KriyaGo - Blog #property accounting

Why Automated Bank Reconciliation for Real Estate Is Different and Why Generic Tools Fail

Tue, 21 Apr 2026 06:26:05 -0400

40–60 hrs

monthly manual rec time

$15,000

avg cost of reconciliation errors

99%+

matching accuracy

If your finance team is spending the last week of every month manually matching bank transactions to your property management ledger, you already know something is wrong. What you may not know is why the tools that work well in other industries, such as standard accounting bank feeds and general-purpose reconciliation modules, consistently fall short for real estate.

Real estate bank reconciliation is structurally more complex than reconciliation in most other industries. The transaction types, the multi-entity portfolio structures, the CAM billing cycles, and the trust accounting requirements do not exist in a standard accounts receivable workflow. Generic tools were not built for it. Every workaround your team has built around those limitations is consuming time and creating audit risk that a purpose-built solution eliminates.

KriyaBalance is a bank reconciliation designed specifically for how real estate finance works, not adapted from a general accounting tool. According to KriyaGo, it reduces month-end processing time from 40–60 hours to minutes and eliminates the $15,000 average cost of reconciliation errors.

This guide explains what makes property management bank reconciliation structurally different, where generic tools break under that complexity, and how a purpose-built reconciliation platform handles it.

What Makes Real Estate Bank Reconciliation Structurally Different

The fundamental challenge in real estate bank reconciliation is not transaction volume. It is the complexity of what those transactions represent and the multi-layered structures they need to be matched against.

In most businesses, reconciliation is a relatively linear exercise: a payment clears the bank, it matches a ledger entry, and the reconciliation is done. In property management, almost nothing is that straightforward.

Multi-Entity Portfolio Structures

A real estate operator managing a significant portfolio may maintain dozens or hundreds of separate bank accounts, operating accounts, reserve accounts, and security deposit escrows across individual properties, funds, and joint ventures. Reconciliation requires matching transactions across all of these accounts into a portfolio ledger that simultaneously tracks performance at the property, entity, and consolidated levels.

Generic reconciliation tools are designed for single-entity businesses. They do not natively handle multi-entity hierarchy, property-level account segregation, or consolidated portfolio roll-ups. Finance teams working with these tools spend significant time building manual bridges, spreadsheet aggregations and account code workarounds that consume the time automation was supposed to save.

Partial Payments and Split Tenant Transactions

Tenants do not always pay in full. Commercial tenants often pay base rent and CAM charges separately. Residential tenants may make partial payments when in arrears or on a payment plan. A single bank deposit may consolidate multiple tenants' payments from a payment processor, with the individual splits contained in a remittance file that a standard bank feed does not parse.

Generic matching logic looks for one-to-one transaction matches. Real estate requires partial-match logic, many-to-one matching for consolidated deposits, and the ability to apply payments against specific open charges on a tenant ledger, not just match a dollar amount.

CAM Reconciliation and Billing Cycles

Common Area Maintenance reconciliation produces transaction patterns that are unique to commercial real estate. Tenants pay monthly CAM estimates throughout the year. At year-end, actual costs are reconciled against estimates, resulting in catch-up billings or credit adjustments that arrive at the bank as transactions with no direct invoice match in the current period.

A generic reconciliation tool encounters a CAM catch-up payment and has no context for what it represents. It flags an exception. The finance team resolves it manually. In a large commercial portfolio with many tenants, this pattern repeats, constantly producing an exception queue that makes the reconciliation process largely manual, regardless of what automation is theoretically in place.

Escrow and Trust Accounting

Security deposits and escrow funds must be held in segregated trust accounts in most jurisdictions. The transactions flowing through these accounts, deposits collected at lease-up, partial releases during tenancy, full refunds at move-out, and interest accruals must be reconciled against tenant ledger records with an audit trail that satisfies regulatory and legal scrutiny.

Generic bank reconciliation tools have no concept of trust accounting compliance. They can confirm whether a dollar amount matches. They cannot confirm whether a deposit was released to the correct tenant, whether the trust account position is accurate against your liability schedule, or whether the documentation satisfies jurisdictional requirements.

The Cost of Getting It Wrong

KriyaGo reports that reconciliation errors cost real estate finance teams an average of $15,000, including staff time to identify and correct errors, audit exposure, and downstream rework. Beyond the direct cost, manual reconciliation, which runs 40–60 hours per month, delays period close, creates reporting lag for investors and owners, and occupies finance talent with work that yields no strategic insight.

Where Generic Tools Break: A Scenario-by-Scenario Look

The failure points are predictable. Here is how generic reconciliation tools handle the transaction types that property management finance teams encounter every month, compared to what KriyaBalance does with the same transactions:

Scenario	Generic Tool Result	KriyaBalance Result
Partial tenant payment	Flagged as an unmatched exception - manual resolution required	Matched against the open AR balance, applied to the tenant ledger automatically
CAM catch-up billing receipt	No context for transaction type - added to exception queue	Recognized as a CAM reconciliation pattern, applied to correct the billing period
Security deposit refund	Processed as outgoing payment - no trust account validation	Validated against the tenant deposit ledger, trust account compliance maintained
Multi-tenant consolidated deposit	Single transaction - no remittance parsing	Remittance data parsed, applied to individual tenant ledgers with confidence scoring.
Cross-entity intercompany transfer	Unmatched transaction - manual journal entry required	Recognized as an intercompany transfer pattern, routed to the correct entities

The consistent pattern: generic tools treat every complex real estate transaction as an exception requiring manual resolution. KriyaBalance is built to recognize these patterns as normal operating conditions and handle them automatically.

The Real Operational Cost of Manual Reconciliation

KriyaBalance cites 40–60 staff hours per month as the manual reconciliation workload it replaces. That number reflects a consistent pattern in multi-entity property management portfolios where transactions span dozens of bank accounts, multiple property types, and a mix of residential and commercial lease structures.

The direct labor cost is only part of the picture. Manual reconciliation creates downstream operational costs that are harder to quantify but consistently significant:

• Period close is gated on reconciliation completion every day the rec process runs, which is a day when investor and owner reporting is delayed

• Exception resolution occupies finance staff on reactive, low-value work rather than analysis and planning

• Audit preparation requires reconstructing reconciliation decisions that were made informally and never documented

• Trust account discrepancies discovered late in the process or post-audit carry regulatory consequences that extend beyond the accounting correction

For portfolio management companies using KriyaBalance, KriyaGo reports a 90% reduction in reconciliation time. For commercial real estate firms, the platform enables same-day close capabilities through real-time reconciliation, removing the reporting lag that manual processes create.

What Automation Looks Like in Practice

KriyaBalance reduces month-end reconciliation from 40–60 hours to minutes. The machine learning engine handles the matching work that consumes the most staff time. Only genuine exceptions transactions where the system's confidence score indicates ambiguity requiring human judgment reach the exception queue. The finance team's time shifts from processing matches to reviewing a manageable set of flagged items.

How KriyaBalance Is Built for Real Estate, Not Adapted for It

The distinction matters: KriyaBalance is not a generic reconciliation tool configured for real estate. It is a reconciliation platform built specifically around real estate's financial structures. That specificity shows up across every layer of the product.

