Expense Management

Expense Management is where RealBooks earns its keep. Every dollar you spend on your properties flows through here — categorized, assigned to the right property and entity, and flagged for tax deductions. The goal is simple: never miss a deductible expense again.

How Expenses Get into RealBooks

There are four ways expenses enter the system. Use whichever combination works for your workflow.

1. Bank Linking (Automatic)

Connect your bank accounts, credit cards, and mortgage accounts. Transactions import automatically throughout the day. PennyAI categorizes each one based on the vendor, amount, and your past categorization patterns.

Best for: Investors who use dedicated accounts for real estate expenses.

2. Receipt Scanning

Snap a photo of a receipt or upload an image. PennyAI reads it and extracts:

• Vendor name
• Amount
• Date
• Suggested category and property assignment

Best for: Cash purchases, contractor payments, on-site expenses where you need to capture the receipt in the moment.

3. Email Invoicing

Forward invoices to your RealBooks email address. PennyAI parses the invoice and creates an expense entry with the vendor, amount, line items, and due date.

Best for: Recurring bills from property managers, utility companies, or service providers.

4. Manual Entry

Add an expense by hand when the other methods don’t apply.

1. Go to Expenses > Add Expense
2. Enter the amount, date, vendor, and category
3. Assign it to a property and entity
4. Save

Best for: Cash transactions, owner contributions, or expenses from accounts you haven’t linked.

Transaction Review Workflow

Whether transactions come in from your bank or from PennyAI processing a receipt, they follow the same review flow:

1. Imported — The transaction appears in your inbox
2. Auto-categorized — PennyAI suggests a category, property, and entity based on the vendor and your history
3. Review — You approve the suggestion or make changes
4. Confirmed — The expense is locked in and flows to your reports and tax schedules

Reviewing Transactions

From the Expenses page:

• Transactions waiting for review appear at the top
• Each shows the vendor, amount, date, suggested category, and suggested property
• Click Approve to accept PennyAI’s suggestion as-is
• Click the transaction to edit the category, property, entity, or add notes before confirming

Tip

Review transactions daily — even just a minute or two. Staying current prevents a backlog and keeps your reports accurate in real time. This is especially easy on mobile.

Training PennyAI

Every time you correct a categorization, PennyAI learns. If you reassign a Home Depot transaction from “Supplies” to “Repairs & Maintenance” on your Oak Street property, PennyAI will suggest that same assignment next time it sees a Home Depot charge.

Over time, your approval rate goes up and you spend less time reviewing.

Expense Categories

RealBooks uses IRS-aligned categories so your expenses map directly to tax schedules. Common categories include:

Category	IRS Schedule Line	Examples
Repairs & Maintenance	Schedule E, Line 14	Plumbing fixes, HVAC repairs, painting
Insurance	Schedule E, Line 9	Property insurance, liability coverage
Property Taxes	Schedule E, Line 16	Annual property tax payments
Mortgage Interest	Schedule E, Line 12	Interest portion of mortgage payments
Utilities	Schedule E, Line 17	Water, electric, gas (landlord-paid)
Management Fees	Schedule E, Line 11	Property management company fees
Legal & Professional	Schedule E, Line 10	Attorney fees, CPA fees, bookkeeping
Advertising	Schedule E, Line 5	Listing fees, vacancy advertising
Travel	Schedule E, Line 18	Mileage to properties, travel for inspections
Supplies	Schedule E, Line 15	Cleaning supplies, office supplies, tools
Capital Improvements	Form 4562	Roof replacement, new appliances, additions

Note

Capital improvements are tracked separately from operating expenses because they’re depreciated over time rather than deducted in full in the year they’re incurred. RealBooks handles this distinction automatically.

Budget Management

Set spending budgets at the property level or entity level to keep your expenses on track.

Setting a Budget

1. Go to Expenses > Budgets
2. Click Create Budget
3. Choose the scope — a specific property, an entity, or a category
4. Set the monthly or annual budget amount
5. Save

Tracking Against Budget

Once a budget is set, RealBooks shows:

• Budgeted amount vs. actual spend (monthly and year-to-date)
• Percentage used with visual progress indicators
• Projected overage based on current spending pace

You’ll receive alerts when you approach or exceed a budget threshold. This is especially useful for rehab projects and properties with variable expenses.

Mixed-Use and Personal Expenses

If you use a personal account for some real estate expenses, or if a property has mixed personal and business use, RealBooks lets you flag those transactions:

• Business percentage — Set the deductible portion (e.g., 75% business use)
• Split transactions — Divide a single transaction into business and personal portions
• Personal flag — Mark a transaction as personal so it’s excluded from reports

This keeps your deduction calculations accurate without requiring you to maintain completely separate accounts.

Expense Reports

Pull expense reports for any combination of:

• Date range — Monthly, quarterly, annual, or custom
• Property — One property or all properties
• Entity — One entity or all entities
• Category — Filter by specific expense types

Reports can be viewed on screen, exported as PDF for your CPA, or downloaded as CSV for further analysis.

Standard Reports (All Plans)

• Profit & loss by property
• Expense summary by category
• Year-to-date expense totals

Ad Hoc Reports (Paid Plans)

• Custom filters and groupings
• Cross-entity comparisons
• Category-level drill-downs

Sharing with Your CPA

Give your CPA read-only access to your RealBooks account (available on paid plans). They can:

• View all categorized expenses
• Pull reports directly without you exporting and emailing files
• See the same data you see, organized by entity and property

This eliminates the back-and-forth of “can you send me the receipts for…” and “what category is this expense?”

Common Questions

What happens if I categorize an expense incorrectly? Edit it anytime. Open the transaction, change the category or property, and save. Your reports and tax schedules update automatically.

Can I import historical expenses? Yes. Upload bank statements (CSV or PDF) and RealBooks will import and categorize the transactions. Bank linking only captures transactions from the date you connect forward.

How does RealBooks handle refunds? Refunds imported from your bank appear as negative expenses. Assign them to the same property and category as the original charge, and your net expense totals stay accurate.

What if one expense applies to multiple properties? Split the transaction. Open it, click Split, and allocate portions to different properties. This is common for portfolio-level insurance policies or shared maintenance contracts.

Is there a limit on the number of expenses? No. All plans support unlimited transactions.