Monthly Bookeeping

[clwenner]

With Property #2 now fully under my belt I`m dying to get organized. I`ve used Don`s Power Paperwork System to get me started (i.e. colour coded files etc). My question is regarding Don`s list of 13 Classifications to keep track of Monthly expenses. They include;
1. Advertising
2. Caretaking
3. Financing & Borrowing Costs
4. First Mortgage Interest
5. Second Mortgage Interest
6. Condo Fees
7. General Repairs & Maintenance
8. Insurance
9. Legal & Accounting
10. Property Management
11. Property Taxes
12. Utilities
13. Auto

I also downloaded a great spreadsheet from our Critical Forms Section that allows me to plug in my monthly income & expenses but the classification numbers they used were different & much mroe extensive. Here they are:
1000 Rental Income

1010 Late Fees Collected

1020 Laundry and Other Income

1030 Vacancy

1100 Mortgage Principal Repayment

1120 Mortgage Interest

1130 Bank Charges

1140 Line of credit interest

1150 2nd Mortgage Repayment

1200 Mortgage Interest Penalties

1210 <Blank - insert account>

1220 Legal Fees

1230 Appraisal Fees

1240 Accounting Fees

1250 Bookkeepers Fees

1260 Inspection Reports

1270 Other Professional fees

1300 Insurance

1310 Management Fees

1320 Strata Fees

1330 <Blank - insert account>

1340 <Blank - insert account>

1400 Advertising and Promotion

1410 Meals and Entertainment

1420 Tenant Credit Check Fees

1500 Repairs

1510 Maintenance

1520 Updates

1530 Utilities-rental property

1540 Professional Cleaning

1600 Property Taxes

1610 <Blank - insert account>

1700 Office at home

1710 Internet

1720 Computer and office supplies

1730 Photocopies for Tenant purposes

1750 Tenant Gifts

1800 Travel

1810 Motor Vehicle

1820 Seminars

1900 Parking

2000 Misc
Seeing as how I want to make this as easy as possible for my accountant can anyone tell me which numbering system is better? Or most acceptable from an Accountant`s perspective?

And lastly, since the 2nd system is more involved, can anyone please confirm the difference between Repairs, Maintenance & Updates?? I`m assuming Repairs are things like patching a damaged wall, replacing a broken door handle, repairing a faulty light switch etc. Also, I assume maintenance to be snow removal, landscaping, salt for the driveway, cleaning supplis etc. Updates get me... are updates anything you do that brings the property to better state? i.e. new kitchen cabinets, new appliances etc.? What if I completely replaced a damaged floor with new material - is that a repair or an update since I didn`t keep any of the original floor. Or what if I refinished some existing hardwood - is that simply a repair or is it maintenance?? I think i`ve just managed to confuse myself!

Any help is a blessing!
Many thanks all!
Cindy

 

[mlwilliamson]

Cindy,

If you follow the system laid out in the Quickstart manual your accountant will love you for it. Any thing that you have a problem with he should be abe to clarify in a meeting. For some addtional information on bookkeeping and other tips. Checkout www.williamsonaccounting.ca and sign up for the newsletter.

Cheers!

 

[DonCampbell]

Hi,

The bottom line (pun intended0 on this subject is that the CRA form that you file for Statement of Rental Real Estate, clearly provides you with a limited number of classifications for expenses. That means at the end of the day, you will still be required (or your accountant will) to put all of the expenses under their catagories.

I recommend that you visit the CRA Site and download the T776E form (the latest version) to see what their classifications are.

http://www.cra-arc.gc.ca/E/pbg/tf/t776/README.html

The more detailed you make YOUR accounting classifications, the easier it will be for you to analyze your business, just remember that you will have to put them all into the CRA accounts when you file.

 

[mlwilliamson]

Hello Don,

Are you sure you are not also an accountant? That is exactly the case.

Regards,


QUOTE (DonCampbell @ Sep 21 2008, 06:33 PM) Hi,

The bottom line (pun intended0 on this subject is that the CRA form that you file for Statement of Rental Real Estate, clearly provides you with a limited number of classifications for expenses. That means at the end of the day, you will still be required (or your accountant will) to put all of the expenses under their catagories.

I recommend that you visit the CRA Site and download the T776E form (the latest version) to see what their classifications are.

http://www.cra-arc.gc.ca/E/pbg/tf/t776/README.html

The more detailed you make YOUR accounting classifications, the easier it will be for you to analyze your business, just remember that you will have to put them all into the CRA accounts when you file.

 

[DonCampbell]

QUOTE (mlwilliamson @ Sep 21 2008, 02:53 PM) Hello Don,

Are you sure you are not also an accountant? That is exactly the case.

Regards,

I am sure that I am not, but I am married to a brilliant one