Real Estate Accounting Software
With profit margins falling and recessionary talk trending up this year, business managers may rely on direction from their accountants or accounting software.
More businesses are data driven, which means Realtors, real estate investors, HOA managers, and property managers rely on accounting software for accurate, in-depth reporting of cash flow, budget vs actuals, and rent roll reports as examples. Accurate, actionable data and accounting automation are big pieces of the success picture in 2023.
Best SaaS Products for Accounting
In this post, we cover some popular bookkeeping and accounting products used by most businesses.
As you’ll discover, some may not possess the specific capabilities of a dedicated property accounting solution.
The words dedicated and integrated are the key concepts in property management platforms. And you may be a property manager, asset managers, or Realtor who believes a thorough all-inclusive platform is the way to go. Patching up a solution with add-on, 3rd party tools represents extra work, expense, and risk.
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SaaS Pricing is often a Marketing Gimmick
Most software reviews emphasize pricing but we don’t explore prices here for 2 reasons:
- pricing schemes are convoluted and tricky, with all sorts of sign up discounts, and user and account limits that affect the final price. SaaS companies often turn to pricing tricks when they can’t build sufficient demand through product benefit leadership.
- pricing schemes are marketing tools ,yet free and cheap pricing are not usually priorities for successful, sustainable mid-sized companies who have their game together.
Red flags. Be careful about SaaS software companies offering 75% off for 6 months.
Building Your Business on Accounting Insight
Real estate pros are recognizing they need to use their software as a foundation for their business. Great reports help optimize the numbers for every area of your business. That breeds confidence.
Plenty of good real estate accounting software products are available online. However for real estate businesses, many have consistent weaknesses and hidden, unexpected risks to consider carefully:
- they are general small business accounting solutions focused on high traffic sectors such as professional freelance services, retail businesses, and built around emotional benefits such as tax management.
- they are not built into a real estate business platform
- they pose data protection and management risks when performing external app integration
- they do match up with real estate or property management regulatory frameworks such as automated trust account compliance
- they may not allow accounting for specific properties
Before you research and choose an accounting solution, ask some good questions about what it must do for you and which has the specific features you need for your business. Pare away the general solutions without specialization and consider passing on the bells and whistles features for later, to avoid muddling your priorities.
Avoid Going with General Accounting Packages
Choosing an accounting software because its a popular brand you’ve heard of is a gamble. General small biz software clouds the view of professional systems.
Real estate is a unique business sector which is why your accounting software must serve your specific business segment (e.g., property management, real estate financing, real estate sales, commercial real estate, community association management).
Today, you’ll discover solutions you weren’t aware of. Let’s get into real estate accounting software designed for real estate.
Intuit QuickBooks Online Accountant
The business world’s top digital accounting solution lets you manage your books, track expenses, and invoice your customers. It’s the choice of many given its quality and focus on small business. It integrates payroll, and online payments, tracks income and creates estimates for projects.
Two potential drawbacks for Quickbooks may be its complexity and its general nature. Business today has become very nichey with specific tasks, which a general software is not set up to perform. Inuit may not allow you to account or report per property, per building, per owner and to the fast changing rules of your industry/sector.
They do have payroll and time tracking if those features are important to you.
One size fits all helps make their product more profitable, but it is not designed specifically for the real estate sector.
ManageCasa Accounting System
Property managers are a good example of a niche customer with specific accounting requirements. Large scale landlords and property management companies view accounting as a foundation of their business. Without good data they can’t make decisions.
In this instance, accounting-based operations helps ensure consistent cash flow, aids in expense planning, optimizes asset management (maintenance), and with lease-based costing and auto rent payment, it automates expense allocation.
If you compare ManageCasa to Quickbooks or Freshbooks, you can see the property management focus stands out for landlords and property managers. It’s entirely and genuinely focused on property management accounting challenges.
- keeps recording and reporting accurate with each owner’s account separate from your own
- keeps you on top of delinquent accounts with multiple overdue payments
- quick bank reconciliation
- keeping rent and rent deposits separate from operating capital, and commingling funds is illegal
- accounting information is detailed, accurate and ready for tax audits or legal challenges
- builds owner’s trust in your financial reporting and funds management and that fraud will not occur
- online payment transactions and owner disbursements/draws can be done quickly and automatically
- commissions and fees are automatically extracted
- ability to view your reports and statements online
- your data is kept inhouse and not accessible to multiple IT providers
- customer service are focused on property management issues
See more on what makes the best in class property accounting solution at ManageCasa.
Bench Accounting Software
Bench is an interesting twist as a SaaS based accounting solution, where real accountants take care of your accounting.
Bench is highly focused on tax management and financial reporting which are important features to real estate businesses. Their dashboard gives views of financial statements and expense report which are pretty well standard offerings, but Bench calls them seem extra special benefits.
Is this enough to merit adoption for your real estate business? In a Linkedin survey we conducted, tax matters were considered low on the priority list of property managers. However, Bench does offer to do the bookkeeping for you and you have access to a dedicated expert on taxation and accounting. For larger property management firms, it’s wise to do accounting in-house, but for small firms, Bench is an interesting option.
Zoho is a popular general business accounting platform which helps you integrate your operations via its collection of apps. End to end accounting is a nice benefit for small businesses as is the inventory asset management feature, yet neither are sufficient for mid-sized property management firms.
Zoho identifies as a single secure location to keep up with your company’s bills and invoices, reconcile your bank statements, control your spending, oversee projects, and eliminate accounting compliance worries. The issue with it might come with capacity or per property management account reporting. It’s designed for small businesses but not really for real estate firms.
