Managing rental properties takes much more than finding good tenants and handling the occasional maintenance request. Perhaps most important is the task of managing your rental property management company’s cash flow, which can be pretty complex. To achieve this, your business must maintain excellent accounting processes that are in line with your company’s overarching objectives. Here are a few hacks that can make this monumental task a little bit more manageable.
Get a handle on your spending
In such a mobile industry, expenses from your employees are par for the course. But staying on top of those expenses and tracking the money going out of your business is essential. Implementing a formal spend management program, including a spending policy that requires employees to track, itemize and report their spending can help you gain visibility and establish greater control for leaner spending and smarter purchasing decisions.
Standardize wherever possible
The more back and forth that goes into every purchasing decision, the more time and money you’re wasting. Wherever possible, standardize and streamline these processes. For instance, create a list of preferred vendors, contractors and products that your employees can refer to whenever a need arises. By planning ahead, you’ll save your rental property management team a hassle and also ensure that expenses stay in line with your plan.
Use technology to your advantage
Thanks to today’s technology, there’s no need to struggle with manual processes anymore, and that includes accounting functions. Rental property management software can help with everything from automated rent calculations and billing to bank reconciliation, budgeting, arrears management and so much more. And while software may involve a financial investment, the time and money you’ll save as a result will far outweigh the expense.
Forecast and plan
Predicting your income and expenses can be challenging, but it’s a critical component of mitigating risk, especially in rental property management. Keeping tabs on current trends and analyzing past events can help you determine what you need to plan for in the future. It may not be possible to forecast with exact certainty, but you should at least be able to prepare your company to weather any storm that may come along.
Make data shareable and easily accessible
When your team can’t access the data they need to effectively do their jobs, it results in a lot of wasted time and effort, which is costly. There are many different people who contribute to and rely on accounting as part of their day to day job duties. Ensuring that everyone can easily access and share information will improve efficiency and productivity, helping your business to run more smoothly. Again, this is where rental property management software can make a huge impact.
Another way to streamline your accounting activities is to transition from paper to digital with as many of your records as possible. Not only will this make it much easier for your team to perform their duties, but it will also improve cash flow. For example, by accepting and encouraging online payments, you’ll enjoy faster access to your funds than if you had to process checks and wait for them to clear. As an added bonus, you’ll be helping the environment, something everyone can feel good about.
To be successful in the rental property management field, excellent accounting practices are a must. Getting a handle on your spending, utilizing software and planning ahead can help your company enjoy a much more stable financial future, which is the ultimate goal.