Simplifying Your Life with the Right Accounting Software

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.

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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