How it runs for property management companies
Your accountant reconciles each trust and operating account within days of the statement in AppFolio, Buildium, Yardi and QuickBooks Online, lists every exception with an owner and files the signed reconciliation in LedgerDesk.
What is a bank reconciliation service?
A bank reconciliation service compares the transactions in your accounting software with the transactions on your bank and credit-card statements and explains every difference. The goal is a ledger balance that agrees with the statement after timing items such as outstanding checks and deposits in transit. Done monthly, it catches missing entries, duplicates, bank errors and fraud early.
What we handle for property management companies
- Trust account three-way reconciliation prepared for broker signature monthly
- Batched online rent deposits matched to tenant receipts net of fees
- Owner distribution ACH files traced to individual owner ledgers
- Separate security deposit accounts reconciled to tenant deposit balances
- Corporate operating and card accounts reconciled in QuickBooks Online or Xero
The KPI that matters here
Every trust and operating account reconciled within 5 business days of the statement with the three-way schedule filed.
Property management compliance notes
State trust-account rules
Most US states require property managers who hold client funds to use a designated trust account, keep a ledger per owner and tenant and reconcile the account to the bank and to the sum of individual ledgers every month. Some states set deadlines for depositing receipts and prohibit any overdraft of an individual owner's balance. We prepare the ledgers and the three-way reconciliation; the broker of record signs and remains responsible.
Security deposits
Deposit handling is set by state and sometimes city law: where deposits are held, whether interest is owed, how quickly they must be returned after move-out and what deductions need itemizing. We track each deposit by tenant, record deductions with the invoice behind them and prepare the itemized statement inside the deadline for your review.
Owner statements and 1099-MISC
Management companies report rent collected on behalf of each owner on Form 1099-MISC once it reaches the annual threshold, and payments to unincorporated vendors on Form 1099-NEC. Owner statements must agree with the trust ledger and show income, expenses, fees, reserves and distributions. We keep W-9s and cumulative figures current so January filing is prepared for your review.
UK, Canada and Australia client money
UK letting agents must belong to a Client Money Protection scheme and protect tenancy deposits in a government-approved scheme within 30 days. Canadian provinces and Australian states set trust-account, audit and receipt rules for agencies holding rent and bonds. We maintain the records and reconciliations in the format the regulator or auditor expects.
Property management software we work in
- AppFolio
- Buildium
- Yardi
- QuickBooks Online
- Xero
- Bill.com
- Gusto
- Rent Manager
- Propertyware
- All 50 platforms
More for property management companies
Other services for property management
Bank reconciliation in other industries
Frequently asked questions
What does a three-way trust reconciliation include?
It compares the adjusted bank balance, the trust liability control account in the ledger and the total of every individual owner and tenant balance on the same date. All three must agree. The accountant prepares the schedule with outstanding items and their ages, documents any difference and files it for the broker's signature and retention.
How do you reconcile batched online rent payments?
The platform's payment processor deposits rent in batches net of its fees, sometimes a day or two after the tenant paid. The accountant matches each batch to the individual tenant receipts it contains, posts processor fees to the correct payer under the management agreement and investigates any receipt not yet deposited or any deposit with no receipts.
Can you reconcile a separate security deposit account?
Yes, where state law or your policy holds deposits in a separate account, it is reconciled to the sum of tenant deposit balances every month, with interest posted where required. Move-in deposits and move-out refunds or deductions are traced through both the tenant ledger and the bank. Differences are reported the same week.
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