Sunday, December 14, 2014

"Wave Accounting and how I set it up for real estate" - Real Estate Investor

Scott Weaner for Bigger Pockets writes: 

Nathan Emmert

Real Estate Investor from Byron Center, Michigan


Asked me to post about Wave Accounting and how I set it up for real estate.  Whether it's set up for real estate or not (they have that option when they ask what sort of business it is), they have a number of "other" categories that can simply be renamed.  It's a manual process (and a bit slow as there is no copy and paste type feature I could find) but it's only once and you're good to go.
So here's the login page... like I said, a nice visual interface as you'd expect from a web based app.
You can scroll down a bit for more on how you're doing this year and compared to the previous year...
Here's how I set things up...
So to set things up... go to the accounting tab on the right (the +/- Box)... and click "Add Account in the top right... Then you are going to pick Asset, Liabilities, Income, or Expense as appropriate and find an "Other Account" you can rename.  I like using Cost of Goods Sold for my expenses so I can get a snap shop pre mortgage payments of where I'm at on the properties.
After this is all set up, then you simply do entries into the program under the transactions tab (2nd button with the lines in it).  This is basic accounting and I believe there is even a tutorial on the help page if you haven't done it before...
Things that don't fall into an expense or income category can be done at the top as a journal entry (additional owner investment, escrow rebalancing, etc)...
Do this all and you get some nice reports off the reports tab (the graph icon)...
I have things done at the property level but you could choose to do it down at the door level if you wanted.  It lets you do invoicing directly from the program (not a feature I use).  You can upload bank statements directly into the program for simplicity (my Property Management company pays most of the expenses directly so I flow everything off their reports).  Personally I don't find the one side bar ad all that intrusive for a free app with the functionality this has... the biggest complaint is that you can't make sub accounts (i.e. 1 expense account for a property with sub-accounts for each particular expense type) but you can export directly to MS Excel and re-arrange and graph however you want there if you needed to a higher level view to show someone.

Hopefully this helps others interested in the program... not bad for free :)

5 comments:

  1. I never heard about wave accounting, and I am not that much interested to learn how to manage real estate. You know I am just a student of accounts and so I am searching for some useful notes published by Aloke Ghosh. Can you help me in that?

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  3. L.A. Smith, thanks so much for this. we have referred back to in multiple times and found it to be extremely helpful. We have a lot of questions.

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  4. Wow, you have mentioned each step systematically and I did exactly same. It worked for me.

    Thanks for such a wonderful piece of information.

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