Good property management accounting software can be a powerful tool in the success of your property management business. In fact, with the days of ledger and spreadsheet accounting fast fading, it’s virtually impossible to run a growing portfolio without it. General accounting software simply won’t cut it (more on why, here).
Chart of Accounts
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For one, spreadsheets don’t scale. The more properties and transactions you manage, the more time it will take to keep your accounting system updated and accurate. With so many other tasks on your team’s plate every day, this opens the door to human error.
There’s also the matter of reviewing and sharing your data after you’ve entered it. Without the specialized templates, reports, and dashboards of specialized property management accounting software, you can easily sink even more time and precious team resources into finding the details you’re looking for. That’s why industry-specific tools are usually worth the investment.
But not all property management accounting software programs are created equal. While not every solution will fit your specific business needs, there are certain features that you should look for in a quality property accounting software solution. If the property management software you’re considering doesn’t include at least some of the following features, you may want to think about moving on.
So what should you be looking for in property accounting software?
Here are six must-have features you should have in your property management accounting software.
#1: Automatic Bank Reconciliation
Bank reconciliation is usually a time-consuming, manual process that can often be error-prone. Be sure that each check and deposit is recorded accurately and reduce the chances of clerical errors by choosing a property management accounting software with automatic bank reconciliation. Automating this otherwise burdensome task will let you focus on other tasks and ensure your books are correct.
Use it to produce balance sheets, as well as cash-flow and income statements, automatically and in real time. You’ll be prompted with suggestion on how to match up data and will even be notified in the rare event that a match cannot be found. You can solve major headaches with this feature—don’t overlook it!
#2: General Ledger Accounting
Track your company financials with the same accuracy and efficiency that governs all other parts of your business.
A well-rounded platform should make it easy to access your data securely. That includes features that let you set up and customize a chart of accounts that reflects the way your company does business. Fully integrating that capability within your software makes it easy to access, update, and share your chart of accounts data in a way that’s simple for you to track and contributes to your bottom line.
You don’t want to have to juggle multiple financial and accounting programs, so be sure to look for software that keeps your business records and property books separate and secure, while still benefiting from a unified interface. That way, you’ll have a full view of the money you have and money you’re about to receive or pay out.
#3: Locking Your Books
Speaking of security and peace of mind, another must-have feature is the ability to lock your books once you’re ready to file. This ensures that users aren’t able to make unwanted or accidental changes and helps ensure your financial reports remain accurate. The right tools can make it easy to lock your books and avoid any costly errors in the process.
Once you’ve locked in your books, you can have greater peace of mind that every member of your team is looking at the same data and, in the case of an audit, you’ll have a transparent record of all financial transactions up to the point of locking.
#4: Online Rent Payments
Reduce the need to chase down residents month after month. Choose a property management accounting software solution that gives residents a wide variety of online and automatic rent payment options, from EFT and bank transfers to credit card payments and other options such as Pay-Near-Me at local retailers.
Giving residents the option to set up automatic payments is also a win-win that makes managing recurring charges easier for both them and your business. When fully integrated with your accounting software, online payments make it easier and less time-consuming to record and track transactions, freeing up you and your employees to focus on other priorities. You won’t have to jump between different records to track payments, reducing the risk of human error in the process.
An effective payment portal also makes it easy to record and view payments from residents and association homeowners. This feature is especially useful for identifying consistent missed payments from a resident or other trends that could act as red flags. You’ll be able to reference this consistent digital record when reaching out a tenant about any delinquencies or while simply monitoring the health of your business. Bonus points if the accounting software you choose lets you accept rental applications and application fees online.
#5: 1099 eFiling
Tax season and 1099 deadlines can be a huge hassle for property managers, so save yourself the pain and be sure to choose property management accounting software that will automatically and easily batch 1099 e-filing with the IRS, print and mail forms to owners and vendors, and record and track it all.
Look for tools that are accessible well ahead of the time filing officially opens with the IRS, so you can start the process early and at your own pace. Having a go-to 1099 eFiling system gives you more time to ensure the accuracy of your books and catch errors well ahead of IRS deadlines—and that’s not even mentioning the reduced costs and staff time when compared to traditional filing.
#6: Accounts Payable
How amazing would it be if your contractors and vendors could bill you electronically, you could verify the ticket was complete and then you could use a built-in calculator to figure out what you owe your vendor or yourself and then pay it—all in one place?
Yeah, you can do that. A great property management accounting software will convert work orders into bills, then pay them online. being able to quickly and consistently settle work order invoices this way can strengthen your relationship with vendors and potentially result in faster service and better rates.
Compare Property Management Accounting Software for Yourself
Now that you know what to look for, take a look at our in-depth reviews of the best software out there to help you simplify and get the most out of property management accounting:
- Is QuickBooks the Right Fit for Property Managers?
- 10 Best Property Management Accounting Software Solutions
In your search, be sure to note how well different features integrate with each other and with the rest of your property management software. You’ll want a solution that lets you seamlessly manage your books, alongside every invoice and payment. Keep in mind any additional charges and service fees that some software providers put on their services to ensure that you’re not face with unexpected costs.
Customizable fields and reports can also help you to more effectively track the health of each lease and account for all the transactions and fees that are specific to your business.
Finally, when managing all your account processes in one place, it’s vital that your data stays secure and that you can control access and visibility into your accounts. Remember that the software you choose will contain not just your own sensitive business data, but also your clients’.
Buildium has all of the property management accounting software features we discussed above and an award-winning customer service team to help you get started quickly. Be sure to check out the how-to videos in our Accounting section, our Property Management Accounting Survival Guide for Non-Accountants, as well as bookkeeping basics for property managers to learn more! Happy accounting!Read more on Accounting & Taxes