Table Of Contents
Successful investors focus on the highest and best use of their time by delegating or outsourcing day-to-day tasks, like bookkeeping, to a partner who will not only help maintain, but also improve their operations.
We help to begin a true partnership in less than 30 days that will allow us to improve and maintain your accounting system and lead us to be a reliable resource for all of your real estate accounting needs in the future. We do this through three different stages: Accounting Set Up, Full-Cycle Bookkeeping, and Accounting Advisory.
Accounting Set Up
In an Accounting Set Up, we’re going to either set up a QuickBooks Online (QBO) file from scratch or review a current QBO file, clean and edit it, and make sure it lines up with our best practices. The primary goal of any editing or revamping is to make sure the chart of accounts lines up with IRS Schedule E to maximize tax savings and minimize year-end stress.
We will also make sure the system is set up to track income and expenses by property with class tracking, capture property basis for currently-held property using HUD's, and ensure that the most efficient receipt management is in place.
This setup is likely going to reduce the number of different platforms you’re using, especially if you're using a spreadsheet and an online receipt management system.
The pricing of an Accounting Set Up is based on activity levels. We take into account the number of bank accounts, the average number of transactions per month, the number of properties held, and the previous accounting system. Looking at the previous accounting system lets us get a feel for the difficulty of translating the information to our preferred structure on QBO.
Expectations During Accounting Set Up
You can expect to be in close contact with your Point of Contact (POC) during this time. Your POC will be gathering all related and relevant information to your accounting and financial position. Examples include: HUDs, mortgage statements, bank account information, and receipts. Your POC will expect you to be available and responsive during this time and to upload or send this information in a timely manner.
The end goal is to have an accounting system in place that provides clear and easily accessible information. Bookkeeping becomes much more simple with this system in place. We can do the bookkeeping, the investor can do the bookkeeping, or the investor can hire a bookkeeper for The Real Estate CPA to train.
Which of those options suits you best?
Alternatives vs RECPA bookkeeping
- Do you want to manage the bookkeeping and the team or not?
- Are you okay with troubleshooting, training, and review of the books?
- Do you have a good grasp on real estate specific bookkeeping?
- Do you have a very specific vision on how you want to handle bookkeeping and reporting?
If you answered "No" to some of those questions, RECPA bookkeeping may be a good fit for you.
Full-Cycle Bookkeeping involves the following:
- Maintain an accurate record of transactions
- Update and maintain the general ledger
- Reflect the purchase or sale of property through journal entries
- Bank account reconciliation to assert the accuracy of transactions
- Prepare reports and financial statements
Expectations During Bookkeeping
Your POC will need you to be timely and responsive in uploading relevant monthly documents. Investors also need to utilize the receipt management system that was implemented during Accounting Set Up. Also, the investor should keep the POC updated with any changes in operations, such as a vacancy, an upcoming rehab, or a planned sale or purchase. Your POC will ask clarifying questions and deliver monthly financial reports.
Pricing: Similar to the Accounting Set Up, we calculate the price of bookkeeping engagement based on activity. This involves the number of bank accounts, the average number of transactions per month, and the number of properties held. Additionally, we speak with you about your historical and projected purchase rate and your number of lenders.
If you're engaged for full-cycle bookkeeping services, we will provide our Accounting Advisory services. If you're not engaged for full-cycle bookkeeping, Accounting Advisory is still an option. When bookkeeping is done, an Accounting Advisor will review the reports, ask questions, provide commentary, and highlight important areas.
Who does Accounting Advisory make sense for?
- You have a bookkeeper or want to do the books yourself
- You want guidance on accounting and finances. Examples include: transfers between accounts, equity confusion, distributions and contributions, best accounting practices to optimize for clarity and taxes
Expectations During Accounting Advisory
Accounting Advisors are generally available to answer email questions once a week. Depending on the engagement and needs of the investor, bi-weekly Zoom calls to discuss the books and operations can be included. Once a month, the Accounting Advisor will review the books and ask questions and give suggestions.
Pricing: Fully customizable, this is an engagement based on your needs. We will ask questions to help identify what you really want and need for reporting and commentary. These needs could be anything from training a bookkeeper, custom reports, reviewing reports, or regular calls.
You wouldn’t go months without talking to your business partner and we believe you shouldn't go months without talking to your accountant either. In order for us to be the best addition to your team, our first focus is building a strong foundation based on communication.
As a virtual firm, we are very much technology-centered. Working with the best technology on the market is necessary for our success. The importance we place on technology is one of the characteristics that defines The Real Estate CPA as a forward-thinking firm and allows us to stay ahead of the curve and provide the smoothest client experience possible. We want to set the pace for the accounting industry - traditional accounting firms will be left in the past with inefficient processes and sluggish timelines for implementing new services and platforms.
As a client with The Real Estate CPA, your operations will be subject to the latest and greatest solutions we have available - because it benefits us to employ these resources as well.