There are charges to raise, receipts to reconcile and statements to produce for tenants, property owners and contractors. And then there are payments to those tenants, owners and contractors too. And these financial transactions can relate to properties, or units within those properties so reporting gets another layer of complexity.

Manually tracking finances for a portfolio of properties is highly time consuming as we’re sure you know and your clients may well complain about! So a typical response is to think about how to automate as much of this admin as possible. Automating often improves accuracy too, so if you can recommend better workflows and software to manage admin tasks, your accounting and reports will be more accurate and up to date too.

Just the tenancy journey alone can have 60 or more touchpoints that involve accounting (we have a detailed infographic on this for the curious!).

Here’s a few highlights…

• Finding new tenants can involve promotional advertising expenses, subscriptions to portals, and sometimes application fees to process
• New Tenants create more accounting admin – including rent deposits, and a deposit statement. You’ll need to set up opening balances on their rental account, and attribute that income to the property owner.
• Current tenants need recurring rental charges, receipts and statements. And there will also be remittances to the property owners and any contractors undertaking maintenance work.
• When Tenancies expire you’ll need to produce an end of tenancy statement
• Ending a Tenancy will mean managing the admin of full or part refunds on deposits held and possibly some maintenance work…
• And for past tenants who may need references in the future or request copies of their statements you need to make sure those are easy to produce

And so on…

When you’re asked to compile accounts we expect most of your property clients are giving you information from more than one source… there may be a selection of spreadsheets, print outs, notes, reports and statements from different places.

If you have Property clients you know could manage and track all their financial data better, here’s a checklist to work from so that everything is covered every day, week, month and quarter to keep it up to date.

Daily Checklist

• Account for charges for any maintenance work and bill contractors quickly to keep records up to date (ideally daily but weekly at least)
• Be alerted and respond quickly to rent underpayments and overpayments
• Refund all/part of any deposit payments to tenants quickly and provide statements
• Check when rent is due and set up and send reminders
• Arrange viewings and communicate these with existing tenants

Weekly Checklist

• Reconcile transactions (charges and receipts) on accounting software to keep up to date with cash flow (ideally daily but weekly at least)
• Reconcile accounts with all associate expense payments often (monthly at least, ideally weekly or daily for a big portfolio)
• Track and record deposit payments and refunds (Ideally daily but weekly at least)
• Make payments to Contractors for maintenance work.

Monthly Checklist

• Ensure rent payments and bank statements are reconciled to match account balances
• Enter monthly rent charges and send clients rent reminders
• Account for any changes in rent charges
• Calculate management fees percentages and subtract from gross as they are charged (Monthly but depends on agreed frequency of rent payments)
• Generate reports to ensure no rent is outstanding/overdue
• Generate P&L on accounting software to measure the financial position of the business

Here’s how to recommend your clients choose property management software

Start with systems.

Look at what happens day to day, week to week, month to month and how it’s being done now. Do an audit of the way they are working and what software (or not) they are using.

Make notes on where admin ends up and if it’s repeated in different places.

Look out for where errors could happen, manual entry for example into spreadsheets can allow for mistakes.

Map out clear workflows with them, and make a note where the financial data is handled.

Think about what could be automated  – use the admin checklist if you want a good place to start. And here’s some more ideas of what you can expect to  be able to automate with property management software:

• Tracking rent payments
• Handling maintenance requests
• Sending automatic rent reminders
• Reconciling payments received
• Automatic reminders for certificates expiring
• Signing contracts online for new tenants
• Setting recurring rent charges
• Auto-generating management fees
• Remitting batch payments to property owners and contractors
• Automated messages and tasks with embedded checklists so nothing is missed
• Synchronisation of financial information with accounting software
• Automatic actions on a to-do list or calendar
• Reminders for required checks and certificates

Like all clients, your Property clients value and want proactive advice on their expected cash flow, tax and business performance. If you’re able to also add value by recommending business software that simultaneously reduces your admin headaches along with their own, you’re heading into win win territory. Don’t be afraid to help those admin heavy clients map out a better way of working, to allow you to offer a better service at the same time.

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