Real-Time Direct Banking Connectivity

KriyaBalance connects directly to the bank's property management portfolios that they actually use. In the United States, direct API partnerships with Wells Fargo, Signature Bank, and TD Bank provide real-time transaction feeds. In Canada, native integration with TD Bank and RBC supports cross-border portfolio management. For broader North American and European coverage, Plaid and Yodlee extend connectivity to virtually every financial institution across those markets. Australian operations are served through a Basiq integration covering the Australian banking ecosystem.

Direct API connections mean live data, not yesterday's exported bank statement. Your cash position is current. Your exception queue reflects today's transactions, not a batch processed overnight.

Machine Learning That Understands Real Estate Transactions

The matching engine in KriyaBalance uses machine-learning algorithms trained to understand real estate transaction patterns, including CAM reconciliations, escrow management, multi-entity rent collections, and the partial payment structures described earlier. This is materially different from a general AR matching algorithm applied to real estate data.

The system improves over time. It learns the specific patterns of your portfolio, which tenants consistently pay in split transactions, which properties batch through a payment processor weekly, and which entities have predictable intercompany transfer schedules. That learning reduces exceptions over time and increases the automation rate as the platform becomes familiar with your operations.

When automatic matching is not possible, KriyaBalance provides confidence scores and ranked suggested matches. Human reviewers work from a pre-analyzed shortlist rather than an undifferentiated exception queue, concentrating their time on the transactions that genuinely require judgment.

Multi-Entity Hierarchy and Portfolio-Level Visibility

KriyaBalance operates natively across multi-entity structures. Property-level reconciliation, entity-level reporting, and the consolidated portfolio cash position are available on a single platform without exporting data to aggregation spreadsheets or running separate reconciliation instances for each property.

Real-time visibility into cash position across the portfolio enables finance leaders to monitor collection patterns, identify property-level cash flow issues, and make treasury decisions based on live data rather than the prior month's reconciled position.

Escrow and Trust Account Management

Trust accounting is a core capability in KriyaBalance, not a configuration option. Escrow account management with automated trust accounting compliance is built into the product's real estate-specific capability set. Security deposit accounts are tracked against tenant liability schedules. The audit trail that supports regulatory compliance is maintained automatically throughout the year.

Native Integration with MRI Software

KriyaBalance features deep integration with MRI Software, including bi-directional connectivity with the MRI X platform. Reconciled transactions post directly and in real time to the MRI environment. Discrepancies identified during reconciliation surface within MRI without requiring a separate notification workflow. The reconciliation and the property management ledger stay synchronized.

This integration eliminates the manual re-entry step that represents a significant portion of reconciliation labor in MRI-based property management environments, the process of taking a reconciled position from a separate bank rec tool and posting it back into the PMS.

Access Controls and Reporting

KriyaBalance includes multi-factor authentication and role-based access controls for enterprise-grade access management. Power BI integration supports sophisticated financial analysis and investor reporting within the platform.

What Finance Teams Experience After Implementation

KriyaGo reports consistent operational outcomes across the property management firms using KriyaBalance:

• Portfolio management companies report a 90% reduction in reconciliation time while eliminating manual errors that previously required thousands in audit corrections

• Commercial real estate firms achieve same-day close capabilities, and real-time reconciliation removes the period-close lag that manual rec processes create

• Multi-entity operators streamline reconciliation across hundreds of bank accounts with automated property-level matching and consolidated reporting

• The typical payback period is under six months through efficiency gains from the automation

The common thread across these outcomes is this: finance teams stop spending their time on transaction-matching work that yields no insight and can be automated and start spending it on analysis and decision support that actually requires their expertise.

The Accuracy Standard

KriyaBalanceachieves 99%+ matching accuracy across real estate transaction types, including partial payments, CAM reconciliations, consolidated deposits, and intercompany transfers. The confidence scoring system ensures that transactions reaching human review are genuinely ambiguous, not failures of the matching engine.

Key Takeaways: What to Look for in a Property Management Reconciliation Platform

If you are evaluating bank reconciliation automation for a real estate portfolio, these are the criteria that distinguish purpose-built platforms from general tools configured for property management:

• Multi-entity native platform must operate across entity hierarchies without requiring separate reconciliation instances per property or entity

• Real estate transaction intelligence, partial payment matching, CAM transaction recognition, and consolidated deposit parsing must be built-in capabilities, not exceptions requiring manual resolution

• Direct bank connectivity live API feeds to your actual banking relationships, not batch export/import processes that introduce latency

• Trust account compliance escrow and security deposit accounts must be first-class objects in the reconciliation model, with audit trail completeness maintained automatically

• Property management system integration, bi-directional, real-time posting to your core PMS, so reconciliation and ledger stay synchronized

• Confidence scoring on exceptions human review time should be focused on genuinely ambiguous transactions, not on systematic failures of the matching engine

Generic tools fail on most of these criteria, not because of poor engineering, but because they were built for a different problem. Real estate bank reconciliation requires a platform that was designed for how property management finance actually works.

See Kriya Balance With Your Own Account Structure

We will show you exactly how KriyaBalance handles your reconciliation scenarios, partial payments, CAM transactions, trust accounts, and multi-entity roll-ups using your actual data structure. Not a generic demo.

Book a KriyaBalance Live Demo at kriyago.com/kriyabalance

Frequently Asked Questions

What is automated bank reconciliation for property management?

Automated bank reconciliation for property management is the process of matching bank transactions to property ledger entries using AI and machine learning, rather than being done manually. A purpose-built platform understands real estate-specific transaction types, including partial tenant payments, CAM reconciliations, security deposit activity, and multi-entity intercompany transfers. It handles them without requiring manual exception resolution for every non-standard transaction.

Why do generic accounting tools struggle with real estate bank reconciliation?

Generic reconciliation tools are designed for simple one-to-one transaction matching in single-entity businesses. Real estate reconciliation involves partial payments, multi-tenant consolidated deposits, CAM billing-cycle receipts, trust-account compliance requirements, and multi-entity structures requiring many-to-one and partial-match logic. Generic tools lack context for these transaction types and produce large exception queues that require manual resolution, which defeats the purpose of automation.

How long does bank reconciliation take manually in property management?

KriyaGo, based on the operations of property management firms using KriyaBalance, reports that manual bank reconciliation typically consumes 40–60 staff hours per month. This reflects the multi-account, multi-entity, multi-transaction-type complexity typical of property management portfolios. KriyaBalance reduces this to minutes through automated matching.

Which banks does KriyaBalance connect to directly?

KriyaBalance has direct API banking partnerships with Wells Fargo, Signature Bank, and TD Bank (United States), and native integration with TD Bank and RBC (Canada). For broader North American and European coverage, Plaid and Yodlee extend connectivity across those markets. Australian operations are served through a Basiq integration covering the Australian banking ecosystem.

How does KriyaBalance handle trust and escrow accounts?

Escrow account management with automated trust accounting compliance is a core KriyaBalance capability. The platform tracks security deposits and escrow accounts against tenant liability schedules, automatically maintaining the audit trail required for regulatory compliance. This is a purpose-built capability for real estate, not a standard feature of general reconciliation tools.

Does KriyaBalance integrate with MRI Software?

Yes. KriyaBalance includes deep integration with MRI Software, including bi-directional connectivity with the MRI X platform. Reconciled transactions post directly to the MRI environment in real time, and discrepancies identified during reconciliation surface automatically within MRI. This eliminates the manual re-entry step between a separate bank rec tool and the property management system.

What is the typical return on investment for KriyaBalance?

