Accounting for Property Management Companies is trickier subject for most of the bookkeepers. There are several things that needs to be taken care and one of them is Client Accounting and moving money from Office Accounts to Client Accounts. On top of it, there is compliance with regulatory environments.
Below are 7 Common Mistakes a bookkeeper should avoid
1.Accounting Software- Many companies use standard accounting applications which are used by other businesses. Property Management companies should used specialized Property Management Accounting Application as these caters to several requirements.
2.Automation- There are several expenses incurred by Property Managers and there are small receipts. The best way is to get these automated by using Apps so that key and critical receipts are not missed
3.Receipt Allocation- Receipt Allocation should be done to tenants on daily basis. Many of the Property Managers do not reconcile bank accounts and daily basis which result in tenant accounts are not updated. Further, due to this the Credit Control process is hampered or delayed
4. Moving money from One Property to Another Property- Due to cash deficit, many managers are tempted to move money. This should be completely avoided
5.Tenant Receipts/ Deposits- All tenants should be requested to put their name or reference code when they make payment so that receipts are allocated to correct accounts
6.Service Charge- Many of the property managers keep service charge accounts on hold till last day of the deadline. There should be a KPI that service charges should be filed within 90 days of year end.
7.Rent Payment- Make rent payments easy by using latest facilities provided by several banks
Some of the above measures will help you to ensure all your accounts are accurate and up to date.