Paperless Book Keeping for Your Real Estate Business
We’re a full month into the New Year and tax time is fast approaching. I’m not a big fan of paying taxes (who is, right?) but I do enjoy good schools, roads and the safety that my tax dollars provide. So with that said, I’ve been preparing to do my taxes.
Here’s the good news…this year is a lot easier than years past!
Why? At the beginning of 2013 I decided to go paperless.
My first inclination was to complicate my already cumbersome process. I imagined industrial scanners, detailed ledgers and a daily reconciliation of the income and expenses. It could have been a real nightmare. Luckily I ran across an article on BiggerPockets.com that shed a light of clarity and simplicity on my situation.
With an email address, a smart phone and 1 hour per week, my book keeping has streamlined itself into amazing efficiency. Here’s how it works:
- Step 1: Set up a dedicated email address for all of your business expenditures. Make the email something easy to remember, like firstname.lastname@example.org. Only use this email address to house your receipts for business related expenses throughout the year.
- Step 2: Every time you have a business related expense, write the property address or job name associated with the expense at the top of the receipt. Take a picture of the receipt with your smart phone, and then email the image to your new dedicated email address.
- Step 3: For 1 hour per week, check your email. You can use a simple database program like Microsoft Excel or a Google Spreadsheet to log your entries. Be sure to include the date, dollar amount, job name or property address and a brief description of each expense.
These simple steps make tracking expenses a snap and provide supporting documents that are easily accessible. The best part is, you won’t find yourself shuffling through a pile of receipts trying to match them up to your credit card charges at the end of the month.
Paying taxes is part of being an American. We get to live in the greatest country in the world. Organizing and systematizing your book keeping process makes writing that check a little less painful.