Bookkeeping and Home Remodelling
Bookkeeping and Home Remodelling
The downhill slope to the front bedroom was rather a worry. The Building Inspection revealed a fall in the slab of almost four inches (100mm)! But what was the cause? No matter, a local company had come forward and given a quote in excess of $30,000 to underpin the house and "jack up the slab" to the original floor level.
It's a similar story often when a client presents their bookwork. On the surface everything looks great, and underneath there is a potential disaster. Often, as bookkeepers, we are asked to look at a client's bookwork, as they've been carrying out the data entry themselves.
There have been a number of occasions where the person doing the bookeeping has found a few problems, and the figures don't balance, so they make a few general Journal entries to "balance the books" and hope the problem will go away.
Well, maybe the problem does go away, but does it reveal the cause of the problem. And how do you, as the businesses owner, know that there wasn't a problem in the first place, and the "cover-up" work that has been done to your books has fixed the problem?
The vendor of the recently renovated property has covered up all the cracks. The external face brickwork has been rendered. Inside the walls and ceilings have been freshly painted, so that everything looks very presentable. But what is hidden behind the render, how bad were the cracks that appeared in the brickwork?
It's all very well to go and have the remedial work carried out, the floor slab raised, and some underpinning done to the house. But how would you know if that has fixed the problem, if you do not know the cause of the problem?
As bookkeepers, before we "fix up the bookwork" we like to go back to the source of the problem, and make any necessary adjustments whch often are as simple as an incorrect allocation, or an error in keying an amount or date.
Yes, the easiest and quickest solution is to make a journal entry and hide the mistake. Just as the vendor chose to render the external brickwork and hide the cracks - so that everything looks just fine.
The crunch has come that now the home owner is wanting to sell, nobody can make a fair estimation of the cost of fixing up the subsiding slab problem.
An engineer came to inspect the property. This engineer is very experienced in handling subsidence cases. He has recently been commissioned by the Queensalnd Government to carry out a survey of a residential area where many houses have suffered subsidence as a result of underground mining in the past.
So what is the true cost of this home renovation? The engineer shook his head, saying that if the home owner had got an engineer out to do a full report before any renovation work was undertaken, then they could look at the cause of the problem that had caused the slab to drop.
As the house stands, who knows what secrets are hidden behind the external render and internal painting. And without knowing the cause of the problem, who knows whether the remedial slab work and underpinning will do more good than harm.
Regardless of how much has been spent on the internal makeover of the house, the vendor is likely to face the consequences of his cover-up operation. He'll either have to sell the house at a hefty loss, or hold onto the house and turn it into a rental property.
Any potential purchaser would be taking a huge risk in purchasing this property, because there are too many unknowns. In a market where there are some "easy bargains" who needs to buy such a headache? This truly is an example of a costly renovation.
Be careful before to make any adjustments to your bookkeeping to get the figures "to balance", because if you do not really know what you are doing it can create more problems than it can fix.
Bookkeeping and Home Remodelling - To learn more about this author, visit John Stewart's Website.
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To the casual observer, there were a couple of cracked tiles on the floor, and a few hairline cracks in the external render, but nothing of consequence. The home had recently been painted, and with the new bathroom and half bathroom receiving a make-over, this house was very presentable.
The downhill slope to the front bedroom was rather a worry. The Building Inspection revealed a fall in the slab of almost four inches (100mm)! But what was the cause? No matter, a local company had come forward and given a quote in excess of $30,000 to underpin the house and "jack up the slab" to the original floor level.
It's a similar story often when a client presents their bookwork. On the surface everything looks great, and underneath there is a potential disaster. Often, as bookkeepers, we are asked to look at a client's bookwork, as they've been carrying out the data entry themselves.
There have been a number of occasions where the person doing the bookeeping has found a few problems, and the figures don't balance, so they make a few general Journal entries to "balance the books" and hope the problem will go away.
Well, maybe the problem does go away, but does it reveal the cause of the problem. And how do you, as the businesses owner, know that there wasn't a problem in the first place, and the "cover-up" work that has been done to your books has fixed the problem?
The vendor of the recently renovated property has covered up all the cracks. The external face brickwork has been rendered. Inside the walls and ceilings have been freshly painted, so that everything looks very presentable. But what is hidden behind the render, how bad were the cracks that appeared in the brickwork?
It's all very well to go and have the remedial work carried out, the floor slab raised, and some underpinning done to the house. But how would you know if that has fixed the problem, if you do not know the cause of the problem?
As bookkeepers, before we "fix up the bookwork" we like to go back to the source of the problem, and make any necessary adjustments whch often are as simple as an incorrect allocation, or an error in keying an amount or date.
Yes, the easiest and quickest solution is to make a journal entry and hide the mistake. Just as the vendor chose to render the external brickwork and hide the cracks - so that everything looks just fine.
The crunch has come that now the home owner is wanting to sell, nobody can make a fair estimation of the cost of fixing up the subsiding slab problem.
An engineer came to inspect the property. This engineer is very experienced in handling subsidence cases. He has recently been commissioned by the Queensalnd Government to carry out a survey of a residential area where many houses have suffered subsidence as a result of underground mining in the past.
So what is the true cost of this home renovation? The engineer shook his head, saying that if the home owner had got an engineer out to do a full report before any renovation work was undertaken, then they could look at the cause of the problem that had caused the slab to drop.
As the house stands, who knows what secrets are hidden behind the external render and internal painting. And without knowing the cause of the problem, who knows whether the remedial slab work and underpinning will do more good than harm.
Regardless of how much has been spent on the internal makeover of the house, the vendor is likely to face the consequences of his cover-up operation. He'll either have to sell the house at a hefty loss, or hold onto the house and turn it into a rental property.
Any potential purchaser would be taking a huge risk in purchasing this property, because there are too many unknowns. In a market where there are some "easy bargains" who needs to buy such a headache? This truly is an example of a costly renovation.
Be careful before to make any adjustments to your bookkeeping to get the figures "to balance", because if you do not really know what you are doing it can create more problems than it can fix.
Bookkeeping and Home Remodelling - To learn more about this author, visit John Stewart's Website.
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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