4 Accounting Improvements Landlords Should Focus On
In any property management business, and in any aspect of the company’s workflow, work gets bottlenecked or simply isn’t being done optimally.
Discover ManageCasa’s Accounting Solution
Given some landlords, HOA managers and property managers continue to do their work manually with spreadsheets or off-the-shelf software such as Quickbooks for accounting, there’s a lot of friction in accounting.
If you’re planning for the years ahead to lower costs and scale up properties, then straightening out accounting is a must.
And with the theme today of workload efficiencies and process improvement being sought, high friction, time-wasting activities will be reduced or resolved. It’s not about dealing with it, it’s about eliminating it.
Accounting is More Important to Your Success Today
If you adjust how you look at accounting for your company, you might recognize how it will give your entire business a boost.
Accounting is the cornerstone of modern rental property management, guiding decisions across crucial facets. It informs expense management by accurately tracking and analyzing costs, and facilitating strategic budgeting. In tax management, it ensures compliance and optimized reporting. For capital investment, accounting aids in evaluating returns and making informed decisions. Maintenance planning benefits from financial insights, allowing for timely and cost-effective repairs. Additionally, accounting supports effective budget management, providing a foundation for allocating resources and enhancing overall financial efficiency in rental property operations.
Efficiency Means Removal of Friction
In accounting, friction exists. It’s found in core accounting functions which in turn create extra work and time pressure in other areas of property management. There’s only one way to dial down that friction — a great property accounting solution.
4 Keys to Better Rental Property Accounting
Smaller landlord business owners can bring their accounting and business operations up by focusing on 4 fundamental accounting processes:
1. Cash/Paper-based Rent Collection: This is a serious time waster for managers given the time to accept cash and checks and issue receipts, record transactions manually and pursue tenants to collect rent. Some tenants don’t want to pay online, but in fact, it’s safer for them not to write checks or hand cash in. That’s risky today and there’s a higher probability of errors and bounced checks which may draw late fees and other charges. Waiting for physical payments and that slow banking process (at the mercy of banks) weigh property management down significantly.
It’s not easy to wean tenants off of paper checks and receipts, but if you have hundreds of units, it weighs your work down. Going digital with accounting and automating accounting transactions allows for better analytics and budget management. Automating online rent payment enables and encourages reliable, on-time rent payments from tenants.
2. Digital Payments: The fact is, more of the renting population is immersed in the digital payments world. They expect flexible digital payment channels from bank account and credit card payments to pay near me retail to PayPal or Google Wallet.
From your standpoint as a landlord, the rent payment gateway that ManageCasa uses increases on-time payment for tenants and for your paying vendors. It also brands your company as modern, efficient and with it. Digital payments feed directly into the accounting framework where entries/transactions are automated, thus reducing workloads and friction-producing manual activities.
3. Bank Account Reconciliations: Bank account reconciliations when performed manually are challenging when you have 5,000 tenants and hundreds of properties. Your accounting workflows include reconciling and paying funds to each individual property owner. When account reconciliation with various bank accounts is aided by automation, it reduces errors from the tedious and error-prone process of bringing to balance. And reports are more reliable and software diagnostics help you find errors faster. That means fewer attempts to bring to balance.
4. Tax Forms: 1099s: ManageCasa streamlines the process of generating 1099 reports and filing of 1099 forms. Via the W9 that you have already collected from your vendors and property owners, you can easily create and complete the 1099 form. This feature not only saves time but also helps to ensure timely submission to tax authorities. You can review it and file it with the IRS ($19.00 fee per 1099 filed to the IRS).
These are 4 important areas of rental property accounting to streamline so you can power up all other areas of your business.
Need help with accounting software decisions? Call our product pro today: 1.415.800.1245.
More from our Blog: Property Accounting Software | HOA Accounting | Property Management | Accounting Software | Property Accounting Mistakes | Biggest Property Management Mistakes | Management Software | Property Management Cost Management | Top Property Management Mistakes | Property Accounting Mastery | Simplified Accounting | Apartmentalize 2024 | Property Management Technology
