How do you reconcile property management accounts?

1 Prepare your documents

The first step is to gather all the documents you need to reconcile your accounts, such as bank statements, receipts, invoices, rent rolls, and ledgers. You should also have access to your property management software or accounting system, where you can enter and track transactions. Make sure you have the documents for the period you want to reconcile, usually a month or a quarter.

2 Review your transactions

The next step is to review your transactions and make sure they are recorded correctly in your system. You should check for any missing, duplicate, or incorrect entries, such as rent payments, deposits, refunds, fees, expenses, and transfers. You should also verify that the dates, amounts, and categories match with your bank statements. If you find any errors, you should correct them as soon as possible.

3 Compare your balances

The third step is to compare your balances and see if they match with your bank statements. You should look at the opening and closing balances of each account, as well as the total income and expenses. If there is a difference, you should find out the reason and adjust your records accordingly. Some common causes of differences are bank fees, interest, deposits in transit, outstanding checks, and reconciliation errors.

4 Reconcile your accounts

The fourth step is to reconcile your accounts and confirm that they are accurate and complete. You can use a reconciliation worksheet or template to help you with this process. You should start with the bank balance and add or subtract any adjustments to get the adjusted bank balance. Then, you should start with the book balance and add or subtract any adjustments to get the adjusted book balance. The two balances should be equal.

5 Generate your reports

The fifth step is to generate your reports and review them for any issues or anomalies. You should produce a reconciliation report that shows the details of your reconciliation process, such as the balances, adjustments, and discrepancies. You should also produce a financial report that shows the income and expenses of each property, as well as the cash flow and profitability. You should analyze these reports and look for any trends, patterns, or opportunities for improvement.

6 Archive your records

The final step is to archive your records and store them securely. You should keep your documents, reports, and worksheets for at least seven years, or longer if required by law or regulations. You should also backup your data and protect it from unauthorized access or loss. You should follow the best practices for document management and retention, such as labeling, organizing, and shredding.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?