QuickBooks for property management tutorial

Property management is no piece of cake. From maintaining the record of tenants’ rent to facing maintenance costs, the property manager has to perform several chores every day. QuickBooks tool hub is a leading financial management software that automates many of these tasks. In this tutorial, you’re going to learn how to use QuickBooks for property management and make your processes faster. How to Use QuickBooks for Property Management Tutorial

1. Setting Up QuickBooks for Property Management 

 Choosing the Right Version

QuickBooks is available in three versions: Online, Desktop, and Self-Employed. Of the three, the most used for property management will be either QuickBooks Online or the QuickBooks Desktop Premier version. Access to QuickBooks Online is quite easy from anywhere, while QuickBooks Desktop Premier is more complex and personalized for property management.

Create a New Company File

Once your version is selected, follow these steps to create a new company file:

• QuickBooks Online: Once logged in, click “Create a new company.”

• QuickBooks Desktop: Open QuickBooks, then click “Create a new company.”

Follow the on-screen instructions to input your business information, including your company name and type of business. For property management, you may want to select “Service Business” or some equivalent.

2. Setup of Chart of Accounts

Account Definition

First of all, there is a need for an organized chart of accounts. It categorizes all your financial transactions and makes reporting easier. 

Create accounts for the following:

• Income: Rental Income, Late Fees, Other Income.
• Expenses: Repairs and Maintenance, Property Management Fees, Utilities, Property Taxes.
• Assets: Bank Accounts, Accounts Receivable.
• Liabilities: Loans Payable, Security Deposits.

Set up Classes or Locations 

To separately track properties using class or location: 

• Classes: Ideal for tracking classes of properties or units. To set up classes, go to “Settings” > “All Lists” > “Classes”.
• Locations: Perfect if you manage several properties. Set up under “Settings” > “All Lists” > “Locations.”

3. Tenant and Lease Agreement Management

Set Up Tenants as Customers

In QuickBooks, tenants are classified as customers. Set them up by:

• Going to “Sales” > “Customers” > “New Customer.”
• Typing in the tenant’s name and contact information.
• Adding in other crucial information, such as lease start and end dates in the “Notes” section for quick reference.

Creating and Tracking Lease Agreements

Though Quickbooks Online Dashboard itself doesn’t handle lease agreements directly, you can keep track with the help of notes and documents. For detailed lease management, consider integrating with any property management tool that syncs with QuickBooks.

4. Recording Transactions

Rent Payments

Record rent payments as described below:

• QuickBooks Online: Go to “Sales” > “Invoices” > “Create Invoice” for rent charges. To record the payment, select “+ New” > “Receive Payment” and choose the tenant’s name.

• QuickBooks Desktop: In the Customer menu, select “Create Sales Receipts.”

Expense Tracking

Track property-related expenses by:

• QuickBooks Online: Go to “Expenses” > “Vendors” > “New Expense” to enter bills and payments.
• QuickBooks Desktop: Go to “Banking” > “Write Checks” or “Enter Bills” to record expenses.

5. Managing Security Deposits

Security deposits are held in trust and should be tracked separately. To set up for these kinds of deposits, create a liability account:

QuickBooks Online/Desktop: Go to the “Accounting” menu, and click “Chart of Accounts.” Click “New,” then select “Liability.” Name it “Security Deposits.”

Record deposits received and refunds provided in this account for proper tracking.

6. Running Reports

Reports are useful in analyzing your performance in property management. Key reports to be generated:

Income and Expense Reports

Run the following reports based on your financial performance tracking needs:

• QuickBooks Online: In the left menu bar, click on “Reports,” then click “Profit and Loss” or “Expenses by Vendor.”
• QuickBooks Desktop: In the “Reports” menu, select “Company & Financial,” then choose “Profit & Loss.”

Rent Roll Report

This report shows how much each tenant owes in rent. Although there is no specific rent roll report in QuickBooks, there’s always an option to modify one or utilize third-party integrations.

Balance Sheet

List any assets, liabilities, and equity:

• QuickBooks Online: In the “Reports” menu, select “Balance Sheet.”
• QuickBooks Desktop: In the “Reports” menu, select “Company & Financial,” then choose “Balance Sheet.”

Automating and Integrating

7.1. Automate Recurring Transactions

Save yourself some time by automating regular transactions:

QuickBooks Online/Desktop: “\ + New” > “Recurring Transactions” and set up recurring invoices for rent or bills.

Integrate with Property Management Software

To expand the capability even more, integrate QuickBooks with property management software, such as Buildium or AppFolio. Such integrations are capable of transferring data automatically between platforms, reducing manual entry and associated errors.

8. Keeping Records Accurate

Regular Account Reconciliation

Regular reconciliation of your bank account ensures accuracy:

QuickBooks Online/Desktop: Reconcile ledger transactions against bank statements via “Accounting” > “Reconcile”.

Backup Your Data

Perform regular backups to ensure that you do not lose information.

• QuickBooks Online: Your data automatically gets backed up.
• QuickBooks Desktop: The backup can be made by using “Back Up Company” under the menu “File.”

Conclusion

QuickBooks is very efficient in managing properties by organizing all financial activities involved, budgeting expenses, and handling income. If you only set up your chart of accounts accordingly, record the transactions correctly, and generate reports that make much sense, then you will not doubt that property management will be truly efficient and organized. Equipped with what QuickBooks offers you, you are more prepared to face the complexities of property management.

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