KriyaGo reports a typical payback period of under six months due to efficiency gains from automation. The ROI reflects both direct labor cost reduction from 40–60 hours of manual reconciliation per month to minutes and the elimination of the $15,000 average cost of reconciliation errors that KriyaBalance clients were previously experiencing.

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7 Most Common Real Estate Accounting Mistakes to Avoid

Fri, 05 Aug 2022 09:00:00 -0400

The real estate business is tricky and volatile, to say the least, if you add bad accounting particles to this mix, then it gets even more complicated. It can end up costing you millions and also cost you your reputation as an authentic real estate business.

Accounting and back office are not the first things that real estate property managers think about. It is almost like an afterthought for most. But part of knowing the insides of your business lies in accounting. Why? Simply because accounting forms the backbone of your real estate business. From payments, cash flow, basic finances, budgeting, everything depends on your accounts. Though this might be uninteresting work, it can make or break your business, to say the least.

7 common mistakes to avoid in real estate accounting

You need to start from scratch when it comes to accounting. You need to get a better understanding of accounting in general and the specific accounting needs of your system.

There are an umpteen number of mistakes that businesses commit along the way. Though these are very gross mistakes and seem negligible to the naked eye, they make up a very faulty system. So, how do you not let accounting become a big issue? What signs should you look out for? Here are the most common mistakes that real estate businesses make in their accounting process. Read on to know in detail.

1. No proper data classification in departments

Classifying financial data in real estate can be tricky. From separating capital expenditure from normal maintenance and repair costs, there can be a lot at stake. Discrepancies in these data can also send wrong indications to auditors and tax departments. This is exactly why you need to clearly divide data based on departments and expenditure types.

It is also crucial that you back up these data in a cloud platform. Why? Studies say that more than 40 - 60% of small businesses close down permanently after a complete data loss. A real estate firm of any size deals in millions and has multiple stakeholders to answer to. If you lose crucial financial data you will set yourself up for bigger problems. So set up the safety net of cloud data backing to avoid this.

2. Incorrect financial record keeping

If you are a real estate project manager or business owner loans are essential for construction work. But if you do not have your financial records straightened out then no banks and financiers will disburse loans to you. It will eventually delay your work and affect the credibility of your business. It is in the best interest of your company to keep the financial records healthy to avoid such scenarios.

3. Disbursing funds before deliveries & services are finished

It is quite an informal but known practice where real estate agents release trust or escrow before official confirmation. You might be dealing in good faith with your long term clients and vendors by disbursing funds based on word of mouth. But it is also an open avenue to initiate fraudulent payments. If not that renegotiations can also take place at the last moment and the actual commissions may end up changing. This difference in amount may cause a problem during month-end book closing.

4. Not separating personal and business bank accounts

The real estate business has a sort of personal touch to it when there is client handling. Buying, selling, renting homes is bound to have that when real humans are involved. But some real estate managers end up mixing the personal and professional even in their accounts. It causes confusion and is financially unhealthy for all parties involved. This will only lead to jumbled up bookkeeping at the month-end. You will need to manually scavenge through your personal and business bank accounts to add up your transactions and close the books.

Separating the accounts will also save you from other audit liabilities, tax problems and legal issues.

5. Failing to keep up with tax filings

Filing taxes on time and following all regulations will benefit you by staying in the good books of the IRS. If you fail to keep up with these you will be liable to fines and penalties, eventually losing out on a lot of money.

6. Not having experienced accounting staff

When there are budget issues sometimes real estate companies use staff from other departments to do the accounting. But accounting is a highly skilled job. The overhead cost of having your own expert accounting team is expensive and can burn a hole in your pocket.

This is where KriyaGo’s outsourced bookkeeping services can help you. Our team of professional accountants can streamline the work and flag all discrepancies and close the books on time. More than 24% of small businesses get outsourced help to ease their work. You need to take inspiration from it and outsource your back office work to save more than 60% in costsand time.

7. Trying to track commissions separately

If you track and check commissions separately from other account works then you are simply doing the same data entry twice. You are wasting manpower and spending money on it. Multiple data entry only sets up your system for more human errors. You need to merge your commission tracking and accounting system. You can effortlessly track what is owed to which agent and also avoid all data overlap.

Final Thoughts

In the present world, there is enough technology out there to make accounting work easy for your real estate business. As a real estate property manager, you just need to know which works best for you. A good technology selection in property management and accounting can help in your growth.

The KriyaGo team of expert accountants and technology consultants can do that for you. Do not let the monotonous office work get to you. Our outsourced accounting services will get the tedious accounting work done for you. Our team of experts have been solving accounting problems for clients for years and have helped them save both money and labor. Book a consultation with us to know more about our services.

7 Common Cyber Security Threats to Small Businesses and Accounting Firms

Tue, 12 Jul 2022 11:07:00 -0400

Security threats are not new in businesses across industries, and these breaches take a major hit on a company's financials. A T ripwire news report on an IBM security study points out that each incident of security breach costs companies about $3.92 million per incident. These cost a lot of money, and it grows a good 15% every year. IT experts believe that it will cost the world $10.5 Trillion annually at this rate.

Any security threat can be catastrophic and even harder for a small or medium business to recover from. So, no matter who your outsourced accounting service provider is, you need to be aware of these cyber security threats to identify them before they wreak havoc on your business. Read on to know more.

Why is security threat a concern in accounting?

The side effects of a security threat are endless. They have a significant effect on accounting because your financials are involved.

Losing your financial information

The most obvious target of any hacker is to get your financial records, tamper with them and drain out your money or conduct unauthorized payments. In such cases, they also get full access to your financial statements and can gain complete control over your business process overview.

Tampering business strategies and trade secrets

Once the hackers have the details of your accounts, they can quickly figure out your transaction history and related customer history, trade secrets and your company’s budgeting and forecasting can go haywire. Your spending becoming public can come in handy to your competitors in figuring out your business strategies and best you in further growth.

Look for for these 7 security threats

With a great selection of technology in project management and business process, all workings now happen on the cloud. They come with their own set of threats. Check them out.

1. Outdated software usage

No matter how much money you put into planning your business process overview, it is redundant without the latest selection of technology. Outdated software used to manage your business can lead to a lot of data threats and cyber security problems. If the software is not timely updated and does not have security layers to fight the latest bugs and viruses, then all of your systems are at risk. That is why you need a software integration partner who ensures periodic software updates take place for top-notch security. According to the Symantec Internet Security Threat Report, in a month, more than 4818 websites are attacked by cyber threats, and your software partner needs to take that seriously.

2. Spyware and ransomware attacks

Spyware is a type of malicious software that is camouflaged in the system and becomes a threat when you try to extra sensitive information from your system. It always works in the background without your knowledge and can collect all information about your credentials and financial details.

It is a very threatening virus which blocks your access to your data in no time, and it also stays hidden in the background like Spyware. Health IT Security reports say that 71% of Ransomware attacks primarily target small businesses, and you need to take that into account while setting up your cyber security system. This mostly happens because small businesses hardly spend any money to back up their information on cloud storage, and this ransomware attack can lead to permanent data loss.

3. Phishing attacks

This is one of the most common yet most dangerous security threats. Proof Point market survey reports said that in 2019 more than 88% of all companies across the world faced phishing attacks. These primarily work with fake emails or messages to which fraudulent links and information are attached. Once any of your employees click on these links, they can lead to monetary loss, data loss, financial history tampering, etc.

