Accounting for your IP

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From: Simon St John


Hi everyone

Just interested in what type of accounting system people use for managing their IP's.

Questions in my head include:

- Do others use an accounting package (are any IP friendly, with an IP-oriented standard chart of accounts?) or just a spreadsheet or manual files (shoebox!).

- Do you calculate your own depreciation or just leave it to the end of FY for your accountant?

- What do the accountants advocate (eg Dale!)

- Do those with multiple IP's do something different to those just starting and when did you upgrade?

- Does anyone put every cent (even personal) through a package to aid in racking/budgeting ?

Just a few questions to get the discussion flowing.....

Cheers, Simon
 
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Reply: 1
From: Simon and Julie M


Hi Simon

I use an Excel spreadsheet to track my property portfolio. I track and categorize everything that goes in and comes out. I also analyze and project so I can plan. By doing this I have a clear picture of where I am financially at any point. I started out with a simple spreadsheet and it has evolved with the growth of our portfolio. My knowledge of Excel is basic but adequate for my needs.

My accountant handles the depreciation etc. at the end of the year.

Regards
Simon
 
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Reply: 2
From: Duncan M


Hi Simon,


We struggled with the same issue a few years ago, files full of receipts, half completed spreadsheets, Tax Time was a nightmare.. so we wrote our own record keeping package.. and now sell it.

http://www.otter-software.com.au

Its not a strict accounting package, it has screens for all of the cashflows that one has with multiple properties. If you keep the records up to date with your PAYE earnings it gives a nice report on your tax position from day to day through the year.

We also package it with a free report on the "10 Top Things the Tax Office really dont want you to know about Tax and Investment Properties", it represents all of our experiences, research and, yes, even a Tax Audit from the last 5-6 yrs.

Its amazing the effect that record keeping really has, it helps maintain the passion from day to day.


Regards,


Duncan.
 
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Sim

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Reply: 3
From: Sim' Hampel


Quicken Personal Plus is all you need...

- it's cheap ($119 or $75 for the basic version)
- it's very mature (I've been using it for nearly 10 years - since about version 3)
- it's got great data entry and data management
- it can handle multiple IPs
- it can handle trusts/companies
- you can download your transactions from your online banking and import it
- you can export to files or to Excel
- reporting is powerful and is a breeze
- can track loans and property values
- you can use it to track depreciation (have to calculate manually though)
- can track home inventory for insurance purposes
- pretty graphs
- tracks super and shares too
- it's the most widely used personal finance software in the world !
- it won't scare your accountant
- it just works

- it doesn't come set up completely for IPs out of the box, but customising it is a no-brainer.

Unfortunately I don't own shares in Reckon Software :(

 
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Reply: 3.1
From: Simon St John


Thanks Sim and Simon for such extensive replies. I had a feeling Quicken might get a favourable mention. I run MYOB for business but it's not really oriented toward personal/IP use, but it certainly can be altered I guess.

Interested to hear what others do as well.

Cheers, Simon
 
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Reply: 3.1.1
From: Michael Yardney


Simon
We run an extensive property portfolio through Quick Books Pro. It's similar to MYOB but has an advantage of something called classes and you can allocate each property to a class which allows you to get reports for each property or class. It also handles GST well for commercial and industrial properties and writes invoices to tenants - useful for commercial/ industrial
where you get reimbursements of outgoings.
For a smaller residential only portfolio, I feel its little brother Quicken would work equally as well for a smaller expense, and its easier to use.
Michael Yardney
Metropole Properties
 
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Reply: 3.1.1.1
From: Simon St John


Thanks Michael.
As I don't think I'll be into commercial IP for a while I think you're right, Quicken could be the go as Sim says. I downloaded a trial version and its better than MYOB in some regards.

Cheers, Simon
 
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Reply: 3.1.1.1.1
From: Dale Gatherum-Goss


Hi Simon!

I prefer my clients to do some of the work for themselves for a couple of reasons. It keeps their costs down and this means that they're not paying me to do something that they can and should do themselves.

