min read

Why property management software and accounting software should be separate

Takeaway: While it seems like more work, using two compatible systems saves more time and enables easier workflows.

Accounting Software, Property Management Software, or Both?

Every property management business should consciously aim to make their daily, weekly, and monthly processes more efficient. It is no different when using property management software. While systems like Rentroom streamline communication, record-keeping, and operations for both property management companies and landlords, they cannot achieve the level of expertise and concurrently practical functionality of accounting-specific systems like Intuit or other popular accounting tools. With decades and billions of dollars spent in research and development, these systems have produced the highest quality accounting features to date.

As a result, most CPAs recommend keeping property management software separate from accounting workflows and concurrently accounting software. 

Along with Rentroom, numerous property management software platforms advertise as one-stop shops that streamline every rental business workflow. While these systems provide adequate reports, they rarely achieve the accounting-specific functionality that small business accounting-specific platforms can. Whether it is accounting, payments, marketing, communication, or organizational features, these platforms typically focus on several of these workflows more than others.

Since its inception, accounting software has drastically changed. While accountants or financial service professionals historically handled these systems, they have become easier to use and thus more accessible to small business owners such as landlords, property management companies, and real estate developers. Human error is minimal, and bookkeeping processes are more efficient through easier workflows developed on these platforms.

Here's what accounting software should do better than Property Management software:

  • Allow you to track your other businesses (construction, real estate sales, etc.)
  • Less manual entry and more automated workflows
  • More available reports
  • Better support
  • More standardized accounting principles
  • Provide the correct necessary state and federal tax and compliance forms

While property management software initially focused on organizational and accounting features, it has evolved as technology has, and thus consumers (tenants in this instance) have demanded better functionality. Designed to enhance communication with tenants, automate rent collection, provide online capabilities for tenants, and improve day-to-day operations, the goal of property management software should be ease of use and time saved for all parties involved.

Here's what property management software should do better than Accounting Software:

  • Process online payments
  • Coordinate work orders
  • Store relevant information for the history of each property or resident
  • Streamline communication with tenants
  • Digital Applications & Leasing
  • Tenant Screening
  • Marketing

While managing two separate systems may seem like an overhaul, some property management software communicates directly with accounting software, which is achievable in several ways. 

For example, Rentroom has three accounting options, two of which are compatible with external accounting tools, which include:

- Direct integration: In this case, Rentroom directly integrates with accounting software and functions as both a property management software and a payment gateway. For example, through our direct integration with Quickbooks, both customers and properties automatically sync to Quickbooks, and transactions automatically post to the appropriate Quickbooks ledgers.

- Compatible Reports: This option provides rental businesses with easy-to-pull reports compatible with desktop versions of accounting software or CSV files to import into Excel or Google Sheets. For example, you can easily drag and drop necessary deposit and expense reports from Rentroom to Quickbooks if using Quickbooks' "accounting tools."

- All-in-One Solution: While we suggest using two systems, extenuating circumstances arise. Firms with low budgets, few employees, or a lack of accounting expertise may need a "one-stop-shop." In Rentroom's case, we have developed an online solution similar to Quickbooks Online's interface. 

Ultimately, there are numerous options to consider when evaluating a rental business's accounting needs. However, there is generally a risk versus reward factor for each feature, as each platform prioritizes some workflows over others. For example, some property management platforms may have accounting features nearly as robust as Quickbooks but cause users pain with a lack of user-friendliness. Others may provide adequate payment functionality but lack leasing or marketing features. Rentroom provides a seamless all-in-one solution, but over time we have observed that a direct integration between two simple-to-learn, user-friendly, and easy-to-use systems provides the cleanest and most efficient workflows.

Interested in this integration? Set up time with one of our AEs to see it in action, or sign up.

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