It is sometimes tough to catch these phishing attacks because these emails and messages are very close copies of the originals, and it takes a very detailed eye to catch them. Phishing scammers can also easily duplicate your financial documents and use them for later purchases and transactions in your names, becoming a long-term threat.

4. Weak passwords and human errors

Trace Security reportshave pointed out that more than 81% of data breaches in companies happen due to weak passwords. This is a matter of concern because companies keep a simple password for it to be easily accessible for all stakeholders, but in the end, it can lead to some real damage to your accounting and business information. Human errors can play a substantial part in generating these weak passwords. So, you can consider using a random password generator to constantly keep changing and updating your password to avoid such incidents.

5. Denial of service (DoS) attacks

Denial of Service (DoS) attacks are ones where cybercriminals gain access to your office system and deny the present users access to their own information. It floods the whole server with endless emails requesting access till the time the website denies access to all stakeholders involved, denying you access to your own financial information. These websites are then taken over by cybercriminals and used for other phishing activities and financial scams.

6. Insider threats from employees

If you have a bring your own device policy at the office, it can be a major threat to your cyber security. They have first-hand access to all your sensitive data and can choose to use them to manipulate your finances at any time. IBM Research also found out that more than 60% of companies suffered at least 20 cyber attacks in a year due to insider threats.

7. Halt and catch fire

There are methods in which sometimes cybercriminals use advanced technology to self destruct your files or information on your system. These are threats that do not lead to any information being leaked, but they are instead destroyed. These threats are not that common, but they still happen nonetheless.

Consult with IT outsourcing service partners

There is a constant increase in the number of cyber security breach issues due to the advancement of technology; these can gravely affect your finances and accounting work. That is why you need to team up with the right IT outsourcing partner who provides the best cyber security and keeps all your data safe.

At KriyaGo, we train our staff with the best security protocols and update our systems with the latest software to ensure the best cyber security in handling your back office accounting work.

Want to find out more about our work? Call us soon!

7 Mistakes You Should Avoid While Automating Your Accounts Payable

Wed, 13 Apr 2022 10:00:00 -0400

Amidst the pandemic and the sudden growth of tech use in business, companies across the world are automating their back office work. From cutting costs to getting faster results, an automated system can have a lot of advantages. One of the biggest areas of interest is the automation of Accounts Payable (AP) to avoid loss of funds and monetary discrepancies from human errors.

According to Business Insider, anautomated Accounts Payable process cuts costs by 81%.That is some big savings to push you towards automation.

Maybe your business is actually ready to take the first step towards automating your Accounts Payable system. But there are multiple pitfalls in the process that you might not be prepared for. These might actually turn out to be really costly mistakes when it comes to the future of your company.

7 mistakes you must know about while automating your Accounts Payable

What exactly are these pitfalls that can become grave mistakes? How do you know them and make plans to avoid them? Worried about the next steps? Read on to get a better grasp of the situation.

1. When you don't know your "must-haves"

It is a great development that you plan to automate your accounting system. But do you have a list of what you actually want to gain out of an automated accounts system? If you do not know how an automated AP can benefit you, and you are starting it to get in trend. Then you are in for a real loss.

What to do about it?

Make a detailed cross-departmental checklist. You need to highlight your goals from an automated AP. You also should know your “must-haves”, the features you want your automation system to have. This will help ease the way forward.

2. Not adding up the present cost and time used in manual AP

You must know what time, labor and money that was spent on manually doing your AP before you go into an automated solution. Why? This will help you understand what kind of software you need and the impact of automation on your ROI.

Guess what? Data says the US companies which have an automated AP save as much as 71% more on time.

What to do about it?

Make a detailed study, cross-check all data internally. Understanding these will help you be at a point of advantage when you negotiate with an automation software provider.

3. Poor technology selection

Data says companies pay more than $9 per manual invoice and only $1.77 when AP is automated. But choosing the wrong technology solution for your business will leave you with a bad system and draining funds.

What to do about it?

From the ease of use and also analysing to see if the automation software is compatible with other software in your system. You need a good selection of technology in project management to do this.

The KriyaGo accounting professionals have years of experience in this field. From the best technology selection and customisation for you to leveraging this for growth, we do it all.

4. Not planning the future needs of the software integration

If you spend money to integrate software into your system then its use is not just for today. Your future business plans will also bank on this. If you do not follow a proper work structure, you will never know what your business's actual needs are.

What to do about it?

You must have the right roadmap for your business. Then only will you understand if your software is good enough to keep up with your business scaling plans. As your small business starts getting more clients, invoices and data is bound to increase, you must ensure that your automated system can handle that.

5. Not having all employees on board about automation plans

It is a major blunder to not have all stakeholders of the company agree to your automation plans. This is an inter-departmental system and their cooperation is crucial for a seamless operation.

What to do about it?

Individually talk to all members and get valuable insights on your automation plans. Understand the needs of other departments that might indirectly help in bettering your AP process. Address their concerns directly and give them a detailed understanding of your plans.

6. Not red-flagging fake invoices

It is a major mistake to get an automated AP system that doesn’t identify and alert you on fake transactions. Research believes that more than 50% of small businesses are at risk of getting fake invoices and eventually making extra payments.

What to do about it?

Get your AP software vendor to make you understand their fraudulent invoice identifying process. If you get outsourced accounting services to automate your AP you can hold them accountable. You can even get it customised to fit your requirements.

7. No clear invoice screening and payment process

Vendors and suppliers have innumerable ways to send invoices, from physical mails to handwritten sheets of paper and even e-invoices. Your automated system must have a screening and payment process for all kinds of invoices. Otherwise, you will be left with a jumbled system of doing half the work manually due to some incompetent software.

What to do about it?

Plan out the invoicing system in your organisation. Either get all your vendors to sign up for e-invoices (which is almost impossible) or get a customised automated AP provider who will process all kinds of invoices.

Final Thoughts

More than 44% of businesses are now looking to automate their AP process. This will help them cut costs and save time. But you must know your needs and prospects inside out to make a sound purchase.

You can avoid these mistakes by getting outsourced accounting services from KriyaGo. Our team already has access to all the platforms you need, you can simply leverage the ones that work best for you to get your work done. Book a call with the expert consultants of KriyaGo. Talk to us today, help us help you grow your business by automating your Accounts Payable system.

The Surprising Truth about Outsourcing Property Management Accounting

Wed, 23 Feb 2022 09:00:01 -0500

Managing a property is no easy task. You have to take care of endless responsibilities that include maintenance, coordinating with vendors, paying staff on time, and more.

Each property you manage brings more tasks to the table and can soon overwhelm your time. The situation is more common than you think and haunts countless businesses in real estate.

On top of that, agencies have to attend to back office duties and accounting.

As a result, things can go out of control and leave you in the lurch!

Outsourcing your property management accounting

Outsourcing has remained a top solution to achieve business growth. Over 1/3rd of small US businesses outsource a range of functions to chosen partners in different countries.

Real estate agencies can also outsource their back office tasks like property management accounting. It can free up your staff and help you deal with your priorities.

Best of all, accounting is one of the top functions to be outsourced. According to the US Small Business Administration (SBA), it is a perfect option for bridging a talent gap.

That means you don’t have to be a financial expert or even handle your books. In addition, you don’t need to invest time to learn accounting standards or tax rules.

