What financial reports should you provide for property management fees?

Income statement Statement of Financial position General Notes Budget comparison Cash Flow statement Revenue & Collection unit wise Report

An income statement isn't just numbers; it's the heartbeat of property management. It's a report that unveils the financial story, painting a vivid picture of revenues and expenses over a defined period. From rent and other income sources to the costs of maintenance, utilities, taxes, and insurance, it's the ledger of a property's financial journey. It's the spotlight on the stage, showcasing net income or loss, the verdict on profitability. An income statement isn't just a financial roadmap; it's a tool for fine-tuning property performance. It's a compass for identifying opportunities for improvement and cost reduction, like a well-conducted symphony of efficiency.

Provide clients with; -P&L Statement: Revenue, expenses, net income or loss -Balance Sheet: Assets, liabilities, equity, property management fees receivable, payable, prepaid fees -Rent Roll: tenants, units, rent payments, total rent collected, late fees -Accounts Payable: Outstanding bills, payments, property management expenses -General Notes: Detailed financial transactions, including property management fees -Property Management Budget: Actual expenses VS budget -Property Performance: Performance VS similar properties -Investment Analysis: Cash flow, ROI, net worth It helps your clients understand & manage their property fees more effectively, and shows them that you are transparent & accountable. They will appreciate your work.

This statement is a critical document for the asset, as it allows for the valuation report to be created based on the net operating income (NOI). This in turn facilitates the determination of the asset’s current market value. Essentially, the price of the commercial asset is derived by multiplying the NOI with a market multiplier. VALUE = NOI x MULTIPLIER (100/yield)

Financial statments .... we provide each property financial statements such as cashflow , balance sheet, rent monthly bills , expenses and revenues, general ledger , forecasting financial statement specifically for business plots , income statement , collecting checks statement , payment statement for each client and follow up

The Balance Sheet is issued during comprehensive accounting, a practice uncommon in most Property Management (PM) firms. Typically, PM entities do not engage in such thorough accounting procedures.

A balance sheet, also known as a statement of financial position, is a report that shows the assets, liabilities, and equity of a property at a specific point in time, It shows how much the property is worth, how much it owes, and how much it has invested. Assets are the resources that the property owns or controls, such as cash, accounts receivable, inventory, and fixed assets. A balance sheet is useful for measuring the financial health and stability of a property and evaluating its liquidity, solvency, and leverage. It also helps you monitor and report the changes in the property's value and equity over time.

The necessity of a cash flow statement lies in its ability to reveal the actual reserve amount, making it an essential indicator of available funds.

Budget reports are generally not integral to property management tasks, unless it involves comprehensive accounting and landlords are willing to pay extra for this specific service.

A monthly essential, the owner's statement demands meticulous review by either the Property Manager or Account Manager before dispatching.

Operating a commercial property involves various costs, which can be categorized into operational expenses (OPEX) and capital expenditures (CAPEX). Typically, OPEX is covered by the property’s tenants through a service charge model, whereas CAPEX comprises costs that are not covered. Therefore, accurate CAPEX reporting is crucial for property managers, and consequently for owners, as it has a direct impact on the property’s financial performance.

When managing property, transparency with financial reporting is essential. You should provide detailed income statements, including all rental income and expenses like property management fees, maintenance costs, and any other operational expenses. Also, a balance sheet, a budget comparison report, and a general ledger detailing the transactions related to property management are key for a clear financial overview. These documents ensure that both property owners and managers have a clear understanding of the financial performance and obligations of the property.

Make sure you can explain the financial statements. Your clients don’t always understand how to read them. It will separate you from the rest.

It is imperative to grasp the statement's content thoroughly before presenting it to owners. Ensuring the ability to explain specific transactions is essential when addressing their inquiries. Typically, the accounting department finalizes the month, restricting alterations to designated individuals.