Owner Transparency is Key
Property management companies have a lot of responsibilities, among collecting rent, leasing properties, coordinating maintenance departments, and paying vendors. One of the biggest challenges is providing accurate Owner Statements month over month. Keep reading if you’re interested in learning how to remain transparent with your owners, and maintain reliable books!
The Owner Statement
At minimum, fee managers should be sending their owners a monthly statement. However, there are issues that can arise each month that cause the ending balance and actual property cash balance not to match. This difference is generally caused by one of the following:
- Over or under collected additional fees (check your diagnostics Negative and Positive Additional Fee balances sections)
- Prepayments (if you suppress them from the owner’s statement)
- Additional fees paid with a Zero Dollar Receipt. If you aren’t sure what these are, check out our last blog!
- Suppressed fees at move out done incorrectly, which we went over in this blog
You can compare your Owner Statement to a General Ledger or Balance Sheet. If your cash balance is different between the reports, check the items above! Still stuck? We can take a look, just email email@example.com if you are not a current client, or firstname.lastname@example.org if you are!
Be Transparent, B-E Transparent!
Thankfully, most owners are not trained accountants, so typically, they don’t require more than 2-3 additional reports. As a minimum, we recommend that you include a Cash Flow 12-Month or an Income Statement 12-Month in addition to the Owner Statement. It gives your owners a breakdown of the income and expenses each month, it as, after all, their money! The following are good reports to include in an Owner Packet:
- Cash Flow 12-Month: This will give your owner a look at their income, expenses, and any other GL accounts you want to include (assets, liabilities, capital, etc.) and their affect on operating cash.
- Income Statement 12-Month: It gives your owner less information, and they cannot see assets, capital, and liability accounts if you want them to. This is good for owners that care to see the income and expense on their properties.
- Balance Sheet: Generally, this is included with one of the two reports above if you don’t want to add the Other GL account types to the Cash Flow. The Balance Sheet also gives your owner their cash balances (both operating, and security deposit). It’s straight forward and appreciated by a lot of owners!
- Check Register Detail (Enhanced) and Deposit Register: Okay, we know, it’s a ton of detailed information. This is a rare set of reports to include, and is typically only sent to large owners, or owners with accounting backgrounds. It provides a detailed list of every income and expense item seen on the reports above.
Every property management company is different, so take these recommendations lightly. However, including these reports can improve relationships with your owners and they will appreciate the transparency. With trust accounting, you are managing other peoples money, and they are enTRUSTing that you are doing it correctly. Go ahead and show them that their money is save and sound with you!
Take it a Step Further
Do you really want to blow your owners away? Maybe even attract a few new ones? We have just the thing for you! APM Help also offers daily audits via Triple Tied Out. This software looks at property balances, bank reconciliations, and tenant liabilities daily! If you’re clean, you can add a Triple Tied Out badge to your website and dazzle the world with your property management skills. Trust us, you’ll be happy you have it!
If you have any questions on owner statements, additional reports, or Triple Tied Out, please reach out to us! You can either go to our website, send an email to email@example.com or call (281) 949-8755!