Managing property accounts means thorough work at the end of the month. Many property managers struggle with the monthly close, which often results in delays in reporting, mismatched balances, or misplaced invoices until the last minute.
Accuracy in financial reporting is not only a process to ensure financial clarity, but it is the foundation upon which sound decisions are made. If you are still pondering how to close books fast for property managers, then you are in the right place.
As the portfolio grows, ensuring all income and expenses are recorded, reconciled, and reported becomes a hassle. The financial data that emerged from the month-end close reflects past financial performance and helps in making future strategies and investments. If the data is inaccurate, then it can lead to financial mismanagement.
So what’s the secret behind mastering the month-end close for property management accounting? A property management month-end checklist can be a game-changer for any property management company. It is built for property management teams that want a faster, cleaner, and well-organized month-end. This ultimate guide can help you achieve accurateness and efficacy.
Step 1: Reconcile Bank Accounts
Compare bank statements with your accounting records. It is an important step to ensure your finances are recorded precisely. Also include operating accounts and trust accounts. Verify each transaction matches the bank statements in accounting software like Rent Manager. Take into account all the deposits, withdrawals, and bank charges. Look for any kind of discrepancies.
Step 2: Reconcile Credit Card or Petty Cash Accounts
If your company has credit cards or petty cash accounts, then it is important to reconcile them as well with bank statements. Investigate every invoice and reconcile the accounts.
Step 3: Review Accounts Receivable
Ensure all the rent payments are entered, check tenant accounts for outstanding balances, and record all the collected payments. It is imperative to set out reminders for overdue payments. Assess uncollectible accounts and create aged receivable reports to avoid any mishapening.
Step 4: Accounts Payable and Accruals
Not only do accounts receivable need a check, but accounts payable also do. Check that all the vendor bills are properly recorded into the accounting system. Confirm if the approvals are in place for payments and also accrue for any expenses that span the month-end. Also, don’t forget to schedule payments for any outstanding invoices before you close the accounts.
Step 5: Journal Entries
Look for any deferred or accrued entries that need to be recognized and make the journal entry as required. Check out amortizing prepaid insurance, recording interest on mortgages, etc., and make an entry in the software.
Step 6: Reviewing General Ledger
Scan for all the entries in the general ledger. Look for all the mis-categorizations or any anomalies. Accurate posting of all the closing entries in the general ledger ensures your financial statements of the organization’s financial position at the end of the month.
Step 7: Closeout and roll forward
Executing the close-out and roll-forward process is vital to maintain any kind of precision and transparency. If you are using software, ensure that you close the period. This way, you can lock the changes. Even though accounting software like QuickBooks is cloud-based, you can ensure regular backups of your data.
Step 8: Generate Financial Reports
Perform audits and generate financial reports. Financial reports related to P&L, balance sheet, cash flow, etc., should be generated. Review the internal controls and procedures for further improvements. This will help in the month-end close process to maintain your data.
Step 9: Communication with stakeholders
Compile all the data and share financial statements with the managers. Ensure that you highlight all the performance indicators, tasks, and development prospects.
Step 10: Conduct a final review
The month-end closing process is important for any real estate firm. Before completing the closing process, perform a final review. This review is generally done by top management. This ensures that the monthly financial statements are error-free. They authenticate all the rent payments, invoices, bills, etc., and they are recorded in accounting software like Rent Manager.
Advantages of a property management accounting checklist
When you have a property management month-end checklist, you can ensure that all communications are recorded appropriately. When the processes are structured, finance teams can gain clarity.
Updated monthly closing: A clear sequence of tasks eradicates any kind of delays.
Fewer errors: With consistent reconciliation and review, you can look for errors before they compound and enhance accounting accuracy.
Improved month-end close for property management: With standardization comes compliance regulation.
Quicker accounting monthly close process: This way, teams can close the books swiftly and work on their core tasks.
Constant process augmentation: When you have checklists, you can disclose any shortfalls.
Better financial decision-making: When you have timely and reliable data, it can help a business grow.
Conclusion
The month-end close is not only a financial ritual, but it is also the cornerstone of making business decisions. From reconciling bank accounts to conducting final review, you can find actionable insights which can help you close your accounts in the right manner. To manage things in a better way, you can download the ultimate month-end close checklist template. This tool can guide you through every step. After embracing the top practices and using the template, your balance sheets will be accurate. We automate the month-end close property management, making the whole process easier for you.
If you feel overwhelmed with all these tasks or your in-house team still dreads the last few days of every month, then leave such tasks for the professionals. A firm like Outsourced Bookkeeping can handle all the tasks efficiently. The experts offer you a seamless, well-organized, and precise month-end close process. We help businesses achieve a zero-day financial close. This way you can focus on real estate more than accounting.
