Welcome to Part 4 of the Efficiency series. In this post we are going to talk about document preparation, retention, and filing for accounting and bookkeeping purposes.

Paperwork, YIKES! It is a necessary pain for all business owners. Applications, consent to background and credit checks, lease agreements, income verification, and so much more.  Of all the document types there are, this post will focus on those needed for rental property owners in regards to their accounting.

Let's get into it.

As a bookkeeper for rental property owners, I have developed a set of documents I require to accurately record transactional data for my clients. Depending upon your bookkeeper of the choice, the amount of work they do versus the amount of work you do, and the timeframe the work is completed in, this document set may be different.

  • Bank Statements
  • Credit Card Statements
  • New Tenant Info - Name, Unit Number, Rent Amount, Amount of Security Deposit, and payment method
  • Ex Tenant Info
  • Itemized Deposit Return Letter
  • Copy of Security Deposit Check
  • Deposits Slips - Must have unit number, amount, and payment method of each tenant
  • Copies of Checks written
  • Any other document created from the resort of a transaction concerning your business finances

These are the documents that need to be compiled and prepared as applicable to each month or other period the accounting is done in. Now that we have gotten the proper documents prepared and scanned over to the bookkeeper, we can talk about what to do with them.

Starting your filing and retention process off the right way in the beginning will ensure that the documents you need are easily accessible. It is the opinion of this bookkeeper that all documents pertaining to ex-tenants be kept for a period of 5 years beginning at the date the tenant-landlord relationship ends. Check the statute of limitations in your area for exact retention requirements as they relate to filing of lawsuits and other legal matters. That covers retention, now let's get to filing.

Filing these documents, invoices, bills, and statements from your financial facilities, in the opinion of this bookkeeper, should always be filed by month with the most current item being on top. It eliminates the need to dig through several file folders to find the proper document when you can go to the file containing the month in question and all documents of transactions occurring in that month. Talk about efficient! Tenant records should be filed according to unit number. More often than not, you, the landlord may not remember when they moved in but you will remember the unit they rented. This will help keep all records for that unit together.  *As a side note, you also keep invoices and receipts of repairs of tenant fault charges with their records as well.*

The best way to ensure you have all the financial documents you need for your accounting processes is to work with an experienced accountant or bookkeeper like those AMH Bookkeeping, LLC. We are the landlord's bookkeeping firm and we are here to help. Schedule a call with AMH and let's talk about your needs and how AMH can assist you.

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