Instead, you can outsource your accounting process and enjoy more efficiency. Moreover, you can take advantage of several perks that are mentioned below.

Ensure business continuity without exception

Businesses can experience a range of disruptions. We don’t have to look far to find an example for what we are saying.

All of us have gone through the pandemic that strained supply chains around the world. As a result, several businesses downed their shutters and stopped operating.

Those who survived were still dealing with inconsistent orders and increasing costs. The matter became so worse that many companies feared their existence.

Outsourcing can be a great option to sail the troubled waters during difficult times. It can take the load off your shoulders and give you space to focus on what’s important.

Therefore, you can delegate your property management accounting and free up your resources. Maybe it’s the reason business continuity was central to outsourcing in 2021.

Lower costs and operating expenses

Cost has always been a top priority for outsourcing back office accounting. Real estate agencies can save a whole range of expenses just by working with an adept outsourcing partner.

What type of costs can you curtail by delegating your accounting?

The first major expense you can save is on recruiting new employees. You don’t have to spend any resources to hire, screen, or interview accountants or bookkeepers.

In addition, you don’t need to pay any regular wages, bonuses, or incentives. There is also no need to offer retirement plans or any type of benefits.

Moreover, you don’t have to rent or lease office space or provide supplies. You can also save on overheads and paying utility bills.

As a result, a business can save 60% of overall costs by choosing to outsource.

Scale your business without restrictions

The demand for real estate is expected to surge in 2022 as we get back to normal. As per Deloitte, 80% of real estate agencies expect to earn more revenues next year than in 2021.

As a result, experts are predicting more demand for commercial spaces in the coming days. Firms can add more offerings to their portfolio to grow their business.

However, many firms are afraid to take advantage of the situation due to a lack of manpower. They don’t have the additional staff to take care of the accounting that comes with each new building.

Yet, there is a simple way to address the whole scenario, i.e., outsourcing. It can eliminate the need to hire additional staff by delegating any extra workload.

In addition, you also don’t have to spend time training your staff.

Instead, you can work with a reliable partner like KriyaGo to access expert accountants. We can provide you additional workforce as you grow your portfolio.

There is no need to wait as you can scale instantly to meet increased demand.

Boost productivity of existing employees

Your back office handles a wide range of tasks every day. The list includes coordinating with third-party service providers, maintaining records, assessing customer feedback, and more.

Along with that, they have to work on administrative tasks and property management accounting. Back in 2017, businesses spent 120 days per year on average working on such tasks.

Now, we have automation to save time, but many firms still rely on paper processes. As a result, they lose out on productivity by wasting countless hours every week.

Outsourcing can be an excellent technique to reduce workload for your existing employees. You can free up essential hours for each employee to be spent more productively.

For example, your back office can coordinate between your sales and marketing departments to convert more leads.

In addition, you will be able to streamline your processes and save more effort.

Choose your property management accounting outsourcing partner wisely

Outsourcing your accounting process is a proven way to boost productivity and efficiency. However, you need to join hands with a proficient partner for the best outcome.

KriyaGo is a leading choice of real estate agencies worldwide to outsource property management accounting. We have a team of adept accountants who have years of experience in working in residential and commercial real estate.

Therefore, you can access top expertise and take advantage of our proven processes. We can help you improve the accuracy of your books, lower costs, and gain more control over your expenses.

Final thoughts

Outsourcing is a proven method to reduce your workload and focus on your core activities. Real estate agencies can outsource their project management accounting to free up time and resources. It can also boost productivity and help you achieve efficiency in your processes. Best of all, you can stay free to scale your business up or down based on market demand.

Real Estate Back Office Accounting: Top Mistakes to Avoid

Fri, 18 Feb 2022 15:00:00 -0500

Most real estate agencies rely on their back offices for day-to-day accounting. The list of tasks covers a wide range of verticals, from vendor payments to employee reimbursements.

As a result, the back office requires considerable resources and hours to do its job efficiently.

However, most real estate’s back office accounting is in a mess. The department is riddled with inefficient processes and workflows that take a toll on productivity.

Therefore, you need to be aware of the top back office accounting mistakes that can haunt your agency. Below, you will find the most applicable mistakes that modern real estate back offices make.

Relying on Manual Data Entry

Back office accounting in any industry involves dealing with a lot of data. Unfortunately, real estate agencies are still using paper processes or spreadsheets for the process.

As a result, they have to deal with huge volumes of manual data entry that take a painstakingly long time.

In addition, manual data entry leads to errors. Research shows the probability of human error is 18% to 40% while recording data into a simple spreadsheet.

For complex data spreadsheets, the probability jumps to 100%.

It is not easy to rule out manual data entry so easily. However, brokers should make an effort to automate as much of the process as possible.

For example, integrating your existing tools can be an excellent way to automate data entry. You can capture invoices from your property management tool and have the data recorded in your accounting software automatically.

The process saves time and improves data accuracy. Additionally, you can look forward to a boost in productivity.

Not Giving Up Manual Accounting Processes

This is a continuation of the mistake we discussed above. 63% of businesses today still work with spreadsheets and manual accounting processes.

Needless to say, the consequences are more than the risk of human errors. The list of dangers includes wastage of time, money, and resources.

In addition, it increases the potential for fraud and invites financial risks. Moreover, you can expect your audits to get more complex and expensive.

Worst of all, you will experience a massive challenge to scale your manual accounting processes. As a result, it may even restrict your business growth.

The need of the hour is to digitize your accounting processes. Choose the right tools that align with your needs and help you achieve your business objectives.

Then you can enjoy a hands-off approach for back office accounting tasks like matching invoices or bank reconciliations.

Accounting at the End of the Month

Most real estate agencies will wait till the end of the month to complete accounting. Most probably your back office staff will spend the last day of the month reconciling expenses and matching books.

This approach may get the job done but is not ideal if you want to operate efficiently.

Waiting till the end of the month to do your back office accounting lowers your financial visibility. You cannot be sure of your cash flow or where your money is going.

Therefore, you cannot make accurate financial predictions and risk losing out to the competition.

As a result, you should aim for real-time accounting. Record your debits or credits as they happen so that you have complete visibility into your financial position.

You can also use a wide array of tools like a spend management solution to facilitate real-time accounting.

Not Analyzing your Financial Data

As noted earlier, real estate back office accounting manages a huge volume of financial data. The information may include vendor payments, SaaS expenses, wages, cost of services, and more.

However, most businesses don’t utilize or make the most of this data. They don’t use it for financial analyses to cut costs or maximize value from their procurement.

As a result, they miss out on wonderful opportunities to improve profitability or their bottom line.

Therefore, analyze your accounting data periodically to sport patterns and trends. You can then assimilate your findings to generate vital insights.

Many accounting or spend management tools come with advanced analytics. They provide readymade insights for you to leverage. You can also customize your solution to track specific data and make more informed financial decisions.

The returns are guaranteed, as data-driven businesses are 3-times more likely to experience improvements in decision-making.

Not Making Timely Payments

The real estate industry works with a wide range of stakeholders. Construction companies, security agencies, software vendors, material suppliers – the list is almost endless.

Undoubtedly, your stakeholders impact the performance of your business and productivity. For example, strained relationships with a supplier might affect your supply chain and delay your time to market.

In this regard, most real estate back offices struggle with payment processing. The staff often has too much to handle and not enough resources to work efficiently.

