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Rental Accounting

The Best Alternative to Spreadsheets for Rental Property Accounting

Spreadsheets changed the world. They took pen and paper processes and turbo charged them. I don’t think it’s unreasonable to say they revolutionized how business is done.

However, they are also rife with errors and, unsurprisingly over the last 30 years since their inception numerous industry targeted solutions have been designed to address the weaknesses of spreadsheets.

So, for anyone looking for a better way to manage their rental property accounts, who is struggling with spreadsheet errors and wants to reduce their admin work the good news is that property management solutions like Landlord Studio have you covered.

The Shortcomings of Spreadsheets for Rental Properties

1. Spreadsheets contain errors

The very first shortcoming is that the majority of spreadsheets have errors. In fact, in a study, it was found that as many as 88% of spreadsheets have errors. Many of these are simple typos. However, many are mathematical errors or errors in formulas. Even a misplaced decimal could have devastating effects. JP Morgan’s so-called “London whale” fiasco, for example, involved a spreadsheet error and led to a $6 billion loss for the company.

2. They are inefficient

When we talk about efficiency we are talking about the minimum input necessary to achieve the required output. To keep a detailed spreadsheet up to date and free of errors is a time-consuming task and as we mentioned above, one seemingly small error could throw all of that hard work out the window in an instant.

The inefficiencies of using a spreadsheet for rental property income and expense tracking isn’t so bad when you have one or two properties, however, as your portfolio grows so too does the complexity and associated time required to manage and track your investment finances. And, so too does the likelihood of costly errors.

A spreadsheet doesn’t scale with you, it gets larger and more unwieldy as your business and financial complexity grows.

3. They only do one thing

Spreadsheets are designed for one thing and while they do that one thing well, as a landlord or property manager, you have more needs than just income and expense tracking.

By pairing accounting tools with property management tools in a landlord specific solution you can dramatically increase the efficiency of multiple areas of your rental business.

This means, instead of inexorably being overwhelmed by the growing number and complexity of spreadsheets, you can instead scale your portfolio with increasing efficiency.

Save time and maximize deductions while simultaneously improving the management of your properties.

taxes and finance

Reasons to Upgrade to Landlord Studio from Spreadsheets

Combine property management features with basic accounting

  • Tenant screening

Run tenant screening reports through the software as an efficient way to screen your tenants.

  • Rent collection

Collect rent through Landlord Studio and the system will automatically recognize and reconcile the transaction for you. This makes it easier for tenants to pay their rent, reducing the chance of late or missed payments with our auto-pay feature, and improves the accuracy of income tracking.

  • Document storage 

Store all the important documents related to your properties and lease in the system and have access for reference purposes at any time from any device.

  • Automation

Automate your rent collection and income tracking as well as regular tenant communications like rent reminders and receipts.

  • And more…

Improved Income Expense Tracking Accuracy

Landlord Studio has a number of features designed to reduce the chance of errors in your rental property accounting. For example, connect your bank account to view and reconcile income and expenses. This not only saves you time but removes the need for manual data entry.

Secondly, our smart scan receipt feature allows you to scan your receipt with your phone, the system reads and inputs the details for you and stores a digital copy with the expense.

Finally, our online rent collection feature allows you to automate the entirety of the rent collection and income tracking process, removing any potential for incorrectly tracking rent payments.

Conclusion

Ultimately the solution that you choose needs to fit your needs. There is a reason spreadsheets have been used for years, they are adaptable and generally great for general finance tracking.

However, when it comes to tracking income and expenses for properties they can very quickly get out of hand. Each property needs to be tracked like an individual business which means if you have 20 units you’ll need at least 20 individual spreadsheets per tax year.

Or you can find a solution that is designed to make managing your properties and income and expenses as easy as possible.

Try our free 14-day trial and see if Landlord Studio is the solution for you.

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