accounting - Blog - REO Pro Network

These five steps have and can help you assess your current situation and point you in the right direction.

1: Develop an emergency fund to help get you throughout the unexpected occurrences that are bound to happen in a slow economical time. Work on setting aside $1000.00. This should be used for the worst case scenario.

2: Do not take on any new debt for the next 18 months.

3: Begin collecting all past due accounts. If you do not have personal to do this, look to a factoring company to collect those debts. If a factoring company says the debts are to old or cannot be collected, hire a collection firm. Getting 20 cents on the dollar is better than getting nothing. It is better to have a factoring company or a collection company doing this than for you to waste your time. Besides they have the skill and tools to get money.

4: Start making those sales calls to the companies that have turned you down in the past.

5: And the most important of them all is always have an exit plan. Many people in business for them selves never have a exit plan. Do you plan on retiring from your business, leave it to the kids, or the wife if something happens. What does your profit and loss look like?

Most people looking to purchase a business want it to have high profits and little loss. Are your going to sale the assets to get your retirement set up?

Reposition your business. The best course for action is to start at the basics. Know how much revenue you produce against your costs. Know your accounts receivables and the quality and diversity of the clients you have. NEVER PUT ALL OF YOU EGGS IN ONE BASKET. Manage all of your assets with a plan.

Be prepared for those lean times, they will come when you least expect them.

Be willing to listen. Look for innovative ways of doing business and cost saving revenue producing streams. Look for information outside of your standard business areas.

Another big one is know the risk your customers represent to your revenue producing capacities. Whats there credit rating? How is there payment history? What are there projections for growth? What are there weaknesses?

Do not let a single company represent any more than 25% of your total revenue or accounts receivable.

Continually farm and look for new business and means of creating business.

Do not divert cash from your company for personal use. You draw a salary or a wage and it needs to be paid as such. It should not be paid from the profits or whats left at the end of the month for the company to grow.

Being an REO agent you learn that there are a lot of out of pocket expenses that you must front for the bank- utilities, repairs, inspections, cfk, HOAs and even some liens. At any given time you could be out of pocket thousands of dollars. If you are a high volume REO agent, it is best to hire someone to focus on organizing the bills, inputting them correctly into each companies system and getting the reimbursements back from the bank. This could save you thousands of dollars and time that you could spend selling the property!When hiring a bookkeeper, you can post a job via craigslist, an accounting temp agency or even a referral from your CPA. The latter two choices are preferred ways of choosing a candidate. Look at other ads from employers to get ideas for a good WANT ad and be as detailed as you can to eliminate unrelated resumes. You can check going rates for bookkeepers with craigslist, the temp agency and your bookkeeper. Remember, bookkeepers don't have to work full time. Many are more than willing to work 2-3 days or even a couple hours a week.What do you look for in the resume? Look for experience for at least 2 years in the field. Also, make sure the candidate is familiar with your accounting system. If you don't have one in place, an experienced candidate can recommend an accounting system- excel and quickbooks are more popular programs. The candidate you choose will be able to set them up for you. Definitely check their references by calling their previous employers through your own resources. The phone numbers they provide for their references are more than likely friends who will them give great references. Because the hired will have access to your bank accounts, it is also recommended that you do a background check on the person.Once you have them in place, make sure you have some checks and balances to ensure there is no leakage of funds. Sign all the checks yourself, don't give them access to direct funds or passwords for access, have another person or yourself do deposits, deposit all checks separately so that you can itemize each one's deposit receipt with each bill it is related to, and lastly review your accounting reports frequently. I cannot emphasize that you must have some knowledge of your accounting system. You never know when you need to change bookkeepers, handle the books yourself, change passwords in an instant or just know the passwords when they are absent.Here's to truly making a commission on the REOs and not a net of all your expenses you paid!!

accounting (2)

Staying in Business

Tips for hiring a bookkeeper to get your expenses back

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