What is a Property Management Chart of Accounts in Bookkeeping?

Successful property management hinges on accurate financial tracking. A well-structured chart of accounts is the foundation of this accuracy. However, navigating the complexities of bookkeeping can be overwhelming for busy property managers.

Think of a chart of accounts as a comprehensive map of your property management finances. It systematically organizes every income and expense category, ensuring streamlined financial reporting and clarity for key business decisions.

At NorthStar Bookkeeping, we specialize in setting up and managing property management charts of accounts. Keep reading to learn the fundamentals and how a customized chart of accounts can transform your operations.

What Is a Property Management Chart of Accounts?

A chart of accounts in property management bookkeeping is a categorized listing of all account titles and numbers being used by a firm to track financial transactions. This organizational tool separates expenditures, revenues, assets, and liabilities, clearly showing financial activity by category.

What Is in a Property Management Chart of Accounts?

A chart of accounts is a detailed list of all the categories you use to classify your business’s income and expenses. A well-designed rental property or property management chart of accounts will include categories such as:

• Income
  • Rent
  • Late fees
  • Pet fees
  • Application fees
  • Other income (e.g., laundry, parking)
• Expenses
  • Operating Expenses:
    • Property taxes
    • Insurance
    • Utilities (if paid by landlord)
    • Maintenance and repairs
    • Landscaping
    • Pest control
    • Property management fees
    • Advertising/marketing
    • Legal and professional fees
  • Capital Expenses:
    • Improvements (e.g., renovations)
    • New appliances
    • Roof replacement
• Assets
  • Property (land and buildings)
  • Cash and bank accounts
  • Accounts receivable (rent owed)
  • Prepaid expenses (e.g., insurance)
• Liabilities
  • Mortgage payable
  • Accounts payable (expenses owed)
  • Security deposits
• Equity
  • Owner’s equity

Related Article: What is Property Management Accounting?

Rental Property Chart of Accounts vs Property Management Chart of Accounts

A rental property chart of accounts focuses on the income, expenses, assets, liabilities, and equity of a single property while a property management chart of accounts tracks the overall finances of your property management business. This detailed tracking allows you to analyze the profitability and performance of each individual rental, essential for making informed management decisions.

Both will have common categories, but a rental property chart of accounts will give you a more granular look. This allows you see with more clarity at where your rental property income and expenses are coming from. Helping you make more educated business decisions.

Can I Set Up a Chart of Accounts for Rental Properties in QuickBooks?

Yes, QuickBooks allows property management firms to set up a customized chart of accounts for rental properties, facilitating detailed tracking of all financial transactions. This software is particularly adept at handling the multifaceted nature of property management finances, from tenant rent payments to property maintenance costs. 

With NorthStar Bookkeeping’s expertise in QuickBooks, property managers can maximize the software’s benefits, ensuring an organized, accurate, and accessible financial reporting system that aligns with industry best practices.

Who Sets Up a Chart of Accounts?

While you can attempt to set up your chart of accounts, there are significant benefits to enlisting the expertise of a professional bookkeeper.  

A skilled bookkeeper will ensure your chart of accounts:

• Aligns with Industry Standards: Adheres to property management accounting best practices, simplifying reporting and tax preparation. 
• Provides Accurate Classification: Transactions are categorized correctly, minimizing errors and ensuring tax compliance.
• Promotes Efficient Use: Designed to be intuitive and streamlined, saving you valuable time and reducing frustration.

“The chart of accounts tends to be a major source of stress for our property management clients. By outsourcing, they gain peace of mind, ensure their financials are transparent, and streamline tax preparation.” 

– Paul Yee, Co-Owner, NorthStar Bookkeeping 

Outsource Your Property Management Bookkeeping With NorthStar Bookkeeping

Property management firms can achieve streamlined bookkeeping and financial clarity with NorthStar Bookkeeping. Our expertise in property management accounting and proficiency in QuickBooks allows us to offer unparalleled financial support. Ready to optimize your property management bookkeeping? Contact us today, and let’s chart a course toward financial success.