I have a few cards linked that I do personal spending on, what should I do with those transactions? Just delete? is there a personal category?
@daltonkuehl Good question! We generally recommend simply deleting personal expenses as Stessa is not designed to track personal spending, budgets, etc. Stessa is intended to operate as a dedicated platform for everything related to your rental properties only.
As an alternative, you can also use the “Transfers” category to “park” whatever expenses you want to track “below the line,” where they won’t impact property performance or NOI/NCF reporting. Hope that helps!
I think there should be something added for Person expenses to be able to track everything coming out of my LLC that is personal
But what’s the point of doing that? If they’re personal and not related to the business, why wouldn’t you simply delete their entry from Stessa? What’s the value of having a personal category in this case?
On a side note, you should also be careful of mixing personal expenses with business expenses from your bank account… can risk “piercing the veil” between your LLC and you personally, should someone decide to sue the LLC. Caveat: I’m not an attorney, talk to a professional.
Instead of just deleting transactions from your bank account and not being able to account fro them it is better to have a category even if its personal. Let’s say once a month or year you withdraw $1,000, it will be better to mark it as personal so if you get audit you can share them 100% of your data and not some data with deleted transactions.
@daltonkuehl right now the system is setup to delete these BUT I am not the type of persona that likes to delete any transactions so I created an profile with my personal house in it and put everything under it using a category that i know i will never need. Hope that helps
@devin any luck we will get personal added to category or something?
@dsingh.propertiesllc No, sorry to say but we will not be supporting personal expense categories. Stessa’s core premise is that it’s purpose-built for rental property owners. It’s simply not intended to serve personal budgeting or accounting needs.We will continue to funnel resources towards features that are specifically related to owning residential real estate assets.
Your bank account will always have those transactions; removing them from Stessa will not remove them from your bank account records. And to use your example: if you’re pulling out $1k from the business, you can classify that with Transfer>Owner Distributions.
I agree with some of the others here, there is no point in having personal transactions in Stessa. If you have personal transactions as an LLC then you ruined part of the point of an LLC unless you treat those transactions as member distributions (which is supported). I use other software (like Mint) to track personal stuff. I share a credit card with my business (Amazon card) but I just delete those transactions that are personal.I want a clean picture of how my rentals are doing in Stessa.
I agree with this. Does simply categorizing this as Transfers - Owner Distributions solve the problem or should I assign or create a different portfolio too, such as a Portfolio with personal expenses so I have a way of looking at my transaction history without them?
Just delete your personal expenses from Stessa entirely; there’s no need to see them in the transaction history, as they’re not related to the business. If you’re talking about transferring money out to you (ie. profit), you can use Transfer>Owner Distributions. If you’re talking about buying your family groceries, then you should simply delete those as they’re not business-related expenses. And if you’re using an LLC, you shouldn’t be using the same bank accounts for your personal and business assets… that can jeopardize the legal protections of the LLC, which is the whole point of using them.
for IRS purposes, the books (financials) would need to match the bank statements. Deleting the transaction would cause for a discrepancy that’s not accounted for. Wouldn’t every transaction need to be accounted for?
I’m not a CPA, so I can’t speak to your question as a professional in that regard. My opinion is that the IRS would simply go back to your bank account as the source of truth for the flow of money. For the purposes of Stessa, which is to track and categorize your properties and transactions and provide metrics of portfolio performance, there’s no value in keeping your personal transactions. And your business transactions will never perfectly match your bank statement because you often have to split charges to properly categorize them, anyway. As an example, when you close on a property, you typically wire over a large sum of money; that sum of money is closing costs, various prepayments, often includes escrows, etc. Even a mortgage payment to your lender can be split up into mortgage principal and mortgage interest, and also property tax and insurance escrows (if those are escrowed).
That is what I did. Created a different portfolio and putting it under that house as well as marking it all Owner Distributions. End of the day I agree I should try to keep them separate but I cant afford that so this is a great workaround. This way i know how much I am withdrawing as well.