I also like them to keep their own records because it brings together what they are doing. So often, it is the second year where I get the phone call saying that the penny has finally dropped . . .

I encourage people to use whatever they feel comfortable with. Spreadsheets are fine, Quicken is good, and so is a programme called "Rental Manager"

Duncan, I might have to look at your software.

Leave the technical things, like depreciation, to your accountant as he has a legal responsibility for this as opposed to using the other information that you provide.
And, the law changes constantly and so there may be a better way to do something.

Have fun

Dale
 
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Reply: 3.1.1.1.2
From: Michael Croft


Hi Simon,

Just to confirm what you are discovering. We run MYOB for the businesses and Quicken for tracking the IPs.

Michael Croft
 
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Reply: 3.1.1.2
From: Jas



I use Money. It has the same classes as Michael stated for Quick Books
Pro. It'll also do GST and reports on any variation.
The only thing it won't do is invoicing - but I've set up a database for
that :)

Jas
 
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Reply: 3.1.1.2.1
From: Kevin Forster



It's probably not for everyone but I wrote the database that handles our accounting for IPs using MS Access. That way I could customise it to our particular needs, create an interface that's easy for the wife to use, generate the reports that I wanted to in the format that I wanted, create reports for the accountant that's easy to understand and she likes.

I wouldn't recommend paying someone to write one specifically for you but if you know someone in the IT industry that has a grounding in financial systems then getting a custom made one can be better than a package. Might cost you a slab though.

I found writing the database, really made me understand how debits, credits, capital expenditure, etc items hung together and the impact on my bottom line. Plus probably didn't harm the career at all either.

Just a thought

Kevin
 
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Sim

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Reply: 3.1.1.2.1.1
From: Sim' Hampel


A slab ?

Sheesh, you wouldn't be getting a professional programmer worth any money to write you a "custom" accounting package for a mere slab !

Ask your/your neigbours kid to do one for you... just as good as most stuff churned out by cheap programmers and a heck of a lot more cost effective. And if they are under the age of 18, you would get an incredible system for a slab ! ;-)

 
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Reply: 3.1.1.2.1.1.1
From: Michael G


Brings back old times, does it Sim' ?

Michael G :)
 
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Reply: 3.1.1.2.1.1.2
From: Kevin Forster


Sim

Most people in the IT industry tend to get hit upon to fix PCs, optimise them, add new hardware, etc by family and friends and do it for nothing. If they got asked to write a package, most would also do it for nothing, although would probably do it quicker if they got something in return.

That's the line I was taking, not going and ringing someone out of the phone book and getting them to do it for you.

Kevin
 
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Sim

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Reply: 3.1.1.2.1.1.2.1
From: Sim' Hampel


On 2/15/02 11:10:00 AM, Kevin Forster wrote:
>
>Most people in the IT industry
>tend to get hit upon to fix
>PCs, optimise them, add new
>hardware, etc by family and
>friends and do it for nothing.

Yup, done this. Stopped when they started pestering me for help fixing this that they had broke.

>If they got asked to write a
>package, most would also do it
>for nothing, although would
>probably do it quicker if they
>got something in return.

Disagree. Sure, people with slack jobs and lots of spare time would possibly do this.

Building a computer is relatively easy (I do it a lot).

Writing a program is more difficult and takes time (I also do that a lot).

Writing a program which will work well enough to not have the person you did the "favour" for ringing you every other day asking when you will have that fix done, takes a LOT of time.

Personally, my time is way too valuable for doing stuff like this for other people.

>That's the line I was taking,
>not going and ringing someone
>out of the phone book and
>getting them to do it for you.

Wasn't referring to ringing someone at all.

If you have friends like this, great... by all means have them write you something. Just don't expect too much that's all.

 
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Reply: 3.1.1.2.1.1.2.1.1
From: Kevin Forster



I suppose it's what you using as a baseline to code. An MS Access database with a front end and reports can be whipped up in about 4 hours. Starting with MS VB or C++ would take alot longer.
 
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