A number of people ask what the best method to use to track expenses during a flip. There are many methods, some good, some bad, and some downright ugly.
The following lists a few methods with the most complex at the top.
- Quickbooks
Utilize Quickbooks, categorize every expenditure, create sales accounts, link credit card and bank account for spending. Provide your Quickbooks file to your accountant at tax time.
Relative Degree of Difficulty: 10
Cost: 6
There is a learning curve to Quickbooks and if you want to do things properly, there will be a number of hours put in for the initial company, vendor, account, and category setups. I peg the cost at a 6 out of 10 due to the cost of the software. Done properly, your accountant will thank you. - Hire a book keeper/accountant to do the work for you.
Schedule a regular meeting time during the renovation. At that time you can have receipts recorded properly by your bookkeeper while keeping your work on the project.
Relative Degree of Difficulty: 1
Cost: 9
The level of difficulty on your end is minimal. Keep every receipt, provide it to your bookkeeper during your scheduled meetings, and provide fast answers when questions should arise. You will certainly be paying a decent buck for this service, but you will probably sleep better at night knowing that you are prepared and up to date.