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Importance of Complete Financial Documentation in Real Estate Investment Bookkeeping


stack off financial documents
financial documents

In the world of real estate investment, accurate and comprehensive bookkeeping is crucial for the growth and success of your business. Unlike your tax preparer who may only need year-end summaries, your bookkeeper needs to see all your source documents pertaining to your business. These detailed records help ensure that your business revenue and expenses are recorded correctly and can provide you with precise financial reports.


Money In: The Lifeblood of Your Business


The first category of documents that we need concerns the money coming into your business. This can include the details of funds deposited into your business account, invoices, sales tax collected, online platform reports, and personal fund contributions.

For instance, if you sell properties through online platforms such as Zillow or Realtor.com, these sites provide reports that break down what you sold and, if applicable, the sales tax collected. If you make personal contributions to your business, it’s important to provide details on whether it’s an owner’s contribution or structured as a loan to be paid back with interest.


Money Out: Tracing Your Business Expenditures


Secondly, it’s equally crucial to provide records of all business expenses. This means expense receipts (including online ones), check registers, copies of checks or stubs, pre-authorized deposits or withdrawals, and even records of personal withdrawals from the business. Remember, never pay personal expenses directly from your business funds – instead, take an owner’s draw and then pay what you need to pay.


Other Important Documents: Fleshing Out the Financial Picture


In addition to the ins and outs of cash flow, other documents help paint a more comprehensive picture of your business’s financial health. These include bank statements, credit card statements, vendor statements, documents relating to the purchase, repair, or sale of capital assets, lease agreements, loans, contracts, and inventory listings.


Payroll Information: Keeping Up with Employee Payments


Finally, we require payroll information and reports, including new employee information. Whether we are processing your payroll or you are doing it yourself, it’s important to provide year-to-date reports, payroll reports, wage breakdown for each employee, W4, I-9, pay rates, and deduction information for each employee.


In essence, we need to understand where your money comes from, and where it goes.

Yes, this is a lot of information, but remember, all these pieces together form the complete puzzle of your business finances. Without them, not only can the process become frustrating, but you may also end up with inaccurate financial reports which can be detrimental for a real estate investment business.


By providing all necessary information, you not only make your bookkeeper’s job easier but also ensure that you are on the right track for financial success in your real estate investing journey.

If you are a real estate investor looking for comprehensive business advisory, consulting services, accounting services, bookkeeping, or tax filing services, don’t hesitate to reach out and contact us. we are confident that we can provide you with the expertise and support you need to achieve your financial goals and make the most of your investments for real estate businesses in Clermont, Florida and nationwide.


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