Managing rental properties involves a ton of paperwork – leases, rent payments, maintenance invoices, security deposits, and more. Keeping accurate financial records is key for success, but it’s a task that can bury even experienced property managers. Should you do your property management bookkeeping yourself, or is it time to bring outside help?
This decision impacts your bottom line and your sanity. Let’s look into the pros and cons of outsourcing your bookkeeping to determine the smartest path for your property management business.
What Is the Meaning of Property Management Accounting?
Property management accounting goes beyond everyday bookkeeping. It involves tracking income and expenses for multiple properties, often within a multi-entity structure. Tasks include:
- Rent roll management
- Recording security deposits and tracking their disposition
- Paying vendors and contractors, ensuring timely and accurate payments
- Generating detailed owner statements that provide financial transparency
- Tax-time reporting, including 1099 generation
Related Article: What is Property Management Bookkeeping?
Is QuickBooks Good for Landlords?
QuickBooks is a popular tool for property management accounting, and for good reason. It has features like property-specific income/expense tracking, tenant management, and reporting capabilities. QuickBooks can be a viable solution for landlords with a small portfolio and a strong grasp of accounting principles.
However, as your portfolio grows, or if accounting isn’t your forte, QuickBooks can quickly become overwhelming. Using it effectively requires expertise to set up accounts correctly, categorize transactions accurately, and reconcile bank statements. If DIY bookkeeping is causing headaches, leading to errors that could have tax implications, or preventing you from focusing on growth, QuickBooks alone won’t solve the problem. What will help is outsourcing to bookkeepers with QuickBooks experience.
How Do You Keep Books on a Rental Property?
There are a few ways to handle rental property bookkeeping:
- DIY (Do-it-yourself): Manage it yourself using spreadsheets or software like QuickBooks. This option is often the most affordable initially but can become time-consuming and prone to costly errors as your portfolio grows.
- In-house Bookkeeper: Hire a dedicated staff member to handle financials. This ensures in-house control but adds payroll and benefits costs.
- Outsourced Bookkeeping: Partner with a firm like NorthStar to get expert bookkeeping without the in-house cost. Outsource firms specialize in property management accounting, bringing efficiency and accuracy to your financials.
Outsource Your Bookkeeping for Property Management to NorthStar Bookkeeping
If DIY bookkeeping is draining you, causing errors, or holding you back from reaching your full potential, it’s time for a change. Outsourced bookkeepers provide the accurate financials you need to run a profitable property management firm.
“The Northstar Team are consummate professionals. I run several businesses generating multiple revenue streams, and have new single-purpose LLCs forming and dissolving constantly. To say that I have a very challenging and dynamic set of books would be an understatement. Northstar keeps my accounting sane, so that I can easily track my finances and sleep at night. I highly recommend their services to anyone, no matter how simple or complex the accounting.”
- PAUL CRANE, PDC CAPITAL / PACIFIC CALIFORNIA RESIDENTIAL
NorthStar Bookkeeping has comprehensive experience in the property management industry. We take the stress out of accounting, giving you peace of mind and time back for what matters most. Contact us to schedule a consultation to see how we can transform your financial picture.