As a result, late payments are common in real estate. Most agencies fail to pay their suppliers or vendors on time, risking the business relationship.

Therefore, make an effort to make timely payments and aim for real-time payment processing. You can rely on a digital solution to automate the process and boost productivity.

Working with Poor Talent

Back office accounting comes as an afterthought to many brokers. As a result, they don’t hire the right talent for their daily bookkeeping.

They want to save costs and work with a skeleton staff to just get the job done.

Needless to say, such an approach means more risks for your business. You can never be sure of the accuracy of your financial records and reports.

In addition, you will miss out on the skills of an expert accountant that hampers your accounting processes.

Therefore, never compromise on skills and experience.

Final Thoughts

Back office accounting can be a challenging task to handle. It may be a better decision to outsource your accounting needs to a reliable partner like KriyaGo. We have the best team of bookkeepers and certified accountants to make a difference. Our team will take care of your day-to-day accounting and provide solid guidance to gain a competitive edge. Contact us today to know more.

Back Office Accounting and Common Misconceptions

Fri, 04 Feb 2022 12:34:34 -0500

An efficient back office is behind every successful company. It has a big impact on your business operations and how well you can achieve your objectives.

As a result, it is necessary to give a hard look at your back office operations. It is more important than you think and decides your performance, irrespective of the industry.

Today, we will explore top back office accounting misconceptions that are holding back your growth. Let’s start with a basic myth that many entrepreneurs still entertain.

Back Office Equals to Data Entry

Many people confuse back office responsibilities with data entry. However, that is a big mistake.

Data entry refers to entering data into computer systems. It is also possible to automate the process using a range of technologies.

The back office, on the other hand, is a whole department. There are several roles tied with vital responsibilities like:

Handling calls and emails from tenants
Coordinate with contractors for maintenance tasks

Manage documents relates to leases, tenants, insurance claims
Maintaining accounts, preparing financial reports, preparing taxes

Therefore, back office operations are more expansive than data entry. They support your day-to-day activities and form the backbone of your company.

All I Need is Accounting Software

50% of businesses today rely on accounting software to balance their books. However, can you run your whole back office with just an accounting tool?

Some realtors may feel their accounting solution is enough to manage back office accounting. However, that is not the right way to think if you want to achieve business growth.

Accounting software helps streamline the tasks of your back office accountants. It is also ideal to automate repetitive tasks and boost productivity.

But sadly, an accounting tool cannot replace your back office accounting processes. They will always need human judgment and analysis for tasks like:

Interpreting numbers and making sense of them
Identifying opportunities for cost savings

Implementing accounting best practices
Conducting risk analysis
Forecasting

As a result, you will always need humans to run your back office. However, the duties they handle will vary based on your industry and business size.

Back Office Operations are Really Simple

Many entrepreneurs make the mistake of oversimplifying back office duties. Sure, your back office processes can seem simple if you have a small real estate agency. You may even be able to handle all your operations with a few people.

However, that is not the reality, especially for big businesses.

For example, the back office generally handles payroll calculations and taxes. The process may seem straightforward but has endless hidden nuances.

Did you know the IRS penalizes 1 out of 3 businesses annually for payroll errors?

To avoid such penalties you have to consider several factors like:

State and federal labor laws
Pay schedules
Minimum hourly wages
Overtime rates

In addition, you need to maintain comprehensive payroll records to comply with IRS regulations.

Therefore, back office operations are more complex than you think. You need the right expertise and skills to ensure you can run your back office efficiently.

For this reason, many entrepreneurs choose to outsource their back office processes.

Back Office Accounting is Expensive

There is a general misconception that accountants are expensive. The same notion exists in many real estate agents who view back office accounting as a costly affair.

However, it is up to you how you look at things.

Back office accounting can cost money but also provide more than adequate returns. Moreover, an efficient back office can help you cut costs and optimize value from every vendor.

Consequently, inefficient back offices can incur more costs than you can imagine. Fortune 500 companies lose out $480 billion each year due to back office inefficiencies.

Therefore, your back office operations impact your profitability directly. You have to spend a bit of money to ensure you can run your back office accounting like a pro.

Paper-Based Back Office Accounting Saves Money

Your back office is in charge of processing invoices and disbursements. They may also handle claims from employees and reimbursements.

Unfortunately, many real estate agencies still rely on a paper process to manage invoices. They don’t want to invest in technology for fear of cost.

However, that can be a sad mistake.

Research shows it takes around $12.90 to process one paper invoice. Now, think about the cost if you process dozens or even hundreds of invoices every month?

In addition, think of the possibility of manual errors and the cost of rectification. By the end of the year, the whole process can add thousands of dollars to your expenses.

Instead, a better choice is to use technology to manage and automate your paper processes. You will be able to reduce inefficiencies, speed up processing, and save more.

Plus, your back office will have more free hours to conduct market research and support front-line operations.

You Should Not Outsource Back Office Accounting

Outsourcing your business processes can have a remarkable impact on your bottom line. Yet, many realtors are afraid to outsource their back office processes as they fear:

Losing out on control
Compromising confidentiality of data

Barriers in communication
Hidden costs and terms
Delays

However, these concerns do not have any solid ground. Many businesses are enjoying more freedom and optimum returns by outsourcing back office operations.

In fact, accounting is one of the most common businesses processes to be outsourced. Its market size is predicted to grow from $36.9 billion in 2020 to $51.5 billion by 2027.

Therefore, real estate agencies can outsource back office accounting without any concern. They will be able to improve efficiency and get more free time to focus on growing their business.

Final Thoughts

The back office is a crucial part of every business. You cannot hope to run your business and earn a profit without the support of the back office. As a result, it is necessary to have the right information that helps you optimize your back office processes. In addition, real estate agencies can outsource their back office accounting to reputed partners like KriyaGo. Contact us to know how we can help.

Common Lease Abstraction Issues and How To Solve Them

Fri, 03 Sep 2021 09:00:00 -0400

Leases are bulky but essential documents in every real estate business. These documents carry important clauses, making lease management even more difficult. Reading leases every time a tenant wants to sign them can be time-consuming. Instead, lease abstracts serve as a summary of the original document. These abstracts contain important clauses which make them easier to understand.

Even though they sound simple, lease abstracts are complicated to prepare. Since they represent the lease, abstracts need to be accurate and contain all the details. If you want to prepare lease abstracts for your properties, our guide on how to solve the common lease abstraction issues will help you.

Why are lease abstractions important?

Lease abstractions are not mere summaries of leases but also have numerous benefits for the real estate business.

Easily explains lease terms to tenants. Tenants can skip reading the bulky lease and choose the abstract which contains the extract of the same information.

Improves investment by providing information to calculate risk factors. Lease abstracts collect all information in a single place that lets you study it easily and determine market risks.
Determines values of the portfolio by collecting relevant information.
Lease abstracts are easier to present to clients. They can go through and understand your property management process without reading complex clauses.

Typically, a lease abstract is about 3 to 5 pages long. To condense the lease within these limits, employees have to face numerous challenges.

Common lease abstraction issues

Compliance with lease accounting standards

The Financial Accounting Standards Board (FASB) has released new lease accounting standards. This has set new guidelines for lease data management, making abstractions more complex. Real estate companies without organized data management plans find it difficult to meet these new guidelines.

