The National Association of Residential Property Managers has recently released a new National Accounting Standardization that includes a detailed Chart of Accounts, a Financial Controls Guide, and a Metrics Guide. These documents are not currently available publically, but if you are a member, you do have access to these resources. If you are not a member, it might be a good idea to join so that you can have access to the source documents.
I like that an Accounting Standardization involves the key of what I call “Internal Controls”. Many of us are afraid to say the “A” word out loud but an Audit or more gentle way of saying it… a company trust accounts review is inevitable for some businesses. This is especially true for the Property Management industry. Too many times, as a Property Management Trust Accounting professional, I hear stories of Escrow funds being mismanaged, bank accounts haven’t been reconciled let alone reconciled according to state compliance requirement, and property trust balances are in the negative.
A Property Manager, typically a broker, must practice reasonable supervision of their business operations. To be fair to the Property Manager, they most likely didn’t get into business to be a bookkeeper or an accounting professional and they surely had no idea what was in store for them with trust accounting software such as Appfolio. However, it is crucial “to keep a finger on the financial pulse of your business.” While this is not the typical property manager’s forte, there are resources available to practice reasonable supervision of your Property Management Company.
Those resources can be found in an accounting professional such as Ala Carte Bookkeeping & Business Solutions. There are also other accounting solutions that are very good and maybe even more practical for the larger property management companies. I’m always happy to offer a free consultation and to discuss all reasonable solutions to clean up company books, to learn new software, to understand reports and track money, and to resolve errors of over-collecting of revenue typically caused as a result of additional fees. These are just a small example of pain points that property managers experience on a daily basis.
I like that an Accounting Standardization involves the key of what I call “Internal Controls”. Many of us are afraid to say the “A” word out loud but an Audit or more gentle way of saying it… a company trust accounts review is inevitable for some businesses. This is especially true for the Property Management industry. Too many times, as a Property Management Trust Accounting professional, I hear stories of Escrow funds being mismanaged, bank accounts haven’t been reconciled let alone reconciled according to state compliance requirement, and property trust balances are in the negative.
A Property Manager, typically a broker, must practice reasonable supervision of their business operations. To be fair to the Property Manager, they most likely didn’t get into business to be a bookkeeper or an accounting professional and they surely had no idea what was in store for them with trust accounting software such as Appfolio. However, it is crucial “to keep a finger on the financial pulse of your business.” While this is not the typical property manager’s forte, there are resources available to practice reasonable supervision of your Property Management Company.
Those resources can be found in an accounting professional such as Ala Carte Bookkeeping & Business Solutions. There are also other accounting solutions that are very good and maybe even more practical for the larger property management companies. I’m always happy to offer a free consultation and to discuss all reasonable solutions to clean up company books, to learn new software, to understand reports and track money, and to resolve errors of over-collecting of revenue typically caused as a result of additional fees. These are just a small example of pain points that property managers experience on a daily basis.
