The PropTea Podcast is officially back, and we’re diving head first – behind the books! In this exciting new episode, our host Erica Patterson breaks down everything you need to know about property management accounting. From basic accounting terms to common accounting mistakes to avoid, we’re sharing exclusive tips on how you can balance your books with ease.
What are some basic accounting terms every property manager needs to know?
Erica: “Accounts payable or AP…is what your business currently owes from vendors…Accounts receivable, which is commonly known as AR, is what you’re currently owed for your services. Accrual accounting is a method of accounting where income and expenses are recorded as they happen whether or not money has been exchanged yet…Cash accounting is a method of accounting where income and expenses are recorded only once the money has been exchanged…You have a General Ledger or G/L for short, which is a complete record of all your business transactions…Bank reconciliation is the process of ensuring that the G/L or General Ledger matches the actual statement balance across your accounts for accurate reporting…Chart of accounts is the classification of your transactions as your main reference in property management accounting including assets, equity, expenses, income, and liabilities.”
What’s your biggest no-no in accounting?
Erica: “You might not even think this is actually still a thing, but relying on paper records. It is 2023 people. We need to put the paper down and pick the iPads up. So this one is our biggest no-no of accounting. Believe it or not, businesses are still relying on old-school paper and pencil for accounting, which to me is baffling because I could not for the life of me even think about managing some type of accounting on pen and paper…Digitizing your accounts makes it more efficient, it makes it more secure, and it also makes it more accurate, boosting your company’s value overall and saving you time and money. I don’t see why you wouldn’t go digital.
How can I avoid common accounting mistakes in property management?
Erica: “Luckily we have built a solution…ManageGo Books: the accounting platform built for property managers! With ManageGo Books, you can enjoy a modern interface that will help you digitize your accounting, organize your classifications clearly with a chart of accounts, and…reconcile right from our platform and run automated and memorized reports. Using a property management software, as opposed to general accounting software like QuickBooks will help you streamline your management and processes all in one place.”
For a deeper dive into common property management accounting mistakes, bonus accounting tips, and our monthly wellness tip, listen to the full episode above! And now that we’re back, be sure to tune in every month for a new episode giving the ultimate lowdown on all the latest trends happening now in the real estate industry – from industry leader advice to wellness tips for better work/life balance.
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