Top Property Management Accounting Challenges & How to Solve for Them
Top Property Management Accounting Challenges & How to Solve for Them
How does your property management company stay compliant and efficient when it comes to accounting and reporting?
As a former owner and operator of a property management company, I can attest that accounting is one of the most complex and time-consuming workflows in the business. It affects every aspect of operations — from owner retention to leasing to maintenance.
When processes weren’t efficient and consistent, errors occurred frequently, leading to late nights and financial stress. Property managers simply can’t afford to get accounting wrong. Mistakes can lead to audit failures, customer loss, and financial inaccuracy.
This post highlights the most common accounting challenges faced by property management businesses and shows how to overcome them using automated, digital tools.
Note: This content is for informational purposes only. Consult a qualified tax attorney for specific accounting or tax advice.
Challenge #1: Collecting Rent
The Problem
Many property managers struggle to collect rent in full and on time. Over time, this issue negatively impacts:
Net Operating Income (NOI)
Owner cash flow
Overall business growth
A common cause is reliance on paper checks or money orders, which must be collected manually, deposited at the bank, and entered into the system — a process that leads to extra work and double data entry.
The Solution: Offer Online Rent Collection
Transitioning to online rent payments eliminates manual collection, reduces delays, and increases payment reliability. Renters — especially Millennials and Gen Zers — prefer digital payment options for convenience.
Online payments also benefit owners by delivering funds faster.
For example, JC Register of Register Real Estate uses direct ACH deposits to expedite payments to owners, transferring funds within 12–24 hours.
“I tell owners that if they come on board, they don’t have to wait for a check. The money is in their account within 12–24 hours. They really like that.” — JC Register, Register Real Estate
Challenge #2: Reconciling Books
The Problem
When I operated my business, we used QuickBooks and Excel spreadsheets for reconciliation. These systems required double data entry and didn’t force every transaction to be tied to a property. This caused:
Frequent errors and inconsistencies
Difficulty maintaining accurate property-based P&Ls
Manual trust accounting work
The lack of automation made reporting slow and error-prone.
The Solution: Use Automatic Reconciliation Tools
Your property management platform should automatically record and match every bank transaction. Look for software that:
Imports bank transactions daily
Provides a centralized view of bank activity
Uses automation and AI for effortless reconciliation
Modern systems now generate automated reports, handle transaction matching, and prevent the need for untangling errors at month-end.
Learn more about AppFolio Property Manager’s bank reconciliation solution to see how automation can simplify this workflow.
Challenge #3: 1099s and Year-End Close
The Problem
Preparing and sending 1099s was one of the most tedious and high-risk annual tasks. Late submissions can trigger IRS penalties of $30–$100 per form and even lead to audits.
Closing the books was also complex but critical for understanding:
Total payments received from owners
Total payments made to vendors
Overall business performance
The Solution: Prepare 1099s Digitally
Using a digital system of record eliminates manual entry errors and simplifies 1099 preparation. Benefits include:
Transparent dollar amounts for owners
Centralized data for vendors and owners
Ensure your platform supports the 1099-NEC form, which is required for reporting vendor earnings.
Challenge #4: Owner Packets
The Problem
Creating owner packets was a major time drain. When data wasn’t readily accessible or accurate, I often worked late to meet deadlines and avoid owner confusion.
The Solution: Adopt Reporting Tools
Use reporting tools built into your property management platform to:
Instantly analyze and compile property data
Generate owner reports in minutes
Detect errors or inconsistencies using built-in analytics
Switching from paper-based packets to online reports saves time, reduces costs, and improves accuracy.
Conclusion: Automate for Accuracy and Compliance
Accounting in property management comes with unavoidable challenges. However, by standardizing processes and adopting automated digital tools, you can:
Save time
Improve accuracy
Maintain compliance
Implement the solutions shared above to set your business up for year-round success, not just during tax season.
To learn more about optimizing your accounting operations, check out our accounting optimization guide below.