As an accountant, there’s no greater feeling than seeing that your Schedule E clients’ books are organized, accurate, and easily accessible.
As an accountant, there’s no greater feeling than seeing that your Schedule E clients’ books are organized, accurate, and easily accessible. However, this experience is not always guaranteed and you may instead come across messy, inaccurate books that need to be untangled in order to be decipherable.
In this article, we’re going to take you through some tips on how you can help your Schedule E clients by simplifying the rental property accounting process so that you and your clients have more time to spend on streamlining business practices and optimizing their rental cash flow.
There are a few ways your clients are likely keeping their books. Often it’s a messy mixture of physical documents and digital accounts. Going through these, reconciling transactions, and tracking down relevant receipts is at best a time-consuming process and at worst can result in clients overpaying taxes and being unhappy with the service you provide.
Generally, real estate investors use a variety of different systems. Systems that work for them but can be hard to decipher at tax time. These will likely include a smorgasbord of tools and processes including:
How should your schedule e clients be tracking their rental property accounts? There is an easier way. By converting all of your schedule e clients to a landlord accounting software, one designed specifically for them, you will be able to add value to their business, saving and your practice time and money.
If you work with multiple Schedule E clients, it’s likely that you have come across a whole range of spreadsheets. Many landlords, especially those who have just started on their journey, will document their financial activity using spreadsheets. These will vary greatly from client to client and some will be basic, whereas others will be advanced. Some may be comprehensive yet easy to understand but others will be disorganized and hard to navigate.
Fundamentally, spreadsheets are time-consuming and tedious to keep up to date. This often results in investors putting off their accounting to the end of the quarter, or worse, the end of the year.
Even if you’re clients have a spreadsheet, they’ll probably also have an array of physical documents and paper records as well. If you’re not so lucky, they may be keeping paper records for everything and you could be dealing with mountains of hard to read paperwork and receipts detailing the income and expenses of the entire year.
Reliance on paper can quickly spiral out of control. Not to mention that receipts and other paper records can be misplaced or destroyed with no chance of recovery.
What if your Schedule E clients kept secure, digital copies of all of their records? Even better, imagine if they could digitize their receipts at the point of sale…
For Schedule E clients, QuickBooks lacks some industry-specific functionality such as being able to treat each property as an individual business and tailored financial reporting.Plus, unless you’re a QuickBooks expert this software can easily lead to confusion, incorrectly categorized income and expenses, and missed deductibles.
Wouldn’t it be great if all of your clients used the same income and expense tracking software? Imagine not having to spend time re-categorizing expenses so that they match up with the Schedule E tax form.
Similar issues that plague CPAs also affect clients when it comes to rental property bookkeeping.
If a landlord finds it difficult to track their income and expenses throughout the year, they won’t be as motivated to maintain their records. This could lead to half-hearted record-keeping which will in turn make it harder for you to do your job as their CPA. In contrast, when their rental property bookkeeping is stress-free and easy to manage, they are more likely to present you with tidy books.
Furthermore, if your Schedule E clients lack the ability to scan and store their paper documents and receipts in a secure location, they could end up with gaps in their bookkeeping. This could lead to frustration on your part as you are left chasing loose ends.
Enter Landlord Studio. By recommending purpose-built property management software like Landlord Studio to your clients, they will be able to easily track their income and expenses, digitize receipts, link their bank feeds, and generate customizable financial reports. Not to mention additional features such as online rent collection and tenant screening.
Instead of rushing to file their taxes at the end of every financial year, clients can keep on top of their bookkeeping throughout the entire year as they have the means to do this efficiently.
The best thing is that landlords and property managers can then give their accountant or CPA (you!) access to their data through the software’s CPA view function. Doing away with many of the headaches associated with some of the common methods of bookkeeping will leave you with tidy books, happy Schedule E clients and a more positive experience overall. What’s not to love?
If all of this sounds helpful to you, consider joining the Landlord Studio partner program. We partner with forward-thinking tax professionals like you, to deliver a world-class experience to your rental property clients, while maximizing firm efficiency during tax season. It will enable you to save time, help your clients better understand their finances and add value to your tax-related services.
“I have yet to find software that consolidates PM functionality with accounting software. QuickBooks continuously raises their prices, it has nice accounting functionality, but for a good cost-effective and industry-specific software, check out Landlord Studio.”
Daniel Hyman, My Online Accountant
“Since implementing Landlord Studio in our business, I have seen a reduction of 50% of the time I usually spend with my clients. This is a massive saving and allows us to focus on providing better value-added services to our clients.”
Tim Taylor, Stopfords Accountants
The easiest way to streamline your processes is to ensure that your clients are on the same page as you. What better way to do this than to take advantage of industry-leading property-management software?
Together, we will help you deliver more value, streamline tax season and unlock opportunities to help your clients achieve their financial goals. Not to mention, we’ll save you from stress and give you back valuable time and control.