439: Real Estate Bookkeeping: A Crash Course for Getting Your Financials in Check w/Sarah Bratcher

Real Estate Rookie

BiggerPockets

How To, Education, Business, Investing, Entrepreneurship

4.8 • 1.7K Ratings

🗓️ 31 July 2024

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

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Summary

Real estate bookkeeping is one of the tedious but necessary tasks that comes with owning a rental property. Unsurprisingly, it’s one of the things that can make or break your real estate business. Can you do your own accounting? Should you hire a bookkeeper? It’s easy to become overwhelmed by your financials, which is why we’ve brought in a specialist to deliver a crash course on this crucial topic! Welcome back to the Real Estate Rookie podcast! Today, we’re joined by certified public account (CPA) Sarah Bratcher, who is going to share five things every investor should know about bookkeeping. Along the way, you’ll learn the differences between CPAs, bookkeepers, and financial planners so that you can make the right hire for your real estate business. Sarah also shares some of the biggest red flags to watch out for when hiring a CPA, as well as some telltale signs that it’s time to let your current CPA go! But that’s not all! Commingling personal and business income is an issue that gets investors in hot water with the IRS, but fortunately, Sarah has a simple solution that will help you avoid legal pitfalls altogether. You’ll also learn how to set up software, systems, and accounts that make your life easier! In This Episode We Cover Five things every rookie investor should know about bookkeeping How to choose an accounting software that best aligns with your investing goals Red flags to look for when hiring (or firing!) a certified public accountant (CPA) Why you NEED an investor-friendly tax preparer (and how to find one!) Preventing liability issues by separating your personal and business income The differences between CPAs, bookkeepers, and financial planners (and which one to hire!) And So Much More! Links from the Show Ask Your Question on the BiggerPockets Forums Join BiggerPockets for FREE Find Investor-Friendly Tax and Financial Experts Buy “The Book on Tax Strategies for the Savvy Real Estate Investor” Find Investor-Friendly Lenders See Ashley at BPCON2024 in Cancun! Real Estate Accounting for Newbies (00:00) Intro (00:58) Advice for New Investors (07:44) Software & Business Accounts (17:15) Systems & Chart of Accounts (24:48) Hiring (and Firing!) CPAs (30:04) HUGE Bookkeeper Red Flags (33:06) Connect with Sarah! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/rookie-439 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	feeling overwhelmed about your unorganized financials. My name is Ashley Care and welcome to the
0:06.6	real estate rookie podcast where every week three times a week we bring you the inspiration, motivation,
0:12.4	and stories you need to
0:14.0	kick-start your investing journey. Our guest today is from Southern Oklahoma and
0:18.7	is a CPA and a bookkeeper with over 20 years of financial accounting experience.
0:24.5	She is going to give us a crash course on bookkeeping and how to hire the right
0:30.1	CPA for rookie investors. So a couple things we're going to discuss are finding an
0:35.1	accounting software that actually matches your goals, how to protect yourself
0:39.4	from legal liability, then some CPA red flags and actually went to fire your CPA. Lastly, should
0:47.4	you do your own bookkeeping or hire it out? So let's give a big welcome to Sarah Bratcher. Sarah welcome to the show.
0:56.3	Hi, thank you for having me. Let's start off with rookies feeling overwhelmed
1:01.9	when getting started and maybe this is just their first
1:04.3	business ever that they're having to track financials maybe they're a little messy
1:08.7	or unorganized so what is the first piece of advice you would tell them when they're feeling
1:14.3	overwhelmed like that with bookkeeping? So bookkeeping is really necessary
1:18.8	for your business but just because you have a but keep or have a business doesn't mean that you're going to be a pro at
1:26.9	bookkeeping. It's it's going to feel hard because it's not familiar to you. You have this idea, you're wanting to buy houses and you want to rent
1:37.1	them out and start this business and start some side hustle income or your full income and it's it's a byproduct of
1:48.0	starting a business you have to do your accounting to do your taxes and
1:52.4	especially in the real estate industry you have to
1:54.7	present your financials to your banker or your lender or your private investor
2:00.0	so it's it can get overwhelming and feel like a lot at the very beginning. And a lot of people, I have people come to me that just have maybe one or two houses and they're just like oh let me get these
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