Lease abstracts need adequate data to comply with the new standards. But many real estate businesses lack the storage and information to ensure FASB compliance. This can be a significant lease abstraction challenge. If the abstract doesn’t comply, then the business can face legal consequences. Adding to it, FASB standards also change from time to time, which means the leases need to be updated.

Bulky documents

Bulky lease documents and complex terms are the hardest to abstract. Since lease abstracts need to be short, you have to find important clauses from the document while making sure nothing is left out.

The real estate industry also uses traditional methods even if it is slowly upgrading to technology. So, most leases are manual work that requires employees to study them extensively to prepare the abstracts.

Moreover, disorganized data requires employees to scour through multiple documents to obtain the required information.

Extracting important data

Identifying which clauses are important is another challenge of lease abstractions. Bulky leases have more important clauses but the abstracts still need to be short. It is a task to summarize bulky leases by filtering additional information.

A lease abstraction typically includes:

The property address and basic tenant information.
Rent and security deposit information.

Any information regarding tax, maintenance, and CAM.
Lease renewal and termination clauses.
Lease termination clauses

Apart from these, any other information that can impact tenancy should be included in the abstract. Companies that do not create and store leases online face difficulties while recovering relevant data for their business. Excluding even a single important detail in the abstract can have a negative impact on tenants.

How to overcome these challenges?

Lease abstracts are challenging. But with the right resources, you can create accurate, legally complying abstracts. The below solutions help you clear your lease abstraction issues and also create better abstractions.

Use the latest technology

Lease data management is the basic challenge property managers encounter during abstractions. If you manage leases on paper or spreadsheets, then it is time to upgrade to new technology. According to Market Watch, 88% of spreadsheets have errors. Instead, you can use specific software to organize and manage data.

You can choose off-the-shelf software that is designed to suit most businesses. Or, you can integrate multiple software on a single platform, which lets you customize the software according to business needs. Companies like KriyaGo help integrate top property management software so you can leverage all the features in a single place.

Update lease data

Currently, leases are made in compliance with the FASB standards. As times change, these standards are also continuously updated. Though lease abstraction is a one-time process, it needs to be regularly updated with the latest information. This is to ensure that you are legally safe and disclose all the information as directed by law.

Tag the abstracts

Lease abstracts have their origin in the lease documents. If you are making leases online, then it is easy to tag any important terms and clauses in the abstract. This will help you look up the clause in the lease.

By keeping track of what information goes on the abstracts, you can also change them according to standards. Bookmarking also helps you review and remake abstracts, in case they are too long or short.

Outsource lease abstractions

The best way to create perfect lease abstracts is through outsourcing. Managed service providers have expert employees with relevant work experience. These experts identify important clauses and create lease abstracts suiting your requirements. They can also update leases from time to time and keep track of any changes in the FASB standards.

Outsourcing lease abstractions can also help you save money while ensuring quality. Good abstracts have a positive impact on tenants and help you build a better brand image.

Create perfect lease abstract with KriyaGo

Can’t manage the bulky paperwork? Let KriyaGo handle it for you! Our experts have relevant experience in creating lease abstractions for real estate businesses. Regardless of the size of your business, we can strategize and help you with lease abstractions and administrations. We also help our clients with back-office accounting and CAM reconciliation.

KriyaGo also integrates real estate software to create bespoke software for businesses. Whether you want better CRM software or want to organize your data, we have the right tools for you. Integrate more solutions and streamline productivity the easy way. Take a look at KriyaGo Blox today!

6 Reasons To Outsource Your Back Office Accounting

Wed, 01 Sep 2021 09:00:00 -0400

The real estate industry deals with a large number of transactions every day. In 2020 alone, 5.64 million existing homes were sold in the US. These transactions also vary in magnitude from huge property investments to small maintenance expenditures. That’s why accounting and bookkeeping play a major role in real estate.

As a property manager, producing accurate financial reports and maintaining internal records are top accounting priorities. Most of these real estate accounting functions can be effectively outsourced to experienced service providers. Apart from the cost and time benefits, we list the top reasons why you need to outsource your real estate accounting.

Issues with hiring an internal accountant

Today, more companies are outsourcing their accounting and bookkeeping services. And that’s because they find it more convenient and cost-effective.

Even though hiring an internal team is an option, companies can face significant issues such as:

Real estate businesses need reliable accounting to deal with continuous transactions. With an in-house team, financial tasks can suffer due to leaves, absences, and staff turnover. According to a 2021 report by Inc., 52% of employees plan to look for a new job this year, leading to a mass employee turnover.

Training and inducting new hires can be expensive. An ATD report says that employers spend an average of 33.5 working hours and 1252 USD to train new employees.

Hiring in-house accountants increases your risk of employee fraud. In a survey by ACFE, more than three-fourths of occupational frauds were conducted by employees in key departments like accounting.

Outsourcing property accounting is one of the best ways to deal with these issues. It is reliable, cost-effective, and more secure. Among the companies that outsource, 78% report being happy about the results. If you are still skeptical about outsourcing real estate accounting, then here are the top reasons why you need to do so.

Acquisition of expertise

Any financial service heavily relies on accuracy. For property accounting, your data needs to be handled by skilled accountants. According to experts who spoke to The Ladders, the lack of quality candidates is one of the top challenges of hiring an in-house employee.

Instead, you can hire experts for your accounting needs through outsourcing.

Service providers focusing on real estate have trained and experienced accountants that can handle your work. They also often work in teams which helps you surpass any time and financial constraints. Since they are already trained, the cost of hiring is also much lower than that of an internal accounting team.

Mitigate risk

The real estate industry makes an attractive target for scammers and hackers due to the large number of financial transactions involved. According to Perimeter 81, one out of three real estate companies has faced a cybersecurity attack. But half of them reported not being prepared to deal with the attack. This is due to inadequate steps taken by the company to manage its financial data.

Outsourcing companies understand the sensitivity of such information and set up their own security measures to protect client data. Moreover, the risks of internal fraud are also significantly reduced by outsourcing.

Versatile services

Real estate back-office accounting requires different services such as payroll management, financial planning, and budgeting. In-house teams consist of one or two employees who specialize in limited services. Handling tasks outside their specialization leads to the compromised work quality.

Hiring an outsourcing company gives you access to a variety of services. Instead of one person doing all the work, outsourcing companies have dedicated staff for each service. Companies like KriyaGo have expert resources that not only handle your accounting but also provide guidance to improve your business.

Pain-free tax season

Well-planned tax deductions save a significant amount of real estate revenue. This involves a thorough knowledge of tax laws and filing for the right deductions. To avail of the benefits, you also need to organize your bookkeeping and have the necessary paperwork.

Outsourcing makes your tax season hassle-free. It lets you hire industry experts who specialize in real estate tax. They can help you with bookkeeping, reconciliation, audits and also advise you on the best practices to save more on tax. They also ensure compliance with tax laws and keep you away from legal hassles.

Latest technology infrastructure

Real estate technology has made complex accounting problems easier and more accurate. But investing in these technologies is usually too expensive for property management companies, considering it is a non-core function. Access to such technology is an added advantage of outsourcing.

For example, a survey by Xero shows that businesses that use cloud accounting get five times more customers than businesses that do not. By outsourcing to a company that uses cloud accounting technology, you can effectively improve your real estate business. Along with numerous other benefits, you also leverage technology at a fraction of the cost.

Portfolio-specific experience

Real estate business involves portfolios that require different methods of accounting. For example, multifamily accounting deals with CAM reconciliations which are usually not required for single-family homes. They are also governed by different rules and regulations.

