Sign in to Fortress OSImproving Your Property Management Accounting with Best Practices
Good property management accounting comes down to three habits. Set up accounts and sub-accounts so every dollar has a home. Generate invoices automatically to cut data entry errors. Reconcile accounts often so your records match your bank. Do these three things and your books stay clean.
Key takeaways
Build accounts and sub-accounts so revenue and expenses are tracked per property and per unit.
Generate invoices automatically through your software to reduce manual entry errors and slow payments.
Reconcile accounts regularly so your records match bank statements and official documents.
Clean accounting data is what lets you make timely, reliable decisions about your finances.
Automating accounting frees your team from repetitive tasks so they can focus on real estate relationships.
Good accounting practices are essential for any business to ensure proper bookkeeping, audit trail creation, and accurate financial reporting. When it comes to property management software, there are a few best practices that should be followed in order to optimize the accounting functions of your system. This blog will discuss some of the most important best practices to follow when setting up and using property management software for accounting.
1. Set Up Accounts and Sub-Accounts
The first step in setting up an effective accounting system is creating accounts and sub-accounts. This allows you to track all financial transactions related to your property management business. Each account should have a unique name that accurately reflects its purpose, such as “Revenue” or “Income”. Sub-accounts can also be used to further categorize accounts into more specific areas, such as “Rent” or “Utilities”. This will help you track revenue sources as well as expenses associated with each property/unit managed by your business.
2. Creating Invoices
Invoices are crucial for tracking payments from tenants and other parties who owe money for services rendered by your business. These invoices should include all necessary details such as due dates, payment amounts, itemized charges, taxes, etc., so that the recipient has all the information they need in order to make their payment promptly and accurately. To ensure accuracy and reduce errors associated with manual data entry, it is recommended that these invoices be generated automatically through your property management software whenever possible.
3. Reconciling Accounts
Reconciling accounts regularly is an important best practice for any accounting system—especially when dealing with a large number of properties or tenants. Reconciliation involves verifying that the records stored in your software match up with bank statements and other official documents related to income and expenses associated with each unit/property managed by your business. Regularly reconciling accounts helps ensure accuracy of data stored in your system which is essential for making timely decisions based on reliable information about the current state of finances within your organization.
Property management software can be a powerful tool for managing finances associated with multiple units/properties but only if the right best practices are followed when setting up the system and recording transactions within it. Following proper setup procedures such as creating accounts and sub-accounts, generating invoices, and reconciling accounts will help ensure accuracy of data stored within the system which is essential for making informed decisions regarding financial affairs within an organization. By implementing these best practices into their workflow, property managers can maximize their efficiency while ensuring quality control over their property management businesses’ financial operations.
Start Automating Property Management Accounting
Fortress is a solution designed to simplify the pesky and redundant property management tasks, allowing you to focus on building and fostering real estate relationships. With Fortress, many elements of property management can be automated, including property accounting. Learn more about Fortress from the articles below:
- How Property Managers Save an Hour or More Each Day With Fortress
- Which Property Management Tasks can you REALLY Automate?
- Property Managers Discuss Why They Love Fortress
- GlobeSt.com Names Kerri Davis a Women of Influence
- What Property Management Automation & AI Mean For Property Managers in 2023
Or schedule a demo with our team below and see Fortress in action:
Built by operators, for operators. Posts under this byline are written and reviewed by the team.
Frequently asked questions
Quick answers to what people ask about this topic. Still curious? Talk to our team.
Contact UsWhat are accounting best practices for property management software?
Three core best practices matter most. First, set up accounts and sub-accounts so every transaction is tracked by property and unit. Second, generate invoices automatically to reduce manual entry errors. Third, reconcile accounts regularly so your records match bank statements and official documents.
Why should I use accounts and sub-accounts in property accounting?
Accounts and sub-accounts let you track every financial transaction in your business. Main accounts like Revenue or Income hold the big picture. Sub-accounts like Rent or Utilities break things down further, so you can see revenue sources and expenses tied to each property or unit you manage.
Should property management invoices be generated automatically?
Yes. Automatic invoices reduce errors that come from manual data entry. A good invoice includes due dates, payment amounts, itemized charges, and taxes, so the recipient has everything they need to pay promptly and accurately. Generating them through your software keeps the process clean and fast.
What does reconciling accounts mean in property management?
Reconciling accounts means verifying that the records in your software match your bank statements and other official documents tied to income and expenses for each unit or property. Doing this regularly keeps your data accurate, which is essential for making timely decisions based on reliable financial information.
How often should property managers reconcile their accounts?
Reconcile regularly, especially when you manage a large number of properties or tenants. Frequent reconciliation catches mismatches early and keeps your records accurate. Accurate records are what let you make timely, informed decisions about the current state of your organization's finances.
Can property management accounting be automated?
Yes. Many elements of property management accounting can be automated, including invoicing and account tracking. Fortress is built to handle the repetitive, time-consuming tasks so your team can focus on building real estate relationships instead of manual bookkeeping. Automation also reduces the errors that come from manual data entry.
Related resources
Property Accounting Built In
See how Fortress handles accounts, invoices, and reconciliation in one connected system.
AP and Procurement Tools
Manage invoices and vendor payments without the manual data entry and errors.
The Fortress Core Platform
One operating system that ties accounting to leasing, maintenance, and reporting.
