Quoted $185 a month to keep books on nine transactions

Question

Raw land, three parcels, no income at all. What actually moves through the accounts in a month is a property tax payment, an occasional mowing invoice, sometimes a survey or a title company charge, and the interest on the note against one of them. Nine transactions in a heavy month, three in a light one.

The quote I got was $185 a month, which is $2,220 a year against a portfolio that produces zero revenue. My first reaction was that this is absurd for what amounts to a page of entries. My second reaction was less certain.

The reason I'm not just deleting the email is that land accounting is almost entirely about basis. Every dollar I spend on a parcel either adds to what I paid for it or it doesn't, and the answer changes depending on the item and on choices about carrying costs that I don't fully understand and that my preparer says depend on elections I'd have to make. If I get that wrong across five or six years and then sell one parcel, the number I have to defend is the one I built by hand in a spreadsheet with no reconciliation behind it.

The counter is that a monthly bookkeeping service is built around volume and reconciliation, and I have neither. Paying a monthly retainer to reconcile nine lines feels like buying a cadence I don't need to solve a documentation problem.

There's a middle version, an annual or semiannual engagement where somebody competent organizes the year and confirms the per-parcel schedules. I don't know if anyone sells that or whether the monthly retainer is how the market is priced.

wendy_park48 · Accepted Answer

The thing your ledger has to do on land is produce a defensible basis per parcel on the day you sell one, and possibly six or eight years from now when you don't remember any of it. Monthly reconciliation isn't what gets you there. A permanent file per parcel does.

What I keep for each parcel is a single running schedule: acquisition price, closing costs from the settlement statement itself rather than from a summary, and then every dollar since, dated, with the invoice attached and a note on why it's there. Property tax, interest, insurance, survey work, road access work, anything. Whether a given carrying cost gets added to basis or handled another way is a tax election question that varies by taxpayer and changes over time, and it's genuinely for your preparer to answer in writing, but the accounting job is the same either way. Capture the item, keep the document, keep it attached to one parcel and never to "land" as a single line.

The error that costs people is allocation. You pay one $3,100 tax bill covering two parcels, or one surveyor invoices both in a single line, and it goes in as one entry. Five years later there's no way to split it that anyone would accept without redoing the work.

So the way I'd spend the money is on an annual engagement where someone competent ties your schedules to the bank statements and to the settlement statements and signs off. That's a handful of hours, not $2,220. And I'd move the parcels onto one dedicated checking account so the reconciliation @sextant is describing exists at all. That part is free.

dpatel_re · Answer

$2,220 a year on zero revenue is a real number, and on three parcels it's probably a meaningful percentage of your annual carry. I'd price the alternative before agreeing: what does a competent bookkeeper charge for eight hours of cleanup once a year? If it's $600 you have your answer.

The piece I'd push back on is calling this a documentation problem. The reconciliation is what makes a spreadsheet defensible. If your basis schedule ties to a bank account that ties to statements, it's evidence. If it's a spreadsheet you typed, it's an assertion.

hannah_west29 · Answer

Nine transactions a month is 108 a year. I have single months with more than that. Whoever quoted you $185 is quoting a minimum, not a volume price, and I'd say so to their face and see what happens. Every bookkeeper I know has a floor around $150 to $250 and every one of them has taken less for an easy file that fills a slow week.

kevin_lombard · Answer

The reason land is different is that the spending doesn't hit a profit and loss statement anywhere, it just sits on the balance sheet against each parcel until you sell. That's why @fathom is talking about a permanent file instead of a monthly close. I'd assumed bookkeeping was bookkeeping.

Quoted $185 a month to keep books on nine transactions

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