Last modified on February 7th, 2023
By Brittany Benz
The end of the year is approaching, which means now is the time to begin checking off all of your year-end reporting tasks and getting your 1099s in line. However, if you’re relying on paper files or using accounting software that’s separate from your property management solution, this process can be incredibly time-consuming, cumbersome, and even error-prone for your property management business. Read on to find out five ways you can streamline your end-of-year duties so you can create space for what matters — big-picture thinking for the year ahead.
While this article contains helpful information, we are not providing legal advice. You should consult a qualified tax attorney for any specific questions about filing 1099s or year-end reports for your business.
1.) Move to a paperless accounting system
Paper-based accounting processes take up more time and can lead to errors due to double data entry. Meanwhile, generic accounting solutions like QuickBooks are not integrated into your business, so it takes longer to gather information and it’s harder to have a complete financial picture. Rather than relying on a separate system to handle your accounting needs, look for a property management solution with built-in accounting to save your team time on re-entering data and increase accuracy. Since everything is in one place, a fully integrated system like AppFolio can eliminate the pain of accessing and understanding the essential data that drives your business.
2.) Catch up on rent payments and decrease delinquencies
Manually collecting and depositing paper checks for rent payments each month eats up a lot of your team’s time and can lead to human error. Plus, it’s inconvenient for your residents to have to come into the office or mail in their rent payments. Make life easier for your team and renters by offering online payments. This way, your residents can quickly and easily pay their rent right from their phones and your team can get time back to focus on other high-value tasks. Many online payment systems like AppFolio also send out automatic reminders and have the option to set up recurring payments, which can help cut down on delinquencies and ensure rent is paid on time and in full.
3.) Audit your reporting processes
Manually compiling reports by hand is time-consuming and requires a lot of expertise when it comes to analyzing data. Take a deep dive into your reporting tasks to make sure high-value reports are conducted and sent regularly. In addition, remove any unnecessary reporting tasks to free up internal bandwidth. Reporting tools can analyze the data on your behalf, saving time and enabling you to get a clearer picture of your finances in minutes. Consider switching to a platform that has these tools, along with built-in analytics that can spot errors or inconsistencies in your data, which can help you avoid penalty fees or an unexpected audit in 2023.
With a system like AppFolio Property Manager, you can flexibly build reports that deliver real-time insight into business performance using the Report Builder capability. Users can combine and customize reports to meet specific requirements, save new reports for future reference, and easily share reports with owners, all while maintaining drill-down capabilities. Additionally, there are numerous reports you can choose from, including owner statements, income statements, cash flow statements, balance sheets, and more.
4.) Simplify accounts payable
Accounts payable is a tedious process your accounting team must handle all year, and manually entering vendor invoices for each month can take weeks of your team’s time. You can automate the process with innovative features like Smart Bill Entry in AppFolio, which reads PDF invoices from vendors, identifies key information, and assists with processing so you can pay bills more efficiently year-round. With AppFolio, you can also pay vendors — another benefit of keeping everything digital and in one place.
5.) Speed up 1099 filings
If you forget or skip filing your 1099s, you can get into big trouble with the IRS and put your business at stake. Most property managers must issue and file 1099s by January 31 and file owner 1099s by February 28 (March 31 if filing electronically). Instead of sending 1099s to owners by mail, send them electronically with an advanced system like AppFolio. The system already has all of their information, so 1099s are easier and faster to process. AppFolio also provides support for the 1099-NEC form, which is required for reporting on vendor earnings.
Completing all of your end-of-year tasks is a time-consuming yet necessary process. However, when you have a fully digital system with built-in accounting and reporting capabilities, the process is a whole lot faster and you can breathe easy knowing your financial data is accurate and secure. By making the most of the tips shared above, you’ll also put yourself in a great position for next year’s tax season. To learn more about how you can streamline your accounting processes, take a look at this guide.
Comments by Brittany Benz