---
title: "Basic Accounting During Your Rebuild"
slug: "accounting"
description: "Managing the finances of a home rebuild after a disaster can feel overwhelming, especially when insurance companies, banks, contractors, and personal funds are involved. Learning basic accounting principles and staying extremely organized will greatly simplify your rebuild, speed up insurance reimbursements, and reduce stress.  This Rallyback article walks you through the essentials of organizing your financial records, understanding the flow of funds, and tracking expenses effectively during your rebuild."
updated: 2025-11-21T20:45:11Z
published: 2025-11-21T20:45:11Z
---

> ## Documentation Index
> Fetch the complete documentation index at: https://rallybacks.loti.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Accounting

# **Basic Accounting During Your Rebuild: Staying Organized and Understanding Money Flow**

![](https://cdn.document360.io/e3e6d4bd-783c-404a-ae48-078db5956f3f/Images/Documentation/Loti - Article - Accounting(1).webp)

Managing the finances of a home rebuild after a disaster can feel overwhelming, especially when insurance companies, banks, contractors, and personal funds are involved. Learning basic accounting principles and staying extremely organized will greatly simplify your rebuild, speed up insurance reimbursements, and reduce stress.

This Rallyback article walks you through the essentials of organizing your financial records, understanding the flow of funds, and tracking expenses effectively during your rebuild.

![](https://cdn.document360.io/e3e6d4bd-783c-404a-ae48-078db5956f3f/Images/Documentation/Loti - Organized Docs.webp)

## **1. Getting Organized: Your Primary Documents**

To keep your accounting in order, start by identifying and securely storing your key financial documents:

- **Invoices:** From contractors, suppliers, designers, architects, engineers, and other professionals.
- **Receipts:** For every purchase, from major building materials down to small items and services.

These documents are crucial when submitting expenses to insurance, the bank, or a Public Adjuster (PA).

## **2. Accounting Basics: Tracking Expenses**

You don’t necessarily need specialized software like Quickbooks, but you **do** need to create a clear and accessible accounting system. At a minimum, your system should:

- Clearly identify **what your insurance has paid** and what remains.
- Track **what you owe the**Contractor**and when payments are due**.

### **Working with Insurance-Friendly Contractors**

It’s particularly helpful to have a contractor who has experience working with insurance claims. They can:

- Help organize expenses according to your insurance Policy’s coverage categories (or "buckets"):
  - **Coverage A (Dwelling)**
  - **Coverage B (Other Structures)**
  - **Ordinance & Law coverage**
  - Debris Removal
  - **Landscaping**
  - Personal Property
- Properly package invoices for each coverage category, streamlining your claims submissions.

### **Leveraging a Public Adjuster**

If hired, one important service a Loti Public Adjuster provides is expert accounting and documentation of losses and rebuilding expenses. A good PA:

- Organizes and packages your financial documentation accurately.
- Maximizes your recovery from insurance by clearly demonstrating eligible expenses and reimbursements.

## **Why Organized Accounting Is Essential**

Consider this scenario:

- Your insurance initially pays out a combined $1,000,000 for Coverage A & B.
- Your policy includes an **Extended Replacement Cost** provision, granting an additional 25% ($250,000).
- To access this additional amount, you must **fully account for the initial $1 million first**.
- Once documented, you submit additional expenses to claim the extra $250,000.

Without detailed records from the very first dollar spent, you risk losing out on these crucial extra funds.

> [!NOTE]
> *Loti can help:*
> 
> *Loti provides a suite of financial tools and services to help you manage all the associated accounting hurdles of your rebuild.*

## **3. Understanding the Flow of Money**

In a rebuild scenario, funds typically reside in four main places:

1. **Insurance Company**
2. **Bank (**Mortgage****Escrow**)**
3. **Your Personal Accounts**
4. **Contractor**

Understanding clearly where the money is at any given time—and who owes what—is critical. This understanding is the key to smooth communication and preventing costly delays.

![](https://cdn.document360.io/e3e6d4bd-783c-404a-ae48-078db5956f3f/Images/Documentation/Loti - Mortgage Bank.webp)

## **Managing Funds with a Mortgage**

If you have a mortgage, your bank holds a significant portion of your insurance payout in an escrow account, releasing funds in stages as your rebuild progresses.

### **Example:**

- Suppose you have a total insurance payout of $1,000,000.
- Initially, the bank might release **$200,000** to start construction.
- Subsequent payments are only released after specific stages and inspections are completed. Typical inspection milestones (the number and type vary by district, bank and more but are similar in practice to construction loans) include:
  - Foundation
  - Framing
  - Roofing
  - Electrical
  - Drywall and finish work

### **Bank Inspections**

Each milestone will require both **county inspections and bank inspections**. After the county approves a stage, the bank sends an inspector:

- Once approved, the bank releases additional funds to pay your contractor.
- Keep your bank informed with regular accounting updates and provide all documentation promptly to avoid delays.
- Final payments are typically withheld until the bank completes a Final Inspection.

## **Wrap-Up: Organization is Key**

Your rebuild will involve significant financial complexity. Learning basic accounting, staying highly organized, and understanding the flow of money between insurance, banks, and contractors are essential skills. This careful organization not only simplifies your rebuild, but also helps you maximize your available insurance coverage, keep your construction project on track, and ensure a smoother, less stressful recovery.

Also known as a private adjuster, public adjusters are hired by you as a homeowner to represent your own interests regarding your claims. These can range from individuals to large firms and vary in cost but usually command 10-20% of your total claim.

A person or company responsible for construction work.

This is the legal contract between you (the insured) and your insurance company (the insurer). The primary purpose of this contract is to make your accidental loss financially palatable in exchange for a pre-determined fee (your premium).

The process of collecting and disposing of construction waste and debris.

Also sometimes referred to as Coverage C in your policy. This bucket of coverage includes everything NOT permanently attached to your home or other buildings on your property. This generally includes items such as clothing, furniture, toys, jewelry, household appliances and artwork as well as some more subtle things such as cash, food and even your identity.

A mortgage is a type of loan to purchase your home or other types of real estate. The property itself is collateral for an agreement where the borrower pays the lender over time. In a claims process, checks for repairs in coverage A & B may be written out to both your lender as well as yourself. In addition, your lender will typically require a final inspection (just like when you initially opened your mortgage / purchased your home) before releasing final funds.

Funds held by a third party on behalf of the transacting parties.

The base structure of a building, typically made of concrete, that supports the entire building.

The skeleton or structure of a building, typically made of wood or steel.

Panels used to create interior walls and ceilings.

A comprehensive inspection before occupancy to ensure the entire building complies with all codes and regulations.