Life Cycle of a Property Manager
The life cycle of a Property Manager can start slow or it may start with a whirlwind of activity where everything is on a horizontal list of priorities. Accounting is recognized as needed but as in any industry, administrative tasks can typically fall to the end of that list. You’ll notice by the above image that bookkeeping isn’t even identified.
Even though bookkeeping isn’t identified in our lifecycle image a Property Manager that is starting a new property management business might start with something like Quickbooks for his accounting needs, using the desktop or online version. As his business grows to something like 20 units it is decided a more robust system is required and to onboard with a Property Management cloud-based software such as AppFolio, Propertyware, or Buildium to name a few of the top property management software offerings while still maintaining QuickBooks for his corporate bookkeeping needs. Having no experience with Property Trust Accounting, he does not reconcile any accounts and has various negative balances on the Trust Account Balance Report and multiple FDR issues.
The Property Manager then hires a bookkeeper that may not understand Property Management Trust accounting and/or the property management software thus spending hours trying to resolve the issues often creating adjustment entries with a journal entry to balance out the properties. Does this sound vaguely familiar?
This does not resolve the issue so the Property Manager hires a knowledgeable bookkeeping service such as APM Help & Bookkeeping and all bank accounts are reconciled and Triple Tied Out, negative trust account balances are resolved, and Financial Diagnostic issues are cleaned up. Books are clean and would pass an audit; the Property Manager gets to a point where he can scale his business, not to mention to be able to sleep at night.