlord. It is meant to cover any damages done to the property by the tenant beyond normal wear and tear. As landlords, I am sure this is not news to you. What may be news to you is how to handle these payments in QuickBooks. I am going to share the method I recommend because of its ease of use. When receiving a security deposit from a tenant, I treat it as a credit to the tenant. I do this because it allows me to see, at any given time, how much their deposit is and it makes it easier to discern how much of it needs to be returned to the tenant after any charges have been accessed. To use this method, Tenant CANNOT be set up as jobs under a property address. They MUST be set up as a customer. Under these conditions, tenant security deposits are handled with the following steps: Receive the payment – There should be no invoice to apply it to. Deposit the payment – Tenant Security Deposits SHOULD have their own bank accounts. Some states require this. I think it is just good practice

QuickBooks for Property Management: Owner/Tenant Workflow

Now that we have classes, tenants, and owners all set up, it is time to talk how these three things will flow together. The workflow for property management does not have to be daunting. The goal is to make it simple, easy to follow, and repeatable. Let’s dive right in! Step 1: Assessing Rent Charges to Tenants Statement charges are a great way to assess the charge for rent. It is a register for each tenant that shows all the transactions that involve that tenant. The process for assessing a rent charge this way is very simple.  Open the tenant register and input the charge for rent. Step 2: Collecting Rent from Tenants Next, process the payment from that tenant. You can right click on the tenant name and choose receive payment. Here, it is imperative to make sure you have the right account listed that you want the payment to post to. If you do not have a main account where all tenant payments are kept, please pay attention to this. It will save a lot of headache in the long run. Step 3: Paying Owners Enter what you owe the owners as a bill minus your property management

QuickBooks for Property Management – Owners

As many of us know, there are several schools of thought on the best processes for any business when using QuickBooks. Property Management is no different. In this series you have learned about using classes and the best practices for setting up a class as well as how to set up your tenants. Like these two sections,  setting up owners also comes in several methods. The method I practice is to use the Vendor Center in QuickBooks. Why setup an owner as a vendor when they are your customer? The reason for this is simply because getting their rents to them is a liability to the property management firm just as a bill for utilities is. It also makes your workflow smoother. We will get more into workflows under this method of property management in a later post for now let’s continue discussing setting up owners. There are two ways that owners can be listed as vendors. One way is to use the “address first owner name” method that is similar to setting up a tenant. This way works well for owners with only one property. The other is  using the owner name for those with multiple properties. Using the

QuickBooks for Property Management – Tenants

To continue on from our previous post, QuickBooks is an excellent tool for property management. In this post, I am going to cover Tenants and how to treat them in QuickBooks in a way that is easy for anyone to understand. My recommendation is to set each tenant up as a customer. Inputting an abbreviated version of the street address along with the tenant’s last name will help keep identical records separate and sorts the list by address; making it easier to locate a property. Once a tenant has moved and their record has been reconciled (move out process complete and security deposit returned) that tenant simply becomes inactive, and a vacancy is entered using the same format stated above. For example: Tenant is Bob Hall. Address is 1455 Main Ave. This tenant would be setup like this: 1455Main<Hall>. A vacancy after the tenant has moved out would look like this: 1455Main<Vacant>. Using this method comes in handy when you have multiple properties by the same owner and then multiple tenants in that property. This method also makes it much easier to determine the number of vacancies an owner has at any given time as they will be listed along

QuickBooks for Property Management- Classes

Property Management is a unique sector of business and the bookkeeping for it is as well. One of the best ways to manage the books for a Property Management Firm or individual landlord is to use the Classes feature in QuickBooks. Classes is a feature that can give further detail on a business’ financial information. There are several ways that a Property Management Firm can use Classes: Owners As Classes Property As Classes Separate Business Entities as Classes The best practice in choosing which way to use Classes is to determine what type of information you want to track. For a property management firm this means tracking income and expenses for each owners’ property. Setting the owner as a class is the best way to tie the income and expenses to each property; especially if an owner has more than one property. If this is the case, each property held by the same owner can be entered as a subclass of that owner. Utilizing Classes this way makes tax preparation faster and simpler. The IRS requires all income and expenses on rental property to be separated by location on the Schedule E. Whether you use QuickBooks Online or QuickBooks Desktop,

QuickBooks for Property Management – Work Orders

Maintenance requests. YIKES! For most landlords and property managers this can be a MAJOR headache. Establishing a smooth, easy to follow process from the beginning can fulfill a request with ease! Once a maintenance request is received, the landlord  or property manager completes a Work Order. There are many steps but like all things, repetition is key to automating this process. The first step in this process is when the Tenant issues a maintenance request. Depending on how you manage your properties (self-managed or property management firm), the response to this will vary a little bit. For the post we will outline if from the property management firm view. More often than not, PM firms have a maintenance team on staff that is ready to answer these requests in a timely manner. Others do not and may have to call upon another company to help. In either situation, a well-defined process will ensure a smoother journey from start to finish. Here is the process AMH recommends: Tenant issues a request. PM sends request to Maintenance Supervisor. Supervisor contacts tenant for further info and to schedule time for Technician to inspect the issue. Technician inspects issues, taking pictures and documenting findings.

Employee Onboarding

Just like with new clients, you must onboard your new employees as well. Reading a job description and explaining the job duties to the new employee is not always efficient in acclimating the new hire. Aside from explaining the duties and assigning them a work area, there are quite a few things that can be done to ease the transition for your new team member. 1. Walk them through accessing their company email. – I know it sounds trivial but this can be so frustrating some times. Walking him or her through this step will help ease some of the nervousness from their minds. 2. Sit with them and give them a short tutorial on any software you use to run your business. – Most people are not up on the latest software or applications so learning a new program is stressful! Trying to navigate it alone!? YIKES! Giving your new hire a hands on tutorial shows them that you understand that learning a new program is difficult and that you value their presence. Yes, I know you can point them to YouTube but your sitting down with them will go a long way to instilling loyalty and a sense