Last modified on October 20th, 2021
By Rae Parker
The world around us has evolved digitally, but has your accounting software? More and more tasks are gaining efficiency from automation, and your accounting processes should be no different. One specific task that could benefit from automation is your loan tracking system.
How does loan tracking work?
When monitoring mortgages payable for a property, you likely use either accounting software or a more traditional method for tracking, so that stakeholders can see the lifecycle and details of the loan. You may find this tool specifically helpful so that you can keep an eye on existing loans and mortgages payable to banks in order to assess and optimize your debt financing strategy. With well-structured property management accounting software, your loan tracking system will make it easier for you to compare the interest rates on your loans as compared to current market rates to make the best decisions for your business.
What are the benefits of using a software solution for loan tracking?
Not all software is created equal, and there are many benefits in using a dedicated software solution for loan tracking. Solutions like using a spreadsheet may work for a moment, but they do not come with the advanced features to track your loans like a true purpose-built property management software.
Quickly make informed decisions to stay ahead of today’s competitive real estate market by utilizing software that includes loan tracking. Using a loan tracking tool aids in knowing when to refinance a mortgage to get a better interest rate, proactively planning to refinance before a balloon payment is due, and/or keeping your property leveraged so that cash can be used elsewhere, like to pay investors or expand your portfolio. On average, it could take 2-3 months to make a significant financial decision for your property, and with your data dispersed in spreadsheets and hard copies of your loan documents, this can delay the time even longer. By consolidating this data into loan tracking software, you’ll have quick access to the key data points of your loan, such as your loan provider(s), current balance, prepayment penalties, and interest rate, in order to make decisions more quickly.
For your accountants, using this software can save them valuable time, allowing them to focus on higher value tasks, and less time troubleshooting or manually updating transactions. Additionally, your stakeholders will have a better visibility into where the loans stand. With loan tracking’s automation, your team will be able to generate an amortization schedule so that accounting transactions are automatically created with that month’s accurate breakdown of principal, interest, and/or escrow.
Things you should look for in an accounting software
When looking for software providers, there’s a few things you should consider to help you effectively track loans:
For any business to grow, it’s important to be equipped with the tools to do so. As your business grows, your provider’s product offerings should fit to your needs. Find out how and if their software is updating their features to fit the needs of your business over time. Some providers may seem to meet all of your needs, until you take a closer look and realize features may cost a little more or not fully be available. Operationally, you shouldn’t have to add on extra members for your team or require them to spend more time doing manual tasks like monthly loan transactions. But with the help of automation, you won’t have to make those trade offs.
2.) Ease of use
If the software doesn’t perform in the way you need it to, you and your team could end up spending more time working through basic tasks. With AppFolio Property Manager loan tracking, you are able to monitor all of your loans payable from a single location in a concise way that doesn’t lead to second guessing. Within the platform, you’re able to easily view all of your property loan data, such as loan number and provider(s), current balance, interest rate, and maturity date. The detailed input field lets you know upfront what information you’ll need to enter, and there’s even a self-guided option that walks you through step-by-step. Our loan tracking feature can also be used for newly originated loans or existing loans that have already been partially amortized.
3.) Integrated solutions
It is frustrating and time consuming to have to use multiple systems for one task, but a robust accounting platform like AppFolio Property Manager can do it all. With a comprehensive accounting system, AppFolio Property Manager allows you to gain visibility and make faster, more informed decisions when it comes to your accounting workflows. From online payables, to bank integrations and loan tracking, our centralized accounting software does it all and then some.
Lastly when it comes to choosing a software provider for your needs, choose one that you can trust and provides you with the transparency you need as your technology partner. You want to be able to know that what you see is exactly what you’re getting and there’s no hidden surprises. Being able to have an in-depth view that accurately breaks down the numbers reduces the likelihood of errors due to manual updates.
AppFolio Property Manager is purpose-built for accountants, giving you the ability to streamline the essential accounting tools so you can run your business efficiently and effectively. Learn more about how you can automate your accounting functions using modern, all-in-one technology.