4 Bookkeeping Automation Tips for Real Estate Investors

Owning multiple properties, managing rentals, and flipping houses creates a reasonably lengthy and complex financial trail. With that comes a lot of time spent entering data, correcting data, and making sense of it once it's there. What if you could automate it all?

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Bookkeeping is a required part of business ownership, especially as a real estate investor with complicated financials. Owning multiple properties, managing rentals, and flipping houses creates a reasonably lengthy and complex financial trail. That’s why it’s extremely important to track your bookkeeping all year and to reconcile your accounts monthly rather than waiting until tax season to pick up all the pieces.

With this complex set of financials comes a lot of time spent entering data, correcting data, and making sense of the data once it’s there. If you’ve felt like bookkeeping was time consuming and tedious in the past, you wouldn’t be the first real estate investor to feel that way.

What if we told you that you could take a lot of the manual work out of your bookkeeping process each month? It’s true. Today, we’re sharing how you can use bookkeeping automations to streamline your finances and keep your data clean and organized!

When you implement these bookkeeping automations, you’ll maintain cleaner financials, which will enable you to maintain compliance, gain access to instant financials, and be able to ship financial data to potential money lenders at a moment’s notice.

How to Use Bank Rules to Categorize Transactions in QuickBooks

Do you ever go into QuickBooks at the end of the month and feel stunned by how many transactions are miscategorized? As much as the QuickBooks commercials would like you to believe that linking your bank account means hands off bookkeeping, that’s not really the case for most businesses. In order to categorize your recurring transactions correctly, you’ll need to use bank rules.

How to Set Up Bank Rules in QuickBooks

Since QuickBooks is constantly updating their interface and step-by-step instructions become quickly outdated, we’re sharing some general guidelines for setting things up. Follow these steps when determining your bank rules for best results.

  • Only apply bank rules to recurring transactions. The only way that bank rules can be effective is if you tell QuickBooks exactly how and what to categorize.
  • Make sure you categorize correctly. This includes double checking categories that QuickBooks recommends since these may not be accurate. Untangling a web of miscategorized transactions can be messy.
  • Remember to deselect auto-add so that you can maintain the typical review process for these items on your bank feed. This will ensure that your categorizations get proper review and remain accurate.

How to Automate Bill Pay in QuickBooks

Did you know that businesses have credit scores, too? It’s important to always pay your bills on time, and automating bill pay can help you do just that! You can also use this tool to schedule payments in a way that promotes good cash flow in your business.

How to Set Up Recurring Bills in QuickBooks

When using recurring bills in QuickBooks Online, here are a few things to consider to get the best results.

  • Schedule your recurring bills according to when is the best time to pay them, not the due date.
  • Make sure that your bill payments will post prior to any deadlines, especially if you’re using the option to send a check.
  • Only set bills to recurring that are a set amount each month. Including bills that are variable will only result in accidentally sending the wrong amount

How to Automate Accounts Receivable

Another key way to maintain good cash flow in your real estate investment business is to fully optimize your accounts receivable process. Depending on what types of investments you have, this will look different for all women real estate investors. Here are some strategies we recommend:

For Rentals

For rental properties, we recommend choosing a software to collect rental payments that automatically syncs with QuickBooks Online or setting up your renters on a recurring invoice through QuickBooks itself. Automate the invoice to send 3-5 days before the due date because any additional time will make it more likely that the renter will ignore the invoice. Be sure to send it before the due date but not too far in advance.

For Money Lending

Money lenders have all sorts of different structures when it comes to repayment. Some options include an automated invoice for monthly interest charges – similar to that mentioned above – or you can just automate the payment! Create a recurring sales receipt to let QuickBooks automatically process the payment from your borrower on a certain date or in custom intervals. This way, you can collect interest only until the bloom date without having to spend time each month. There are many options you can customize to meet your needs!

For All Real Estate Investors

Regardless of your real estate investment strategies, there are many different ways to automate your accounts receivable. We recommend working with your bookkeeper to develop strategies that meet your goals.

How to Schedule Reports in QuickBooks Online

Did you know that you can schedule the generation of financial reports? For basic financial reports, like your profit and loss statement, statement of cash flows, and balance sheet, you can set up QuickBooks Online to periodically generate these reports. We recommend doing so on at least a monthly basis!

The first thing you’ll need to do is to create a memorized report. This will let QuickBooks understand the exact numbers you want to pull over and over again with your automation. Then, set a schedule to email your report on a day when you know that transactions will already be categorized and accounts reconciled. Let’s say, for example, you schedule two hours to review finances each week. You can actually set up QuickBooks to send you those reports via email ahead of that time so that everything is ready to review!

Combined, these automations have the power to save you hours per month and help you regain more time to focus on your business!

Need a bookkeeper who can help establish these systems for you? Book a free discovery call today!

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