Review by Douglas Schultz & Andrea Cope
April 15 is about to come and
go. Your accountant is still
not speaking to you because
of the box of receipts and
deposit slips you handed her
at the last minute to prepare
last year’s tax returns.
Knowing this, your New
Year’s resolution was to get
your rental property accounting organized on some sort
of accounting software. But which one? There is a variety
of accounting software from which to choose, but many
property owners like QuickBooks or Tenant Pro 7.
In selecting any accounting software, assistance from
your accountant or consultant is advisable. You can also
purchase the training materials the program offers to assist
you in setting up your system properly. If you’re properly
set up, you’ll derive the most benefit from your accounting
program and you’ll use it with confidence.
QuickBooks
QuickBooks was developed by Intuit over 20 years
ago. It’s user friendly and can be purchased either online
or from your local office-supply or discount store for
about $200 to $350, depending on the level of software
you purchase. We recommend the QuickBooks Pro
version or higher. QuickBooks is an integrated accounting
system featuring a general ledger, accounts receivable and
accounts payable—eliminating double entry information.
The software provides reminders for bill-payment due dates
and amounts due from tenants, helping to reduce your
time to manage this process. All information entered into
QuickBooks is immediately recorded in the system, which
provides you with up-to-date accounting information. The
system can generate numerous reports, including balance
sheets and profit and loss statements not only at the total
level but also for each building you own or manage. The
system is fully integrated with Word, Excel and Outlook to
facilitate more effective management of your properties.
QuickBooks is easy to manipulate into your property
management system, using the structure of classes and
customers designed in the software. You can track rental
payments by tenant, along with tracking individual
buildings. Every bill you receive can be input and classified
to an individual building so that you have accurate
information regarding the performance of each property.
The system is efficient: once you set up a vendor or tenant,
invoices or bills to be paid are auto-filed, reducing the
amount of time for you to write checks and record rent
deposits.
There are a variety of reports and graphs that can be
generated from the system. You can get a report specifying
bills to be paid, detail each of your vendors, track which
tenant still owes you rent, look at deposit detail, and
budget to actual reports, just to name a few. You can
reconcile your bank accounts right through the system.
For year-end accounting and tax preparation, Form 1099s
can be generated through QuickBooks, and an income-tax
summary and detail report can be given to your accountant.
QuickBooks also has numerous add-on programs that you
can purchase, such as payroll, online payment solutions
and customer support.
Once you have purchased QuickBooks, you can set
up multiple files within the program. This allows you to
create your personal financial statement and track your
own income and expenses. You can reconcile credit
card purchases and bank accounts, set up budgets for
your personal expenses and generate the all-important
tax reports for your accountant. You can learn more
about QuickBooks and order the program online at
www.intuit.com. Check out the "Community Home" tab on
their web site for help with specific issues.
Tenant Pro 7
Maybe you want a program that’s specifically geared
toward property management. Tenant Pro 7 could be just
the solution. The program was developed in 1992 and
now has over 20,000 professional property management
users. It gives you the ability to efficiently maintain access
and distribute key information to improve property
performance and increase returns. Tenant Pro 7 tracks
vital information on tenants, owners, units, vendors and properties in one easy-to-use, yet powerful,
program.
This program comes complete with
a fully integrated accounting system,
featuring a general ledger, accounts
receivable and accounts payable—
eliminating the need for double-entry
information. The program’s database tracks
work orders and reminders, prints late
notices, leases, checks, 1099s and more than
120 financial and management reports.
Tenant Pro 7 can be used for virtually any
property type, size or owner configuration.
The tenant and lease management
tools in this program are unique. The
software provides instant information on
lease expirations, status of move-ins and
move-outs, delinquencies, escalations and
vacancies. You can also track information on
pending, current, past, evicted and inactive
tenants. The “leases” window easily tracks
the tenant or tenants associated with each
lease. This is helpful if you have multiple
tenants per lease and various changes to the
lease. The program will also track security
deposits, which facilitates the move-out
process.
Tenant Pro 7 makes the move-in and move-out process quick and simple.
The program guides you through both
processes to capture the data you need to
move a tenant in and make certain that all
unapplied charges or open payments are
collected. This way, nothing is lost when
a tenant moves out. The program also
has numerous letters and agreements that
you can modify for your use; and it keeps
track of this correspondence in the lease
management section of the program.
Tenant Pro 7 has complete accounts receivable
and accounts-payable capabilities.
This includes tenant payment records,
bank reconciliations, a sales-tax tracker (if
needed), tenant statements, automatic check
writing and vendor management. Another
nice feature of this program is the property
maintenance feature, which allows you to
record maintenance requests, print work
orders, track the status of open work orders
and keep a permanent maintenance history
for each tenant, unit or property.
Tenant Pro 7 also offers additional addon
products such as payroll, common area
maintenance and utility billing, training
CDs, electronic payment-processing
solutions and applicant screening. If
you are familiar and comfortable with
QuickBooks, there is an add-on product
that automatically transfers and updates
accounting information from Tenant Pro 7
to QuickBooks.
The price for this program ranges from
$595 to $2,195, not including any add-on
programs or technical support plans. The
price is based on the number of units you
manage. You can get a free 30-day trial
version of the program and also view more
information at www.propertyautomation.com.
Either program will capture the
accounting data needed to help you better
manage your properties and provide a
smooth year-end process for you and your
accountant.
_________________________________________________________________________________________________________________
The opinions expressed in this article are those
of the authors and do not necessarily reflect the
viewpoint of SFAA or the San Francisco Apartment
Magazine. Douglas Schultz is a partner in the tax
practice of Burr, Pilger, & Mayer, a San Franciscobased
accounting and tax consulting firm. Andrea
Cope is a partner in the consulting practice at BPM,
specializing in client accounting services. They can
both be reached at 415-421-5757. Copyright © 2006
by the San Francisco Apartment Magazine. All rights
reserved. www.sfaa.org
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