Accountancy Resources
My wife and I own some income property between us and have operated a real estate management firm for a couple of years. We have used the same accountant at that time and we want to be sure he’s doing a good job. My question is, how do we do a finance check or an overview of accounting?
Basically, if you are familiar with accounting principles you should not have a problem going over the books yourself to find any discrepancies. If you lack accounting skills then you might want to start getting some if you do not want to pay another accountant to review your documents.
The first thing to get familiar with is the general accounts for your business, these consist of assets, liabilities, net assets, revenues, expenses, and gains and losses.
In a real estate company, the assets would represent the net worth of the real estate, the liabilities would be the amount owed on the properties; net assets would be properties owned outright, and the company’s liquid cash in the bank.
Revenues would be the money received in rents, while expenses would be the upkeep and maintenance of the real estate, property taxes, and other expenses such as electric utilities, sewer, and water services. Finally, gains and losses would be the end result of all the rents received versus all of the money spent on expenses, taxes, and property upkeep, as well as the salaries you pay yourself and your wife.
Taking the time to go over each item and do a finance check in each one of the categories cited above will give you and your wife a good idea of how well your accountant is doing his/her job. If you don’t have the time or don’t want to do it yourself, you can alternatively hire another accountant to look over your books.
Name
Website
Message