You need to be careful when it comes to your real estate investment firm accounting. The way that you do your real estate investment firm bookkeeping either hinders or allows you to analyze your business’s financial health. If you are not an experienced real estate CPAs it is recommended that before you get started you spend a great deal of time becoming familiar with the capabilities of your QuickBooks Online account. It is also beneficial for you to understand how your real estate investment firm tax planning is affected by the accuracy of your bookkeeping. Along the way, you’ll realize several real estate accounting principles and rules that should be incorporated throughout your entire process.
Recording The Purchase Of An Asset
QuickBooks Online is a comprehensive accounting software that has many features that can really streamline your real estate investment firm’s accounting processes. It’s practical and intuitive accounting software makes things like recording the purchase of an asset, including property, buildings, and deposits easier.
To record an asset purchase in QBO, you have to follow the steps below:
First, you need to add the fixed asset item into QuickBooks. You do this by going to “List> Fixed Asset Item List”.
Next, on the bottom left corner, you will see the “Item” button.
Click “New” to open the New Fixed Asset Item box. Here you can input information about this new asset. You want to be detailed in your explanation about what type of asset this is. You want to include which account the asset is connected to and all of the information about the asset in the “Purchase Information” section. In the “Asset Information” section, you can input detailed information about the new asset you acquired. Not all of this is necessary for your taxes; the only exception is the location of the asset, especially if your business is working in multiple states.
After entering the information about the asset, click the “OK” button located in the upper right corner.
You may be required to create a fixed asset account for the item. Fortunately, it is easy for you to add accounts to QuickBooks Online:
To describe the fixed item, the first thing you want to do is to select the field named “Asset Account.”
Enter the name for the account. You may say real estate purchased 4314 Elliott Ave. N. Minneapolis Minnesota, for example.
Click the “Save & Close” button.
Importance Of Accurate Real Estate Accounting
Our knowledgeable team of real estate investment firm CPAs understands the importance of not only having accurate bookkeeping records but also having an efficient process for maintaining accuracy. Having this in place allows real estate entrepreneurs like you to manage your businesses more effectively. As a business owner, you need a clear understanding of how your financial transactions are handled, especially when large amounts of money are involved. Real estate investment firm accounting allows you to understand the financial health of your operations and streamline your real estate investment firm tax planning process. We can help you keep your financial records up-to-date, allowing you to monitor key performance indicators. We can also help you identify any progress you’ve made towards benchmarks and goals. Some of these indicators would include:
Cash Flows
Net Worth Analysis
Profits and Losses Changes
Organized real estate investment firm bookkeeping minimizes frustration during tax season. Keeping detailed records can help your organization reduce the number of hours spent cleaning up your books and the time strategizing your real estate investment firm tax planning. Our team of CPAs can provide you with high-level real estate investment financial advisory services to help you get a clearer picture of your current financial situation. Part of the real estate CFO advisory services we offer is helping you understand the ins and outs of platforms like Quickbooks Online. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
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This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.