How do you aggregate PM books with the stuff you pay for?

Question

For those of you using outside PM, do you have a clean or automated solution for aggregating your PM books with the stuff you pay for yourself (insurance, taxes, mortgage payment, admin costs, materials, travel, etc)?

The data would be used to track full performance, prepare tax returns, bank packages...all the normal stuff for T12s, P&L by property and total portfolio, and internal performance tracking metrics.

Mike Dymski · Answer

Hey @Harman N.  I tried converting AppFolio reports into a file format that could be uploaded into QB and that did not work.  I manually key AppFolio Owner's Statement data into a standard Excel template that is prepopulated with recurring descriptions (unit numbers, rents, management fees, landscaping, dates, etc.)  I tried uploading that file into QB and QB would not support it.  So, I use Xero instead...and upload the Excel file (CSV).  Incidentally, Xero is significantly more intuitive than QB.

Currently, I am doing this at a transaction level but may start using aggregated totals.  I catch PM errors during this process; so, not sure how aggregated I can go anyway.  For example, I recently noticed that the PM did not transfer a security deposit to my account for back rent after a non-paying resident moved out, did not bill back residents for utilities, forgot to reimburse a portion of carpet repair caused by a former resident's pet (PM did not withhold security deposit or have move in/move out inspection documents), etc.

It's not an elegant process but it is semi-automated.

Jeff Greenberg · Answer

Our PM does most of the book, but  each quarter we send her the info on what we paid for and she does journal entries for a complete picture for our investors and the bank.

Harman N. · Answer

Thanks Mike, PMed you my email address

Mike Dymski · Answer

@Harman N. sure, PM me your email address.  Keep in mind that the spreadsheet is for upload purposes only; so, it's basic.

I bought QB and planned to use it but it was not intuitive and could not facilitate the file uploads.  So, I tried a 30 day trial with Xero instead, it worked, and I have been on it for a few years now.

Harman N. · Answer

Thanks for the input Mike! Did you move all your bookkeeping & accounting to Xero from QB? Or is Xero a complement to your QBO?

Would you mind sharing your Excel template (w/o the data) with me? I've been improving my spreadsheet a little bit each month, but right now I'm only at 4 properties / 10 units in service, and I don't think my spreadsheet would scale 5x..

Harman N. · Answer

Hey Mike,

Did you ever figure this out? Every month I spend 2-3 hours translating the Appfolio cash flow report I get from my PM into double-ledger accounting for Quickbooks.

Kris Freeberg · Answer

@Mike Dymski -

I'm working on an Appfolio project right now.  It has robust financial statements that most PMs don't understand because they're PMs, not accountants.  It's a fear-of-the-unknown, beyond-here-there-be-dragons thing.  Appfolio is a great tool but you have to use it intelligently and understand accounting.

Gita Faust · Answer

@Mike Dymski I may be late to the conversation but here is how we look at automating your accounting and financials for your properties, overhead even when you manage it or someone else does.

1. One time data entry - What ever you enter should be populated in your reporting.

2. No journal entry - There are exceptions to the rule but 99% no JE. Exception for a landlord would payroll if it is outsourced, depreciation and for a property manager almost never.

3. Use one software please do it all. Look at your cost before you switch.

4. T12s if you are using QuickBooks let me know your requirements.

5. Automate bill payments - from entering to approval to payments. This can be accomplished with one time entry.

6. As to asking your PM to take your details and add it to their books - watch out PM's with liability. I would not recommend that to any PM companies. Unless they are creating a new set of books for you at an additional charge and with a agreement in writing.

7. If you are running metrics - are you running those on excel or another software? Take the data from your PM company add it to QuickBooks and run your metrics.

You should enter the monthly numbers from your PM to know your cash flow, how your property is performing and specially if the rent is the same every month.

Mike Dymski · Answer

@Nathan Miller I need more robust reporting for commercial lenders, financing packages and general analysis (separate and aggregated property P&Ls, T12s, rent rolls); so, unfortunately, I may need to handle the bookkeeping myself or continue to vet PMs who provide this service.  I see this reporting from sellers when performing due diligence on properties; so, there are PMs and systems that are providing this data.

Nathan Miller · Answer

@Mike Dymski - most property managers won't accommodate that easily, so what I see most people do is just keep track of their self-paid expenses throughout the year.  Then add them to your Schedule-E at tax time.

How do you aggregate PM books with the stuff you pay for?

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