In episode 8 of our Talking Real Estate with Peter and George video series, George Dube and Peter Cuttini discuss how cloud bookkeeping with a program like QuickBooks Online can benefit your business.
George:
Good day, and welcome to Talking Real Estate with George and Peter. Today, we’re going to back and forth … I guess Peter is going to do a little bit more of the talking here. But I’m going to chat with Peter regarding QBO, and how that can be a tool used for clients. And for that matter, others in their business affairs. I’ll leave it at that. Peter, maybe you can start off with just describing for us what really QBO is all about.
Peter:
Sure. Thanks, George. QBO, or QuickBooks Online, is basically your bookkeeping package. QuickBooks has been around for a number of years, 30 years. Most of my career, I’ve heard of QuickBooks. QuickBooks is now moving away from desktop, and they’re moving to an online version. Everything in the cloud. It’s an extremely powerful tool for real estate investors, and for any small business owner in that you don’t have to keep all the records. Everything is done in the cloud and remotely. Very easy to share with your bookkeeper or your accountant. Easy place to store information.
One of the biggest advantages of QBO is the ability to your bookkeeper or yourself to go into your bank account and download all the transactions. With certain programs, one of them being Receipt Bank, you can almost get predictive in terms of the transaction. Once it sees that a union gas is gas and you’ve coded it a couple of times, it’s going to know it’s gas, and automatically post that to utilities. It’s this kind of stuff that really makes your lives easier, whether it’s your life personally because you’re doing the bookkeeping, or your accountant or bookkeeper’s life easier.
It’s a lot more powerful. It’s a great way of keeping organized. And at the end of the day for the end user, if you’re not doing the bookkeeping, you’re outsourcing that … all you really need to have the ability to do is allow them access to your bank account. Obviously, read only. And the ability to take pictures with your phone to upload to the program for any receipts that you have. And after that, really, we can take the real estate investor or the business owner right out of the picture after that. We may have a couple of questions here and there, but it really does make your lives a lot simpler.
George:
Peter, maybe you will describe for us … I mean, from my background I started using, I believe, the desktop version in 1997. [crosstalk 00:02:45] It’s been around for a bit, at least, and it’s probably there before. What are the differences between QBO versus the desktop version, and what are some of those pros and cons? Why should I choose, or why should our clients choose one versus the other?
Peter:
Sure. Ultimately, I think the biggest difference … one’s in the cloud. And one, you have to store on your home computer. The advantage is obviously being in the cloud. That’s the backup. You can access it anywhere. You can access it from your phone. The desktop version, if you’re not doing proper backups … and how many people really do proper backups anymore? That computer dies or you get the blue screen of death, your records are gone. Versus if they’re online, you have access to them anywhere.
Let’s assume you’re on vacation and you need to look at something. You’re not going to bring your laptop down or your desktop down on your vacation, but you can pull the stuff up on your phone. You can approve invoices on your phone. It keeps you more connected on a day-to-day basis. The online version, if you’re running your own business, is really powerful for sending invoices. Because you can do them up, send them directly to the client using QBO. They have the ability to enter their either PayPal or their credit card number right there, and they can pay you through their phone. It’s a lot easier to get paid instead of having to print off invoices, email them, or mail them out, wait for a check. No. Everything’s done electronically. And that’s a huge, huge advantage for a business owner.
George:
Excellent. Just earlier this week, I was chatting with one of our existing clients and discussing with him moving from an Excel-based bookkeeping system to QBO. But maybe you can share with people why they should be looking at that as compared to … Not that it’s a hard and fast requirement. I get that. But I’ll let you address that.
Peter:
Unless you’re super, super organized, [inaudible 00:05:01] up with Excel. It makes it harder on the accountant, which means more fees for you. It doesn’t have a balance sheet. You can’t access information at a certain time. All you’re seeing is … It’s a lot harder to manipulate what last November’s profit is versus this November’s. It’s old school. It’s archaic. I don’t think it gives you the information that you need. Now, if you’ve got a property and all you’re doing is counting the rent, and paying the union gas, okay. Fine. You could probably get away with that. But if you’re scaling up, no. Eventually … and I think eventually pretty quick, that Excel is going to be outdated for you.
George:
I think that’s a great point just with the regarding scaling up. Yes, maybe we can handle it today. But what’s that going to look like? Particularly if we have a number clients obviously that want to get involved with joint ventures, or other reporting requirements to outside parties. Let alone refinancing or obtaining financing for another new property. But, yes.
Peter:
I think also it makes the reporting to the joint ventures a lot easier. You can just burn off the profit loss. As opposed to Excel, you’ve got to manipulate it and you’ve got to post it. It’s all there. You don’t need any extra work.
George:
You mentioned Receipt Bank. Can you give us an idea of what that’s all about?
Peter:
Sure. Receipt Bank’s basically the program that will go into your bank account, download the transactions. We were talking about that predictive transactions. That’s going to be there. It’s also going to be the ability for you to use your phone. Take a picture. You’re at Tim Horton’s out with a client or out for dinner. Take the picture, upload it to Receipt Bank directly, and it puts directly into QBO. Used to think of it as … I hate saying it. Receipt Bank. It’s the storage. You can download all your invoices in there. It’s a very, very powerful tool. Think of it as your filing cabinet almost.
George:
Okay. It sounds like this would be a great tool, particularly for our clients that … they want to go to the LCBO, pick up their accountant their favorite bottle of scotch-
Peter:
Or two.
George:
And go golfing after. Pick up the tab. Excellent tool for clients to consider who are working with their favorite accountants.
Peter:
Yeah. Absolutely.
