Property management accounting is niche and complicated, with large, fluctuating portfolios of details to track and numbers to crunch. The secret to procuring the best accounting services for property management is a double-whammy of specialized software and property management accounting best practices expertise. Why? We’re glad you asked…
Because Special Situations Call For Special Software
The dynamic nature of property management bookkeeping demands specialized accounting software. With that said, it’s risky to consider just any accounting software, “property management accounting software,” just like it’s risky to consider just any raw fish “sushi.”
There’s a wide range of options differing in quality, functionality, and value. Even among the select tech optimized for property management accounting, the solutions aren’t one-size-fits-all, so what works for one property management operation won’t work for another. It’s a daunting task to find the right fit, and without online rental property accounting expertise, many property managers choose software that costs more in the long run.
Specialized real estate accounting solutions like Buildium and Appfolio have integrations and functions for property management bookkeeping that track payments, manage accounts payable, and reconcile automatically. General accounting software like Xero and Quickbooks address a broad range of needs but lack features essential to property management accounting like document tracking, tenant ledgers, rent rolls, and industry-specific reporting. Ultimately, you need property management accounting services that also understand property management bookkeeping software.
Even with the most basic functionality, online rental property accounting software can have a steep learning curve, taking months or even years to master—part of the reason it’s so difficult to find qualified real estate accounting staff. The best software paired with inadequate expertise is akin to driving a Maserati on a learner’s permit: inefficient, wasteful, and costly. Without the proper knowledge, even the most comprehensive, powerful software provides sub-par data, reports, and controls, leaving inexperienced accounting staff working long hours to untangle inaccuracies and tackle ad hoc crises.
The bottom line here: Finding an expert in the system you’re using is like finding a unicorn, and finding an expert in numerous systems is like finding a unicorn that can do bank reconciliations and triple-tie outs.
Because Normal Accountants Lack Expertise, and Expert Accountants Are Rare
Real estate accounting is essential for property managers, owners, developers, and investors alike, but the skills and know-how for efficient, accurate property management bookkeeping are sorely lacking. Traditional accountants have the numbers knowledge but might be less familiar with the ins and outs of property management accounting software. It may seem counterintuitive, but like cheap tattoos and cheap surgery: cheap property management accounting services are probably not a great idea. We’ve seen it many, many times.
Making the correct choice requires an in-depth understanding of your organizational structure, the savvy to select software for your specific needs (i.e., robust, responsive, and scalable), and the expertise to optimize your operations. Going it alone is time-consuming and inefficient, and your neighbor’s niece, Nancy, who just passed the CPA exam, is more of a hindrance unless she understands how to optimize accounting software to meet your organization’s needs. Performing bank reconciliations for a business is a significantly different endeavor than considering the multiple bank accounts and particular ownership reporting requirements for 2,000+ doors.
Property management accountants should be well-versed in GAAP, sure, but they also need to know RUBs (Ratio Utility Billing), double-entry, triple-tie-out reconciliation, rent collection, maintenance work orders, Gross Potential Rent (GPR), payroll, vendor invoicing, check generation, expense tracking, paperless reporting, tenant screening, leasing, and vacancy marketing at the very least. To be truly effective, the best accounting services for property management also need a comprehensive understanding of the tech solutions to address your unique needs.
According to the National Association of State Boards of Accounting (NASBA), there are just under 700,000 accountants in the US, and of that, only about 80-90,000 have expertise in property management bookkeeping. We know because we’ve invested countless hours finding and training an elite cadre of genius number nerds fluent in property management accounting best practices and numerous accounting software solutions.
Because Keeping Up with Industry Changes is its Own Full-Time Job
New trends, laws, and tech disrupt the property management industry every year. Staying on top of and adapting to these changes is crucial to the health of your business. The right property management accounting services can keep you compliant and in control. An ideal accounting for property management company has top-tier accounting expertise, world-class tech-savvy, and a commitment to continuous growth and education. Know anyone like that? We do. *hint, hint*
Property managers during the pandemic adjusted not only to new health and safety protocols but economic fallout that made it exceedingly difficult for many tenants to pay rent. With the rise of virtual showings, online payments, and applications during the pandemic, property managers pivoted to new ways of operating in a crisis.
The new wave of tech tools for property management is just the tip of the iceberg. As new solutions emerge and as concerns about the future of the pandemic and the global economy remain, property managers who have the support of quality, experienced service providers are meeting the challenge to enhance the rental experience.
The years ahead promise a host of new laws, maturing technology, developing integrations, and accommodations for renters with the flexibility to live and work anywhere. It’s a big ask for property managers to stay on top of that while adjusting their business models to digital-forward operations. An experienced accounting for property management company can smooth the bumps along the way so property managers can find ways to sustain relationships with residents in a world with fewer face-to-face interactions.
Because You Want to Grow
For property managers who want to scale sustainably, efficient accounting is a must rather than a nice-to-have. The proper solutions are out there, and they’re not elusive. If you’re growing rapidly or plan to, you’ll need accounting tech along with a team of specialists that can scale alongside operations and reduce the demands on staff rushing to make accounting deadlines.
The rapid pace of industry change and clients’ immediate needs make it crucial for expanding property managers to stay on top or ahead of trends and forecasts. When choosing an accounting solution, look for someone not only who knows the tech and the industry but who continues to learn and grow. As capable and brilliant as she is, your neighbor’s niece Nancy, the newly minted CPA, has a finite number of doors she can handle, so if she falls behind, so do you—her costly mistakes cost you.
If you lack the right online rental property accounting software or expertise, it may be time to outsource accounting. The market’s best property management accounting software is only as valuable as the right property management accounting skill. When accounting tasks like regular bank reconciliations or reporting are deprioritized or inconsistent, it might be time to consider outside accounting services or at least reconsider your accounting software. We can help with both.