Business
Real estate brokers and property managers receive what are known as “trust funds” in the normal course of doing business. These are typically deposits and payments received and held on behalf of others, thereby creating a fiduciary responsibility to the funds owners. In our business as property managers, we must handle and account for these funds according to established legal and accounting standards within the rules and regulatory requirements of our individual states. Not being in compliance could have significant financial and legal consequences for our property management businesses. On this episode of Property Management Brainstorm, Bob Preston discusses accounting and bookkeeping for property management trust accounts with Taylor Hou, Chief Happiness Officer at APM Help. Bob and Taylor discuss the importance of keeping the books clean, what auditors would see as red flags, and how to spot irregularities and discrepancies in your property management accounting reports.Topics Covered[2:20] Taylor tells us about his title, Chief Happiness Officer, and how APM Help works with its clients.[3:45] Transitioning from legacy accounting software like QuickBooks to more current property management software such as Appfolio, Buildium, or Propertyware.[5:20] The difference between corporate accounting and property accounting (also known as trust accounting).[7:30] Taylor explains three-way reconciliation and why it is important.[12:30] The Broker's fiduciary responsibility pertaining to trust funds.[14:45] Red flags and discrepancies that might indicate embezzlement within a property management company.[21:15] New tech coming in accounting using Artificial Intelligence to identify account irregularities.[23:00] Setting up trust accounts for different types of properties (long-term rentals, vacation-rentals, commercial properties, HOA).[25:25] What will state real estate regulators look for during an audit of financial records?[29:30] Taylor shares the story of how he got into accounting and bookkeeping for property managers.[34:20] How to get in touch with Taylor and APM Help.Connect with TaylorAPM Helptaylor@apmhelp.com Connect with BobNorth County Property GroupThis episode is always available for listening, sharing, or download at Property Management Brainstorm. Subscribe to Property Management Brainstorm on Apple Podcasts, Google Podcasts, Stitcher, Spotify, TunedIn, iHeart Radio and YouTube.