George:
What do we do for someone perhaps in the … well, I guess it doesn’t make any difference. I don’t think … I’ll let you answer that. But they have a few employees, and maybe it’s only a couple. How easy is it to use QBO with that, or some form of system?
Peter:
Yeah. There’s a couple of add on programs for QBO. We use Wagepoint. It’s basically ADP-like. Especially if they’re salaried employees, you set them up once and it automatically takes care of everything for you. It takes the money out of your bank account. It makes remittances. This is truly the powerful nature. Not only you get QuickBooks, but all these add on programs that can help you with payroll or whatever the case may be. And QuickBooks has been around for so long. There’s a lot of these add on programs depending on what industry you’re in that could really be helpful as opposed to the Excel spreadsheet.
And for payroll for a couple of employees, yeah. This makes total sense. If you’ve got 20, 30, 40, you probably just want to outsource that. You probably ADP, or the BDO payroll services, or whatever the case may be. There’s going to be a point in time when it’s just not worth it. But if it’s a couple of employees, yeah. These programs have got all the tables. It makes it so much easier. You enter their salary, or their hourly rates, and it figures out everything, and you move on from there.
George:
Yeah. And if I can chime in on kind of using the BDO payroll or something to that effect, at some point … and I don’t think that point’s very high. It’s a whole lot nicer to have somebody else dealing with the little payroll idiosyncrasies that may happen, and get the peer review from [Revenue Canada 00:09:12] at the end of the year. Let somebody else deal with that. I’m guessing then that this Wagepoint can make that process a lot simpler should we have questions.
Peter:
Yeah. But you still need to figure out the peer report. A couple of employees, that shouldn’t be a huge issue.
George:
Right.
Peter:
But it’s like any business. Eventually you can’t control everything. You’re going to have to rely on third parties or employees to do stuff for you.
George:
I don’t know that we touched on that. And I know one of my little pet peeves, I guess, with some of the programs … The one nice thing with the desktop version of QuickBooks is like in my case, between some of the different companies I have on the real estate side, my professional company. And then I have roughly 10 not-for-profits that I do bookkeeping for. With the desktop version, I have one program, one fee.
Maybe kind of just jump into that. I don’t know if there’s a threshold where … Because obviously this online part to it sounds far easier than most. Although just last comment, and then I’ll be quiet for a moment. In fairness with the desktop version, we have that with Dropbox essentially, so that we do have some backup capacity, et cetera. But we also have the capacity … If my wife and I are both into the same program at the same time, we just corrupted the file.
Peter:
Yeah. I think the biggest advantage or disadvantage for QBO in the desktop version is that you do need to pay a monthly subscription for each company that you’re running under QBO. Versus desktop, you buy the software and you can put a whole bunch of different companies. You got to decide: does the additional costs outweigh all the … or does all the extra features in QBO online and making your life easier outweigh the costs of that monthly subscription? And for some cases it might.
George:
Okay. That sounds reasonable. And having the organization and everything there available, of course. Some of the … I don’t know, people may find a touch confusing. Should I get the desktop version QBO, some of these other ad-ons, or even how do I get set up? So, I want to start my business, and whether that’s real estate investing, development, construction, manufacturing, retail, consulting. What the heck ever. Can you help us out?
Peter:
I would say you’re probably going to move to the online version eventually. I don’t know this for sure, but I imagine the desktop version is not going to be serviced down the road. QuickBooks is making a big push on the online version. They’re all making a push on the online version. That’s going to be the big difference that I think … and you just need to look at the features. I mean, ultimately I think for most people the features make a lot more sense to go QBO. I think that’s going to be the determining factors. Look at all those features, see where it saves you time. And then the fees aren’t going to be absorbent. Let’s not kid ourselves. Also, if you’re one of our clients, we can get you a discount for the monthly subscription online.
George:
Which is not available for desktop. Is that correct?
Peter:
Correct.
George:
So, if our clients now decide, “Yeah, we want to go through this.” Is there somebody … I’m guessing you’re not the person I know very well. You’re not the person that’s going to actually be doing the bookkeeping and what have you. But are you going to be … how do we start this process with your team?
Peter:
Reach out to me. I will introduce you to our bookkeepers. I’m not going to be the one doing the bookkeeping. But at the end of the day, I’m responsible for the group. Reach out to me and I will put you in touch with the right person.
George:
And will they be able to, I guess, help clients decide or work with them? I know there’s not, for example, a fixed contract that says something to the effect of, “I must now get my bookkeeping done for the next three years by BDO.” Maybe I want to learn how to use the program, get familiar with it, but I don’t know how to start. Do we have some tutorial services available? I know we’ve seen people change their mind and say, “You know, my time’s a lot better spent if I just watch the grass grow in the backyard and let somebody else do this, or put some deals together,” or whatever it is.
Peter:
I say this to most new clients, especially if you’re starting out with a new investor or a new business. If you want to do it yourself, great. Make sure you get one of our staff, spend a couple hours, two, three hours with them, and get trained on how to use it. It will save you so much time in the end, whether it’s desktop or online. You’re not having to learn everything. They can show you all the tricks of the trade and all the shortcuts. It’s well worth the price.
George:
Excellent. Any parting comments, or can you think of something we haven’t really addressed with QBO?
Peter:
Ultimately, reach out to us. I honestly am a firm believer of this. This is going to be the wave of the future. Everything’s going to go online. Actually [inaudible 00:14:50] future is here now. BDO, we do a lot of these. This is one of our big focus areas. Feel free to reach out to any of us at any time.
George:
Excellent. Thank you, and thank you everybody for watching our episode. We look forward to having you watch another episode.
Peter:
Take care, everyone.
To contact Peter or George you can email pcuttini@bdo.ca or gdube@bdo.ca.
Tags: bookkeeping, video
