Are you wanting to find a better way of managing your money?

Property managers need to have professional accounting services. If they don’t, they run the risk of mismanaging their money on accident. Without the proper guidance, it’s easy to make a slew of mistakes.

So, what are the most common property management accounting mistakes to avoid?

We’ll go into the top 3 ones below. Keep reading if you want to help your company stay financially afloat!

1. Depositing Money Into the Wrong Account

Have you ever thought you transferred money and then realized it went to the wrong account?

Depositing money into the wrong account can lead to a host of problems. First, you might end up overdrawing an account. Second, if you put money into one owner’s account, they might think they have more to spend than they do. Once you adjust it, they could end up in the negative.

It also lessens their confidence in you as a property manager.

To solve this problem, you should set up multiple reviews before you hit “deposit.” Have more than one person check it over. If this isn’t feasible, examine it a few times yourself.

2. Not Returning Security Deposits

If you don’t return security deposits on time, your tenant might pull you into legal trouble.

In fact, in some cases, you might end up owing them triple the amount of money. Some states allow tenants to file treble damages. When this happens, you will have to pay up to three times the deposit amount by law.

So, you should do two things as soon as you can:

  1. Figure out the laws in your area and hire a lawyer if you need to
  2. Create a system that reminds you to return security deposits

3. Issues with Processing 1099s

1099s are contractor forms given to people who perform jobs for you. These people usually aren’t on your payroll, so it might get easier to forget about them come tax time.

However, to remain compliant with the law, you need to provide them with 1099s. These forms help them file their own annual taxes. If you don’t provide them with 1099s, or if you have trouble processing their 1099s, you might find yourself in legal trouble.

Failure to submit 1099s can lead to tax penalties for your company. As such, you need to make sure you have control processes in place. That way, you won’t forget to send them again.

Need property management accounting help? Try balancedassetsolutions.com. With them, you can get the commercial property management advice you need. They also work with a variety of property management accounting software types!

Ready to Better Your Property Management Accounting?

Property management accounting is a necessary skill to master.

Without the proper checks and balances in place, you can end up in unnecessary trouble. Yet, you don’t need to worry. As long as you work on avoiding the mistakes listed above, you’ll stand a better chance of keeping yourself in top financial shape!

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