Common Bookkeeping Mistakes Property Managers Make
(and How to Fix Them)
Your guide to cleaner books, smoother audits, and stronger owner relationships.
SECTION 1:
Trust Accounting Mistakes
Warning Sign #1
Not reconciling trust accounts monthly
Why it matters
This puts you at risk of trust fund violations.
How to fix it
Use three-way reconciliation monthly: bank balance = trust ledger= trial balance.
Warning Sign #2
Mixing property and company funds
Why it matters
It's a major compliance red flag.
How to fix it
Maintain separate accounts for trust, operating, and security deposits.
Warning Sign #3
Unrecorded or misapplied deposits
Why it matters
Leads to cash shortages and tenant disputes.
How to fix it
Apply all deposits to the correct property and lease. Set up recurring checks in your software.
SECTION 2:
Owner & Tenant Ledger Errors
Warning Sign #4
Incorrect owner opening balances
Why it matters
Owners won’t trust your statements.
How to fix it
Perform a ledger audit. Use a reconciliation report to verify balances.
Warning Sign #5
Posting rent manually instead of automating
Why it matters
Manual entry leads to missing rent and errors.
How to fix it
Set up recurring charges and automate rent postings through your property management software.
SECTION 3:
Vendor & 1099 Pitfalls
Warning Sign #6
Missing W-9s before issuing payments
Why it matters
Leads to incorrect or delayed 1099s.
How to fix it
Require W-9 submission before any vendor is paid. Flag missing forms monthly.
Warning Sign #7
Vendor payments coded to the wrong property
Why it matters
Your financials (and tax filings) will be inaccurate.
How to fix it
Train staff on property-specific coding and double-check high-dollar invoices.
SECTION 4:
Month-End Close Issues
Warning Sign #8
Skipping monthly bank reconciliations
Why it matters
Hides errors, missing income, or misapplied funds.
How to fix it
Block time each month to reconcile every account, especially trust.
Warning Sign #9
No formal month-end close process
Why it matters
Books stay open and messy.
How to fix it
Use a checklist and assign roles. (Bonus: download our template on page 07).
SECTION 5:
Owner & Tenant Ledger Errors
Warning Sign #10
Overpaying owners
Why it matters
Creates trust and cash flow issues.
How to fix it
Review balances and unpaid bills before distributions.
Warning Sign #11
Mislabeling income as liability (or vice versa)
Why it matters
Skews your reports and affects compliance.
How to fix it
Audit your chart of accounts quarterly and train your team on correct coding.
Bonus
How to Fix the Big Picture
Still feel like your books are messy?
Here’s how to clean them up
Here’s how to clean them up
1.
Audit your current books
Trust, ledgers, and trial balances.
2.
Document your workflows
Especially for rent, bills, and bank recs.
3.
Fix structural issues
Chart of accounts, class tracking, etc.
4.
Close your books monthly
And stick to the process.
5.
Call in the pros when needed
Outsourcing cleanup and catch-up can save you time and headaches.
30-MiN Free Consultation
Get Expert Help
Need help fixing any of these?
APM Help is the #1 bookkeeping partner for property managers. We specialize in AppFolio, Buildium, Rent Manager, and more. Whether you need a quick fix, a full cleanup, or ongoing support—we’ve got your back.
Let’s get your books clean and compliant—fast.
info@apmhelp.com
+1 (281) 949-8755
Mon - Fri 8:00 a.m. - 6:00 p.m.
Sat & Sun - Closed
Sat & Sun - Closed
