Bookkeeping is not one of the most exciting aspects of your real estate business. However, it is one of the most important. An effective bookkeeping system is a viable tool you can use to maximize your revenue, reduce expenses, identify new investment opportunities, and monitor your equity.
Throughout the buying and selling process, you will need accurate accounting reports and records so that your financial situations, both professional and personal, are organized and in compliance with the tax laws in your area. So, how do you bookkeep effectively for success?
Know Your Guidelines
The first step in having a successful bookkeeping system is knowing the guidelines you have to adhere to. These guidelines revolve around the parts of your business that you can write off come tax time, codes of conduct that apply to your accounts, and the things you will need to do differently as an independent contractor. Without knowledge of guidelines, you won’t be able to keep track of your books.
Choose an Accounting Method
Once you are privy to what the law expects of you, you have to choose an accounting method that works. There are several options to choose from, such as whether or not you will remit quarterly or annually and if there is a set schedule involved.
Working for an office also provides the option, sometimes, of them taking the taxes off for you so that you don’t have to worry about it. Having taxes taken care of while you focus on the monetary aspects of your real estate business may be the most effective method for you but less effective for someone else. It’s about choosing an accounting method that works for you and your real estate business.
Hire a Bookkeeper
It can be easy to fall behind in getting receipts and transactions in order, especially if you have a busy schedule. That is why hiring a bookkeeper can be a viable option for keeping track of those things in real-time. This way, you can avoid having to pay a fortune at a later date just to get caught up.
Use Accounting Software
Accounting software such as QuickBooks or FreshBooks makes it easy to keep all of the information stored in one place and calculate any taxes that you need to pay automatically. This autonomous system can give you more freedom from bookkeeping while simultaneously keeping you on track.
Choose When Your Will Remit HST
You can remit your HST quarterly and yearly. However, you have to know which category your business falls under. If you work and live in Ontario, you will have to remit quarterly if your yearly HST collections exceed $3,000 for the previous year. While it may seem like more work to do this quarterly, it does break up the remittance into smaller sums so that it appears easier to track and pay when the time comes.
Bookkeeping is a vital part of your business and keeps you on top of the finances in an organized way. If you are interested in taking your bookkeeping to the next level, contact us today for a bookkeeping strategy session. We can help you get in touch with the right people and on track to perfect accounting.