Last modified on January 25th, 2024
By Rae Parker
The real estate market and digital landscape have both seen unprecedented changes in the last few years. But has your property management accounting software evolved alongside these changes?
More and more workflows are gaining efficiency from automation, and your property management accounting processes should be no different. One specific task that could benefit from automation is your loan tracking system. If you are still heavily managing–and reporting on–your loans manually, your organization could benefit greatly from loan tracking software.
Read on to learn more about the benefits of loan tracking software and how to choose the best accounting software solution for your needs.
How does loan tracking work?
As a property management professional, one of your tasks is likely monitoring mortgages payable for properties.
And in doing so, you’re either using property management accounting software or a more traditional method for tracking, so your stakeholders can see the lifecycle and details of the loan.
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.
Right-sized tools are also 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.
What are the benefits of using a property management accounting software solution for loan tracking?
Not all accounting software is created equal, and there are many benefits in using a dedicated property management accounting software solution for loan tracking. Solutions like using a spreadsheet may work in the short-term, but they do not come with the advanced features to track your loans over time like a true purpose-built property management software.
By utilizing accounting software that includes loan tracking, you can more quickly make informed decisions to stay ahead of today’s competitive real estate market.
Using a loan tracking software tool will also aid you in:
- Knowing when to refinance a mortgage to get a better interest rate
- Proactively planning to refinance before a balloon payment is due
- 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. Having your data dispersed across spreadsheets and hard copies of your loan documents 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.
Using this property management accounting software can also save your accountants valuable time, allowing them to focus on higher-value tasks, and less time troubleshooting or manually updating transactions.
Additionally, your stakeholders will have better visibility into where loans stand. With loan tracking software 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 accounting software
When looking for property management software providers, there are a few things you should consider to help you effectively track loans:
1.) Scalability
For any business to grow, it’s important to be equipped with the tools to do so. As your property management business grows, your provider’s product offerings should scale to fit your needs.
Find out how and if their accounting software is updating its 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 via solutions that include loan tracking software, you won’t have to make those trade-offs.
2.) Ease of use
If your new property management accounting 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 processes 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 software 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 property management accounting software does it all and then some.
4.) Transparency
Lastly, when it comes to choosing an accounting software provider for your needs, choose one that you can trust and that 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 are 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.
Start Exploring Property Management Accounting Software Options
AppFolio Property Manager is purpose-built for accountants, giving you the ability to streamline the essential accounting software tools so you can run your business efficiently and effectively. Learn more about how you can automate your accounting functions and loan tracking needs using modern, all-in-one technology.
Looking for more ways to streamline your accounting operations? Download our free guide below.
Comments by Rae Parker