As a property investor, you’re sure to be a savvy buyer. However, how good are you at bookkeeping? It’s a skill that’s easy to sweep under the rug, but it’s vitally important that you keep up to date with it and handle it appropriately – otherwise it’s an issue that can bubble up to the surface and affect your business in a big way.
Read on to discover some invaluable tips that we’ve picked up to help property investors like you tackle their bookkeeping head-on.
Set Up Digital Filing
Fed up of all the paperwork and clutter crowding your home or office? As an investor, you’re no doubt going to have hordes of paperwork coming through each year that you need to save – and the last thing you want is to misplace them.
By creating a digital filing system, you’ll be able to access all the documents you need on any device at any time. You can do this by scanning your reports, property manager summaries, legal fee receipts and more and storing them on a cloud service such as Google Drive or iCloud. Instead of rooting through mounds of paperwork, you’ll be able to get what you need with one quick search.
Know What Documentation You’ll Need for Tax Season
This is best done before tax season rolls around, so book an appointment with your accountant and talk with them about what kind of documentation you’re going to need to present to the ATO when you file your returns and claims.
Best practice is to keep hold of all receipts for your business expenses, no matter how small. These all tend to add up. If you’re not certain of what you can claim for and what you can’t, speak with your accountant, as they’ll be able to point you in the right direction. Be careful, however, not to misplace any receipts, as you’ll likely have to pay tax on the related purchases.
Know How to Pay Your Investment Expenses
One of the best sure-fire ways to stay on top of your expenses is to never pay them out of your own pocket. Set up a separate account for your business purchases. If you can’t get around paying for something yourself, keep a record of them and give this list to your accountant.
Understand the Documents Your Accountant Will Need
Keep hold of monthly rental statements and invoices form your property manager or ask them to send you a yearly statement.
If you’ve carried out renovations for your property, you’ll also need to get a Quantity Surveyor to give you a Scrapping Schedule. They should also be able to provide you with a Depreciation Schedule for the property. In addition to this, you also need to make sure your lender provides you with a loan statement so your accountant can work out the interest you’ve paid on your loans.
The information and links provided on this website are for general information only and should not be taken as constituting professional advice. This information does not take into account the financial situation or particular needs of individual readers. Before making any decisions about matters discussed on this website, you should consider whether it is suitable for you in light of your own circumstances, and seek appropriate advice.