Outsourcing companies have experience handling a variety of portfolios. They know the different financial laws and can assist you better in your particular industry. This ensures your accounts are always up to date and accurate.

Partner with KriyaGo for accurate back office accounting services

KriyaGo provides back-office accounting services to real estate companies. We understand the complexity of managing real estate accounts and aim to build an efficient back-office strategy for our clients.

Our expert team combined with the latest technology can provide you with the right accounting solutions. We focus on giving the most efficient and accurate service based on client requirements. Our cost-effective services help clients channel their time and money into other core activities.

With an experienced team of knowledgeable accountants, we help our clients make well-planned financial decisions and achieve business goals. We also value accuracy and give you better control over your outsourced processes.

Book a free consultation with KriyaGo to leverage our back-office accounting services!

The Top 10 Property Accounting Mistakes You Need to Avoid

Thu, 15 Jul 2021 09:00:00 -0400

As a property manager, accounting is a significant part of your work. In 2020 alone, 5.64 million existing homes were sold in the US. With so much transactional data, you need to have strong accounting skills to maintain a realistic picture of your company's financial health.

According to Wasp Barcode Technologies, 60% of small business owners feel they do not have adequate accounting knowledge. This can lead to poor management of records and an inaccurate understanding of your company's financial situation.

In property accounting, there is little room for mistakes. If you are just getting started, then here is a helpful guide on the common accounting mistakes you can avoid as a property manager.

1. Not Separating Business and Personal Accounts

Technically, your commission and salary belong to you as a property manager. But, mixing your personal and business transactions is not only unprofessional but also inefficient. Using your personal account makes it difficult to distinguish between business and personal transactions. This leads to additional work during tax season and may also add to tax costs.

Luz Urrutia, a member of the Forbes Finance Council, says that using your personal account for professional transactions makes it difficult to gauge the financial health of your business.

Having a separate business account keeps all your business transactions in one place. It also makes you more credible from the client's perspective. By maintaining individual accounts, you can maintain a clear audit trail and a strong business credit score.

2. Insufficient data backup and security

Your accounting data is under constant threat, even if it is stored digitally. Several factors like a technical failure, mistaken deletion, or even a power outage can cause significant data loss.

Hosting Tribunal reports that 40% of all data losses are caused by hardware failure. It further adds that 40-60% of small businesses won't recover from a data loss.

Backing up financial data to a cloud is an efficient choice for property managers. You should back up your data to:

Protect your data from human errors, malware, and hard disk damage.
Move data from one server to another

Avoid loss during major software or website updates

Using the cloud also allows you to automate frequent data backups and remote restorations using any connectible device. Your data is also secure since it is encrypted.

3. Lack of adequate training sessions

Property accounting requires occasional software updates. Different accounting software has different standards as well, which may not suit your needs. You don't want to look for workarounds every time. That increases workload and complicates time management.

Employees need to devote time to familiarise themselves with existing systems and software updates. Training ensures that the workers make the best use of the features on offer. Learning the shortcuts will save time and data entry errors.

KriyaGo has a team of experienced and professional accountants who can handle your accounting worries. We will help you free up resources and avoid making things more complicated. Let us help you manage your portfolio of properties and address your unique set of bookkeeping needs.

4. Unsuitable resources

Property accounting needs two things: the right software and the right person. Generic accounting software lacks features like separate profit or loss statements per property or automatic monthly payments, essential for property accounting.

According to Forbes, RPA has decreased the accounting time from several months to a few weeks. You can choose a dedicated software for property accounting or consult KriyaGo so we can build one for you.

Similarly, hiring the right person is also important to get the best out of the software. Most businesses employ inexperienced staff when they are new. This can lead to low rates of production and increased business.

Hiring a professional can build a good framework and set the right pace for your business.

5. Tracking commissions separately

Hiring a professional can build a good framework and set the right pace for your business.

6. Disbursement of funds before closing the transaction

You cannot consider the funds held in a trust or escrow as a commission before the official documents are signed. If you disburse these funds early on, your brokerage will not comply with the governing bodies. Such disbursements happen often but are not a good idea.

Moreover, if the commissions are renegotiated last minute, you will have to collect back the disbursements. What should have been a single-step reversal of funds will turn into a multi-step, complicated process.

It is best to wait till all the documents are signed and the keys are handed over before distributing the checks to everyone involved.

7. Lack of efficient scaling

Almost all property management companies aim at one thing--growth. You can achieve this goal in several ways. You can add more people to different departments or get more agents and brokers. But with the development of your company, you will need to upscale your back office accounting.

Several companies fail to upscale their accounting, which is inefficient to deal with the increased transactions that come with its growth.

You can add more staff to your back office. But a better option is to digitize your accounting through a real estate software support company like KriyaGo, which provides the right software solutions.

8. Inaccurate data classification

Many property managers make mistakes while classifying data. Not organizing data accordingly (such as capital expenditure, repairs, and maintenance) can make the audit process difficult and time-consuming. By accurately classifying them, you can save on taxes as different items attract different amounts of tax.

Data classification can look time-consuming. But with a monthly review, you can get your financial data right and generate important reports such as P&l statements and tax documents.

If you are unsure about data classification, you can get your books checked by a professional to ensure the proper data classification.

Professionals know the industry norms well and can save you from tax complications later on. They can also advise you on the right property accounting software to make your bookkeeping process easier.

9. Not following the tax filing process

Not following the proper tax filing process can cause problems later on. Most investors look at the tax records of your property before investing. Having poorly managed tax records can negatively impact your relationship with your clients.

There are two ways you can file your tax returns: cash and accrual.

Cash accounting records your transactions as they are received or paid. Accrual accounting records them as revenue and expenses.

Consider both methods along with the tax guidelines of your state before filing tax returns. If you find the tax rules confusing, you can file them through professionals specializing in real estate accounting.

10. Avoiding internal audits and account reconciliation

Internal audits are essential to get a bird's eye view of your company's property accounting. Without frequent audits, you just have a vague idea of the expenses and taxes, the profits and losses, and you miss out on many details.

Auditing every month gives you a clear idea of the loopholes, which allows for timely intervention and correction. Regular financial check-ups keep you updated on the portfolios and throw light on the company's financial strength.

Similarly, real estate accounting is incomplete without reconciliation. No matter how careful you are, there can be missed entries and incorrect transactions. It is important to verify your accounting books and see that all transactions are reflected in your bank account.

Reconciliation can help in identifying bank errors and other mistakes that can cost you a hefty sum. Most property managers skip reconciliation as it is a complicated process.

To make it easier, you can choose accounting software that allows reconciliation. Though it can be time-consuming, sparing a few minutes every day to verify your bank transactions can be beneficial in the long run.

Bottom line

By implementing a solid accounting platform, you can minimize all the errors and speed up the process. Choosing user-friendly software with options built for real estate accounting is an excellent way to get started. If you have several tools that you love to use, you can integrate them seamlessly through KriyaGo.

How can KriyaGo help

KriyaGo's back-office accounting is one of the best in the industry if you plan on outsourcing. It is also more economical than keeping an in-house team of accountants. By choosing KriyaGo, you get access to expert resources and better software at lower costs. It also gives you more control over your finances while ensuring that your data is in safe hands.

Book a free consultation with a KriyaGo Advisor to know more!