Property management professionals know how hectic an end of month can be. It is traditionally the busiest and most stressful time. The office becomes busy overnight and suddenly you are frantically rushing around trying to get everything done on time and without any distractions. Rockend Education Consultant Leesa Sinn gives us her advice, and provides a simple checklist to ensure your end of month is smooth sailing all the way.
The key to a smooth and efficient end of month is the preparation! I cannot stress it enough, and more time should be spent on this and pre-end of month checks than the actual process itself.
These checks should be completed the day before running your end of month. Block out this time in your diary each month. Do not make any appointments for yourself and take the time to prepare.
- Ensure you have enough stationery. Check you have a sufficient number of cheques; you don’t want to get part way through a payment run only to discover that you have run out of cheques. If statements are printed on letterhead, ensure you have a sufficient supply. Check you have enough paper and toner if you print your end of month documents.
- Give your creditors a cut-off date for submitting invoices. More often than not, you get an influx of invoices that creditors want processed. The last thing you want is to be frantically entering invoices on the day of end of month. At least two business days before end of month should give you enough time to enter and check that all invoices have been entered correctly. Inform creditors that any invoices received after this cut-off date will not be processed until the following month or your next payment run.
- Check the letting fees, advertising fees, and other fees you have charged throughout the month and ensure the correct amount has been taken, and the fee has not been deducted from the owner more than once. There is nothing worse than having an owner contact you when they have been overcharged. You should also be using this opportunity to check and ensure you have not forgotten to take your fees.
- Check overpaid tenant rent and retain these funds from the owner or refund the overpaid amount back to the tenant. Paying out rent to an owner when a tenant has paid past their vacate date can turn into a nightmare, and asking for the funds back after the owner has received them is not an easy task!
- Make sure you hold any required funds from owners, particularly if there is an upcoming settlement and the tenant has paid rent past this date. If your software allows it, ensure you enter a reason why you are retaining funds so it is clear to your owner on their statement. Ensure that previously held owner funds are released if there is no longer a need to have these retained.
- Consider adding a global statement comment if you want to communicate important information to your owners. Remember to remove any old comments from the owner statement that are no longer needed. This is particularly important around Christmas. You do not want to have a Merry Christmas message on a January statement!
- One of the biggest stress points at end of month is the bank reconciliation.Bank reconciliations should be completed and balanced daily. If you only complete a reconciliation once a month, the amount of time it would take to check an entire months’ worth of transactions and the stress you will put yourself under if you are out of balance is not worth it. Avoid the stress and balance your bank reconciliation daily; it means there is only one days worth of transactions to check instead of an entire months’ worth.
The big day has arrived, its end of month and at this stage you should be completely prepared and ready to go.
Follow these top tips for a smooth end of month execution.
- Ensure your colleagues know when you are running end of month. You do not want any interruptions. No phone calls, no meetings, no appointments. You can even switch off new email notification pop-ups, as this is possibly the worst distraction to have during end of month.
- Process the receipting, complete your daily banking if applicable, and most importantly, balance your bank reconciliation. Depending on your states legislative requirements, disburse bonds to your local bond authority. Now it’s time to run end of month!
- If your software program allows for it, complete a backup after important steps during end of month processing. For example, after creditor payments and/or after owner payments. If you are part way through the process and realise you have made an error, you may not have to start end of month again from the beginning. If you have done a back-up, you can just restore it and keep going!
- When it comes to paying your creditors and owners from the trust account, consider uploading a payment file to your bank, which contains all of these payment details. A payment file or EFT file is created through your trust accounting program, which can be uploaded to your financial institution. This is a quick way to disburse funds at end of month and eliminates the human error, which may occur if you currently transfer end of month funds manually.
- Opt for email where possible to save the amount of time collating and folding your owner statements. This not only saves time, it will save you money on postage and envelopes.
- Consider investing in a reliable document management system such as fileSMART. This will enable you to store documents electronically giving you immediate access to any stored document via computer in your office or remotely. This saves time, filing space and makes for a more efficient end of month and workplace.
End of month is such an important part of a property manager’s role. It is therefore important to understand how to become more efficient during this process. Think about the problems that have happened to you at end of month, and ask yourself, how can these problems be avoided in the future? Learn from your experiences, create a checklist and prepare, prepare, prepare so these problems do not occur again!