The business of real estate and property management can be very difficult to manage if you don’t define the niche you are; this is because, real estate isn’t all about developing properties and reselling to potential buyers, it also entails sourcing and managing tenants on behalf of property owners, or acting as a middleman between interested parties who would like to execute high-ticket transactions for a commission.
These categories of real estate businesses require a different accounting system and financial reporting. For instance, accounting for a real estate broker requires effective recognition of commission income after deducting direct expenses like advertisement on dailies, or any other relevant direct cost. This is totally different from a real estate manager who is interested in tracking rental payment from tenants, receivables on overdue rent, remittance to property owners, service charge collections and maintenance fees.
As of this write-up, our team had just concluded QuickBooks setup for a fast-growing real estate developer in Lagos, Nigeria – they acquire a large expanse of land from families, clear the land and re-package the virgin land into an estate land, process the necessary papers like excision, survey, C of O and resell to interested buyers.
The whole essence of engaging us was to help design an automated accounting system that will track all cash inflow and direct cost on their various real estate projects so that they can ascertain the profitability of all real estate transactions.
Here Are Quick Tips On How We Deployed Quickbooks Starting With The Project Requirements:
- List of banks and their respective balances: every cash inflow from buyers on property purchases and payment to sub-contractors or service providers goes/come from the bank and such, we requested for a complete list of operating banks in local and/or foreign currencies so we upload to the Chart of Account and generate real-time bank statement.
- List of clients/customers and their receivable balance (including the properties on which these balances were owed): This is important for us as we weren’t only interested in the client’s receivable balances, but a simpler to segment their receivables by properties. In addition to the outstanding balances on property purchase, we also requested for pending payments on the survey, developmental fee and deed of assignments.
- List of real estate on offers: This is the key revenue driver of the real estate developer, so it makes sense to upload all the properties on sale and set them up in such a way that users can categorize all invoices and direct cost to properties.
- Sub-contractors/service providers and their payable balances: every land acquisitions come with clearance, dredging and construction of walls around it. These, in addition to other related expenses, are examples of direct cost incurred on these properties and when full payments aren’t made to the sub-contractors, it leads to a payable balance which should be properly tracked until they are settled.
- Equity share capital: For real estate developers with an audited record of their previous financial year’s transactions, it is easier to find the equity share capital of the owners, but for a growing business with unorganized record, QuickBooks compute a share capital that is equal to the net of assets over liabilities.
- Standard chart of accounts: Although, QuickBooks accounting software has default charts of account for different industries – a simple design that categories all your transactions to income, expenses, assets and liabilities. We always like to know whether the client already has existing charts with account codes.
Continue reading “Why Real Estate Developers & Property Managers Prefer QuickBooks Software”
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A microlending or credit finance company is a business that provides quick personal or business loan to its customers, and in return earns interest on the loan. This type of business requires proper documentation of the names of customers, loan disbursed (on a daily, weekly and monthly basis), payback period and the expected interest return.
While Excel seems to be popular among microcredit finance Company, especially in the area of calculating the interest receivable on loans, QuickBooks financial software lets you keep a proper record of your reports by showing customers and loan receivable balance, interest income, profit or loss, balance and cash flow statement.
As of this update, we are currently deploying QuickBooks accounting in a fast growing consumer loan and credit finance company, so it is usual for us to share brief details about the projects and how we have successfully set opening balances for onward transaction entries.
Customers and Loan Balances
Before the commencement of the project, we sent a mail requesting for the list of all customers and their loan balances. The balances were posted to the loan receivable balances so you can easily track the expected cash flow from your customers and follow up on overdue balances.
For clients with over 100 customer base, the import section of QuickBooks makes it easier to quickly migrate the customers with the value that is expected from them as at a selected closing balance date.
Continue reading “How QuickBooks Helps Micro Lenders to Track Expected Cash Flows”
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- how to carry out bookkeeping of a micro lending company (1)
Two weeks ago, we received an invite from one of the reputable Transport and Haulage Companies in Nigeria. This company is a group with three (3) subsidiaries: one is a spare part importation and engineering department, the other provides transport services while the third provides logistics services to FMCGs.
The three (3) departments use QuickBooks Enterprise to manage and track cash flow on a daily basis. However, there are some challenges: improper posting of transactions that resulted in several imbalances, and wrong ending figures in the books of account.
In resolving this, we conducted a full review of their QuickBooks entries and discovered that despite the fact they have been using the software for more than 5 years, their transactions were not treated the way they ought to be treated in the accounting software. This, coupled with similar challenges from clients in other industries, led us to conclude that a lot of QuickBooks users in Nigeria are neither exploring nor maximizing the full potentials of the software. We have reviewed QuickBooks Chart of Account, from real estate to hospitality, oil and gas sector, manufacturing, retail, credit company, etc., and we found out that there were irregularities in the Books of Account.
What we found in their books of account:
Upon review of the company’s QuickBooks accounting software, we discovered the following irregularities on the file that manages the transport service section:
- Wrong Set-up of the branches and the buses under management.
- The sales of tickets and branch expenses were wrongly treated.
- Cash deposit by various branches cashier into the bank was wrongly treated.
- Bank balances were in red, indicating that such accounts were overdrawn.
- Cash deposit on tickets sold for the day was not sent or attached to the sales receipt for validation.
- The Class list did not represent branches and as such, profits or losses by branch report were not available.
- Reconciliation of the bank statement will not be easy if “write check” window is used for the cash deposit.
- The customer balances’ did not reflect the actual position of the company
Continue reading “Why You Need an Expert for your QuickBooks Pro, Premier & Enterprise Implementation”
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