Efficient accounting workflows are the backbone of any successful property management company. Without smooth processes in place, accounting bottlenecks can hinder operations, delay financial reporting, and create a ripple effect across other departments. Property management companies often face significant challenges when it comes to handling accounting tasks, especially with a large portfolio. Let’s explore these common challenges, their effects, and how adopting the right solutions can ease the burden.
Common Accounting Bottlenecks Faced by Property Management Companies:
1. Manual Data Entry:
Many property management companies still rely on manual data entry for financial transactions and reporting. This leads to inefficiencies and increases the risk of errors. According to AppFolio, one of the biggest challenges property managers face is handling financial transactions manually, leading to wasted time and frequent errors. Automating this process with tools not only reduces errors but also speeds up workflows, ensuring accuracy and efficiency.
2. Inconsistent Financial Reporting:
Property managers often struggle with inconsistent or outdated financial reports, which affects cash flow management and decision-making. Springbord highlights that revenue recognition and lease accounting errors are among the most common issues property management firms face. Using integrated financial management software like LeadSimple or AppFolio allows for real-time financial reporting, making it easier for property managers to keep track of income, expenses, and profits with up-to-date data.
3. Late Payments & Rent Collection:
Late payments from tenants are a common challenge, especially for property managers handling multiple units. According to MRI Software, over 60% of property managers feel overwhelmed by compliance obligations, including tracking payments and late fees. Automating rent collection through platforms like AppFolio can streamline this process by sending automated reminders to tenants, tracking payments, and ensuring that late fees are applied consistently. This can significantly reduce the administrative burden and ensure timely cash flow.
4. Inadequate Software Integration:
Many property management companies use disjointed software systems for different aspects of their operations, from tenant management to financial reporting. This fragmentation creates inefficiencies and makes it harder to track financials in real time. Over 53% of property management companies utilize software solutions to streamline operations, according to ProfileTree. The key to overcoming this bottleneck is adopting integrated property management platforms which provide a unified view of all financial data, helping property managers streamline their processes and reduce errors caused by using multiple systems.
5. Compliance Challenges:
Property management companies also face the daunting task of staying compliant with tax laws, financial regulations, and other industry standards. Springbord reports that complex lease accounting and revenue recognition remain significant compliance challenges for property managers. Implementing tools ensures that property managers stay updated with current regulations and maintain proper financial documentation for audits.
The Effects of These Bottlenecks on Your Business:
1. Reduced Cash Flow:
When payments are delayed or reports are not up to date, companies experience cash flow disruptions. According to NetSuite, poor cash flow management can prevent a business from making timely payments to vendors, leading to delays and potentially damaging business relationships. By automating rent collection with platforms like LeadSimple and AppFolio and utilizing real-time reporting in Buildium, you can ensure that all financial data is accurate and up-to-date, leading to better cash flow management.
2. Increased Operational Costs:
Inefficient accounting workflows lead to more hours spent correcting errors and following up on late payments. 24% of property managers say they hire additional staff to manage accounting errors caused by outdated systems, according to AppFolio. Adopting modern tools, which automate invoicing and financial reporting, reduces these extra costs by ensuring more accurate and timely processing of financial data.
3. Lost Productivity:
Employees who are forced to deal with errors and manual tracking spend less time focusing on core business operations, such as acquiring new tenants or improving property conditions. According to InsightSoftware, 60% of property managers cite time spent on financial corrections as one of the main reasons for lost productivity. By adopting and automating routine tasks, property managers can free up their time for more strategic tasks.
4. Non-Compliance Penalties:
Falling behind on compliance requirements can result in fines and penalties that are both costly and damaging to a company’s reputation. Springbord notes that many property managers face penalties due to missed deadlines or insufficient documentation. By using tools to stay compliant with tax laws and financial regulations, businesses can avoid these costly mistakes.
5. Employee Burnout:
The repetitive nature of fixing financial errors and tracking overdue payments can lead to employee burnout and turnover. According to Formstack, 51% of workers spend at least two hours per day on repetitive tasks, leading to inefficiencies and decreased job satisfaction. Outsourcing to trained remote professionals or utilizing software tools that streamline financial management can ease this burden on employees and help prevent burnout.
How Owndoor’s Remote Professionals Can Help:
Owndoor’s remote professionals are specifically trained to handle the accounting challenges that property management companies face. They are highly skilled in using industry-leading software like LeadSimple, AppFolio, Tenant Turner, Property Meld, and Buildium, allowing them to seamlessly integrate into your existing systems and handle accounting tasks with precision.
Our team provides:
✔ Efficient accounting workflows – From automated rent collection to detailed financial reporting.
✔ Scalability – Whether you need one remote assistant or a full team of experts.
✔ Industry expertise – Our professionals understand property management accounting, so you don’t have to worry about errors or delays.
✔ 24/7 support – Ensuring your business has the support it needs whenever necessary.
By offshoring accounting functions to Owndoor, you can streamline your workflows, reduce costs, and ensure timely reporting and compliance. Our remote professionals are ready to make a positive impact on your business today.
FAQs:
Q1: How can Owndoor’s remote professionals improve my property management accounting?
A1: Owndoor’s remote professionals bring specialized expertise in property management accounting, handling everything from rent collection to financial reporting, allowing you to streamline your workflows.
Q2: What tools does Owndoor use to manage accounting workflows?
A2: Our professionals are experts in AppFolio, Buildium, LeadSimple, and Property Meld, ensuring seamless integration with your current software and improving your financial management.
Q3: Can Owndoor help with tax compliance and preparation?
A3: Yes! Our professionals ensure that your financial records are accurate and compliant with industry tax regulations, minimizing your risk of penalties.
Q4: How quickly can I onboard Owndoor’s professionals?
A4: Our remote professionals are pre-trained, allowing for quick integration into your workflow, with minimal onboarding time required.
Q5: How does Owndoor save my company money?
A5: By outsourcing accounting tasks to Owndoor, you eliminate hiring costs, training expenses, and operational overhead, while improving efficiency and reducing errors.
