A spreadsheet works when you have 1 or 2 rentals, 1 bank account, and a handful of transactions a month. It usually stops working well around 3 properties, or the first time you have a rehab, a refinance, or a second LLC. The problem usually isn't the spreadsheet itself. It's what the spreadsheet can't tell you.
What a spreadsheet does well
It lists what came in and what went out. If you enter every transaction and your rent and expenses are simple, you can add up the year and hand the totals to your CPA.
Where the spreadsheet falls short
It doesn't check itself. Nothing in a spreadsheet tells you a transaction is missing. Books kept in accounting software are reconciled to the bank and card statements every month, so a missed payment or a duplicate shows up right away instead of at tax time.
Loan payments get recorded as one number. A mortgage or loan payment is part interest and part principal. Only the interest is an expense. When the whole payment goes in as an expense, each property looks less profitable than it is, and the numbers your CPA starts from are wrong.
Repairs and improvements get mixed together. A repair is deducted in the year it happens. An improvement is added to the property and depreciated over time. A spreadsheet doesn't make you decide which is which, so most people don't.
You can't see each property on its own. Totals for the whole portfolio hide the one rental that's losing money every month. Property-level reports show what each one actually made after every expense.
Contractor payments slip through. Payments made by Zelle, cash, or a personal card are easy to miss, and contractors you pay $2,000 or more in a year generally need a 1099 from you.
Signs you've outgrown the spreadsheet
You own 3 or more rentals, or more than 1 LLC
You have a rehab running, or you've refinanced a property
Your CPA has asked you to "clean up" your numbers, or charges extra to sort them out
You're not sure what each property made last year
You spend more than a few hours a month entering transactions, or you're months behind
What a bookkeeper changes
We record every transaction to the right property, reconcile every bank, card, loan, and escrow account each month, and split loan payments correctly. You get a profit and loss for each property and for the whole portfolio, and at year end your CPA gets a clean package to file from.
You still see everything. The difference is that the numbers are checked every month, so you can make decisions from them instead of finding out in April.
Where to start
If you're not sure whether you need help yet, tell us where your books stand. We'll go through it on a short discovery call and you'll leave knowing what the work would look like, whether you hire us or not.
REVI Bookkeeping works with house flippers and long-term rental landlords anywhere in the US.
