Simple Ways to Manage the Accounting of Rental Property

Posted by William John on November 5th, 2019

Staying in control of company finances is mission critical. Knowing how much money is being spent across all departments and suppliers is vital. To manage the rental property, we have to know about the basis so that we can easily work on it and get the best result later. With the management accounting assignment writing help, we are trying to guide the students so that they can easily get the best score at the end of the academic session.

Follow best and quality methods to get the positive result in future

The first step is to accurate monthly reporting and up-to-date expense tracking that is accessible to key stakeholders. This ensures transparency and that everyone is on the same page. Use your maintenance portal to keep a qualified list of all approved vendors. This prevents unauthorized vendors and helps you to negotiate the best terms and capture the most discounts. Also, enable three-way matching, by using your maintenance portal to generate purchase orders straight from work orders. No more guessing what deliveries were for what jobs – it’s fully transparent, efficient and organized. And, you can then match the vendor’s invoice to the purchase order to ensure that the quantities and work of the materials are the same on both. Paper and people-based processes lead to higher AR/ AP costs and missed business opportunities.

Discount capture means that you can take advantage of the standard discount terms of “2% 10, net 30,” to reduce your costs and suppliers can speed up their cash flow cycles. By keeping a list of approved third-party vendors, and automating as much of the AP cycle as possible, you can shrink AP cycle time, an important measure of efficiency.

The property management business tends to have more revenue ebb and flow due to vacancies, late payments and surprise maintenance costs. And especially for smaller property management firms this can present cash flow problems. For example, if you only manage 20 property units, and four are empty, you may have 20% less cash rolling in every month. Toss in a late payment or two, and a repair, and suddenly, there’s less cash on hand to cover expenses. In addition to the obvious savings account or line of credit waiting to help smooth over these bad times, the best way to anticipate problems is to plan for them. Picture a few worst-case situations and crunch the numbers for those scenarios.

Digital documents instantly eliminate a vast amount of paper documentation, which both cuts down on the associated costs and hassles of physical paper printing, storage and filing. It also saves time by reducing the time to find and retrieve documents, and ensures documents are never lost. But digitalizing your documentation and storing it online isn’t just a productivity boost, it’s also a security measure. And, it keeps all financial records, owner records, vendor data and tenant data safe and accessible. It makes sure that in case of any business interruption or emergency, your files are safe. It prevents unauthorized access and limits any potential fraud. 

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