7 BOOKKEEPING MISTAKES THAT REAL ESTATE BUSINESS OWNERS MAKE AND HOW TO AVOID THEM LEON MCKENZIE
2. Paying For Business
Transactions Using Personal
Debit and Credit Cards
Are you one of those real estate
investors that use your personal
debt and credit cards to pay for
business transactions?
You need to stop.
Doing this is just as bad as using
3. Poor Record Keeping
a personal bank account to run
your business operations. It’s Are you one of those people who assume that when the time comes to
going to be very difficult for you do your taxes you will remember it all?
to keep track of your personal
and business expenditures. You
How is that working out for you?
will need to spend more time
and effort to find out what Poor record keeping is a serious issue for some real estate investors.
belongs where, which you may You may fail to keep receipts of the building or renovation materials
not be able to do. that you use. You may also fail to keep a record of your debts or
payments to freelance professionals that you hire. Categorizing
So, what should you do?
employees or expenses wrongly may also be an issue. Regardless of
what the problem is, poor record keeping will come back to haunt you
It’s really simple: get separate
in the very near future – when the taxes come calling.
debit and credit cards for your
businesses. And if you are not in The first thing to do is write down everything you spend in the way of
a position to do so, then business transactions. Use a business credit or debit card to pay off
dedicate one debit or credit card your expenses because it makes everything much easier to track. Be
to business transactions for easy sure to ask for a receipt always. Then make sure that you have
accounting. Doing so helps you categorized your business transactions and employeerelated
build creditworthiness not just on expenses correctly. In addition, keep a very close eye on what is
a personal level, but on a coming in and going out of your business accounts. Be sure to keep a
business level as well. record of your business activities going back a few years, just in case.