As your property management business grows, you work to grow your workforce and your practices with it. Solid property management accounting practices are one of the keys to your business success. When you're running a business that focuses on managing single family home rentals, how can you keep on top of your accounting and ensure that your employees and tenants remain on top of their budgets and payments?
According to Forbes, business owners often have the ability to collect more cash each year, but many don't realize it because they don't look at their financial statements. Staying on top of property management accounting helps ensure that you are receiving payments due. This keeps your business moving in the right direction and the cash flowing.
Here are our top five recommendations for improving your property management accounting practices:
1. Encourage Tenants to Pay Online
Creating an online portal for your tenants is one of the best things that you can do to simplify payments for your business. Through an online tenant portal, tenants can apply, communicate, and log maintenance requests. They can also pay their damage deposit and monthly rent. Tenants will be able to see if they're behind and when their lease is coming up, so that they'll be prepared to manage their finances appropriately.
2. Create Automatic Tracking and Reminders
Automating the renewal process and accepting online payments can make it easier to set automatic tracking and reminders for yourself and your tenants. An online payment system allows you to easily track who's completed their rental payment for the month, who's behind, and who's had chronic troubles in the past. It can not only help you track interactions with tenants, it can also assist you in recovering late or missing rent by sending automatic reminders if the rent is overdue. An article by The Houston Chronicle states that automating routine bill payments, minimizing the need to physically visit the bank and the ability to work as needed rather than on banking hours may decrease the time involved in performing routine banking activities. This saves you time and improves your business's bottom line.
3. Simplify Your Payment Processes
Your business isn't just about receiving revenue: you also need to pay the bills. More importantly, you need a strong process to track bills, store information, and ensure that those bills are paid. Look for software that will allow you to store digital and scanned documents in the same location. Set reminders to pay or check recurring bills. The owners you work with also want to know what's happening with their property's maintenance and finance, and products such as Propertyware's accounting software can help by automatically generating owner statements that are available online 24 hours a day, 7 days a week.
4. Merge Your Tools
What do Quickbooks, property management software, and your bank account have in common? They're all tools that you use to manage your money and your tenants, but they may not talk to each other. Look for property management accounting software that facilitates easy communication between the different financial management and data management tools that you use in your business. That way, you can see updated banking information alongside your financial projections and your data about tenants' overdue payments.
5. Report, Report, Report
When you're managing your money, you need the tools that will allow you to see where you've been, where you are now, and where you're going in the future. Look for property management accounting software that will enable you to create custom reports so that you understand each aspect of your financial past, present, and future. For example, you might need information on turnover rates and how these impact your bottom line, or you might require information about ongoing maintenance costs at several properties. You may be missing money that you could reinvest into your business. Your reports can help you see the big picture and all of its smaller pieces so that you can make wiser business decisions.
Are you trying to improve your property management accounting practices? With Propertyware, you'll be able to track invoices and payments more thoroughly. Sign up for a free trial today.