FreshBooks Small Business Accounting Software
Designed as accounting software built for business owners and accountants (from the website), Freshbooks focuses on self-employed, freelance workers, and small businesses. With it, you can invoice customers, track expenses, make payments, track time management, and create reports.
Just like ManageCasa, Freshbooks offers more sophisticated double-entry accounting which is obviously an absolute must for business accounting. And too, it automates bank reconciliation, transaction tracking, regulatory compliance, a customizable chart of accounts, and your accountant will be able to update your journal entries and chart of accounts.
Customers appreciate the convenience and ease of use of Freshbooks and it looks like a good software. However, we are left to wonder if their offer of 60% off for 6 months (at time of writing) might signal some problems going forward.
There’s little to dislike about Freshbooks as a general small business accounting software. However, it’s system isn’t specifically suited to the accounting tasks of a mid-sized property management firm nor as an HOA accounting software.
Xero Accounting Software
Xero currently offers its accounting platform at 75% off for 6 months which may be a painful approach for them to attract new users.
Xero helps small businesses pay bills, claim expenses, connect to bank acounts, accept payments, do payroll, reconcile bank accounts, capture data, manage files, produce accounting reports, manage asset inventories, and track projects in general.
It’s said to be useful for real estate agents, and you can connect to major real estate related apps such as landlord studio or Re-Leased. Yet this might not be advisable for a property management or asset management firm that wants to protect its data from prying eyes. Property managers are no fools.
Keeping all your transactions and property data privately within one platform is obviously better for avoiding data breaches. Data protection is extremely important right now in the era of deliberate online hacking attempts. The potential of financial loss and legal action is substantial.
The point with Xero and similar software for accounting products, is they require the real estate firm to adapt to their solution. What you need is a professional level platform that adapts to your specific real estate management requirements. As you grow your business, you won’t have time for mental gymnastics or rework. Your software must get it right the first time, and your accounting must accurately process your financial information.
Accounting accuracy and power underpins today’s successful real estate companies.
Sage Accounting Solution
Sage is one of original digital accounting solutions and has evolved to its new product call Sage Business Cloud. It highlights how SaaS solutions have invaded the market and why software as a service is the preferred route for real estate managers.
Sage is definitely one of the heavy weights in cloud accounting and financial management software for enterprise firms. They’re revered for operations and inventory management support up against the major enterprise resource planning (ERP) platforms. Commercial real estate managers may prefer Sage Intact for medium-sized companies. It highlights how the enterprise platforms aren’t suitable for smaller companies.
Sage is for Accountants. Their system includes an accountant edition offering advanced reporting and cash flow management. An accountant may be able to appreciate the enterprise level features, but the question is whether your staff would be able to navigate it. Solutions today have to be usable by even entry level staff and of course automation is expected.
Quicken is a registered trademark of Rocket Mortgage, LLC, which is headquartered in California.
Quicken is a personal finance software which helps small business users track their spending, income, bills, or investments. It has a version with a home and real estate business plan to allow users to manage multi-property ownership with these features:
- on the go access via desktop , web or mobile
- payment via PayPal
- separates your business from personal finances
- profit and loss reports
- erental & business reports directly from Quicken
- all your reminders in a single Bills dashboard
- updated tax rates and vehicle mileage rates
- long term capital gains show as scheduled transactions
- track rental income, payment, lease terms, rental rates, and deposits – all in one place
- view your portfolio’s performance by asset allocations, geographies, sectors, and more
- evaluate your risk/return and investment performance against the market
Quicken has some potential for small landlords, however the demands of a medium sized property management would make it impractical. The sophistication of accounting for individual owners and properties is far beyond what Quicken was designed to be as a home business accounting package.
Netsuite is one of oldest software companies with its arrival as an ecommerce tool in the early 2000’s. It’s yet another solution that could be used for accounting, but is not specifically designed for use by Realtors, property managers and asset managers.
Most consider it an ERP level solution with the following general benefits:
- ERP, CRM and ecommerce suite cuts cycle times and errors
- real-time dashboards and analytics eliminate spreadsheets.
- browser and mobile access lets you access from anywhere
- multi-subsidiary intelligence scales as you grow
- customize with confidence without risking version lock
- automated upgrades deliver the latest innovations via cloud delivery to eliminates on-premise IT costs
3rd party real estate solutions may use NetSuite to provide services for real estate management clients. Netsuite’s ERP capability helps to streamline common processes such as property creation, tenant management, contract creation, rent collection, and revenue for real estate companies.
Paring Down the Potential Solutions
There are many different real estate accounting software packages with a multitude of options available online.
Choosing the right one requires understanding your company’s specific needs first, then researching which solution will fulfill your needs.
If your company is growing to a mid-sized property management firm in particular, you’ll be needing a professional quality accounting solution that’s integrated into a property management platform. And if integration is available, why would a manger choose to use an attached solution that is vulnerable to errors, bugs and extra work?
And any accounting process that uses spreadsheets is going to produce painful errors as your company grows from 500 or thousands of rental properties. Accounting is one aspect you must optimize.
Any of these property management accounting software products might be a choice for your firm. While other property software solutions can also be an option, you’ll likely find ManageCasa is a superb selection. This firm’s focus on accounting and building financially successful businesses is an asset.
Find out more about our professional level accounting solution for small to mid-sized rental portfolios of between 100 to 5000 properties.
Review ManageCasa now and contact our sales team for a demo.
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