The right real estate accounting app can increase the value of your services and save both your practice and your clients time and money.
Picture this: it’s the end of the tax year and your client comes in to discuss strategies for filing and mitigating their tax bill for the year. They bring with them a folder of receipts, printed bank statements showing commingled funds, and then get out a half-complete spreadsheet full of errors. Getting their finances in order is going to take you hours or even days.
At best, you will file an accurate tax return for them. At worst, they will miss numerous deductible expenses and overpay their taxes. And frankly, this system doesn’t leave you any time for value-added services, such as additional financial advice and the implementation of long-term tax strategies.
So, what can you do? This is where real estate accounting software comes into play. In this article, we look at what makes a quality real estate accounting app for your clients and how the right software can help you increase the value of your services, and save both your practice and your clients time and money.
A few key features to look for in a real estate accounting app for your clients include the following:
Having a system that is cloud-based means that you and your clients can access it from any device at any time. This makes it far easier to share accounts, establish oversight throughout the year, and ultimately keep accurate and up-to-date accounts.
A quality app for both iOS and Android will enable real estate clients to update their accounts in real-time. This will help them avoid missing or forgetting about deductible expenses and result in more accurate accounts to ultimately save them money.
Paper receipts get lost, easily fade, and are hard to keep organized. A quality real estate accounting software for your clients will allow them to quickly scan receipts at the point of sale using the app, then store a digitized version alongside their tracked expenses.
Doing this is not only vital for tax time but is important in order for financial oversight of your portfolio. If you can’t easily break down exactly where the money is being spent and analyze the profitability of each unit specifically, you can’t make impactful adjustments to your investment strategy. This could inhibit your ability to increase cash flow and grow your portfolio.
By connecting your bank account, users can easily view and reconcile transactions without having to navigate between numerous screens, or print off pages of paper statements. This saves time and removes the need for manual data entry.
A good real estate accounting software will offer detailed financial reporting to give your clients and yourself oversight of the rental business’s financial health. With access to this data, you can increase efficiency and improve profitability.
By allowing accountants and CPAs direct access to the portfolio finances, a good real estate accounting software can save you time and enable you to offer value-added financial advice improving client retention.
Running a real estate business isn’t just about the finances. Landlords, real estate investors, and property managers need to find and screen tenants, manage communications, share and store important documents, manage inspections, ensure the property is properly maintained, collect rent, and more.
By combining vital accounting functionality with important property management features, real estate accounting software can help your real estate clients streamline their portfolio management.
There are a variety of limitations to small business accounting software like QuickBooks that make them unsuitable for many real estate professionals, especially when compared with industry-specific software such as Landlord Studio.
The first limitation is the difficulty to get set up properly. With QuickBooks, for example, real estate professionals will need a nuanced understanding of how to use customers, classes, and the chart of accounts. And even then, tracking on a unit by unit basis is going to be challenging. For you then, this means either investing time in educating your clients to properly set up and utilize the software day-to-day, or risk having them make a mess of their accounts that you’ll have to sort out at tax time.
The second limitation is the lack of property management functionality. As already mentioned, your clients need to do a whole lot more than simply track their income and expenses. This means that if they use a small business accounting software, they will need to also employ a variety of other solutions which can quickly become confusing and costly.
On the other hand, with industry-specific software like Landlord Studio, users can not only keep detailed and up to date records of their account but also create rental listings, collect and pre-screen tenant applications, automate tenant communications, and collect rent online. Plus, tenants can even use the tenant portal to view and pay rent and tenant payable expenses.
Click the button below to find out more about Landlord Studio’s key property management and accounting features.