As in every aspect of your real estate business, things go better when you can work out a “process” that is effective, then turn your brain off and “rinse and repeat”!
Keeping in mind that the main thing is to “have a bookkeeping process” that works for you… here is one bookkeeping process, which is very simple and can work very well for Small Business Professionals:
- Collect receipts, paperwork, docs.
- Put all receipts and invoices from wallet, mail etc, go to an “In Basket”
- Log (daily/weekly/monthly) all in-basket receipts & paperwork into a bookkeeping system.
- Put all logged/processed receipts into a 6″ x 9″ envelope (one envelope per month).
- Once a month is finished, put that envelope into a file box for that year.
So here is the supply list (simple and inexpensive):
CURRENT IN-BASKET: 1 letter-sized “in basket” for the office; should not be too big, such as a box, etc.. .otherwise, you will be tempted to just let it pile up for a long time and then you will have a big job.
MONTHLY ENVELOPES: plain 6″ x 9″ envelopes you can buy at any stationery store; just buy a box of them, they are very cheap and you will not run out for a few years. Best to use a marker and write the “month’ and “year” on the outside. Also, if you do a special project or go on a vacation, use a separate envelope, and label it like, “House Reno 20XX” etc.. or ‘Trip to Hawaii 20XX”.
YEARLY FILE BOX: just a regular cardboard filing box that you buy at a stationery store is perfect… then just write the year on the outside. Put all processed paperwork, monthly receipt envelopes, etc into that box after it is processed and dealt with. No sense in it piling up in your desk drawers or filing cabinets…. Once it is in this box, you can easily carry it out after the year is done and it is all cleaned up. No need to dig through your cabinets and desk for paperwork.
BOOKKEEPING SOFTWARE: stay away from complicated accounting and bookkeeping software with too much fluff. Keep things simple. An excellent easy to use and inexpensive bookkeeping program designed for real estate agents can be found at www.agentledgers.com All you want is a simple way to create an income and expense statement so you can see where your money goes and do your taxes each year, that is it.
MUSIC: … if you really do not enjoy doing bookwork, so find something to help make it enjoyable. Play some background music, have your favorite beverage, etc… and remember DO NOT LET IT PILE UP.. or you will definitely not find it enjoyable.
Happy bookkeeping
