Hello. We do not escrow our property tax payments. This is the first year that we have paid property tax. Is it best to show the expense monthly (similar to a prepay) rather than showing as one large expense in November of each year? If I show it as a monthly expense, then how do I handle the yearly payment? Do I just delete it out? Any suggestions is appreciated!
@doublespropertiesllc It’s totally up to you, but keep in mind that Stessa is designed as a single-entry cash-based bookkeeping program. Spreading the tax payments evenly over the course of the year would be an accrual approach, which you would then want to apply to all sorts of other income and expense items to be consistent. The vast majority of Stessa customers stick to cash-based entries across all income and expenses, including lumpy tax payments.
Yes, this approach makes your cash flow bounce around, but your cash flow really is bouncing around and it’s hard to argue with reality.
Hope that helps!