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:
Or schedule a demo with our team below and see Fortress in action: