As a property or real estate company owner, you certainly need to know everything related to the company’s financial condition. Recruiting or consulting with the right property manager will help you maintain and increase the value of your property assets. Plus, property managers will provide accurate and detailed property company financial reports so you can realize the financial goals of your property company.
In the world of financial management, all costs deemed unnecessary for company operations need to be cut. As much as possible, track all costs that do not effectively help the company’s operations. Because you have to take full advantage of the income streams that come from the rental property.
Obviously, the data you need to realize these things is in one of the components of the Financial Statements, the Income Statement, and Cash Flow. When the task is done correctly, the potential income of your property company will be maximized. If you are looking for an accountant who is an expert in financial reports, you can find it at https://lokalerevisorer.dk.
Here are six types of Financial Statements that your property manager must provide each month:
Balance Sheet Report (Statements of Financial Position)
This is a report form that contains a summary of Assets, Liabilities and Owner’s Equity. At a glance, you will see cash balances, the amount of property investment whether completed or under construction, the security deposit held, the amount of debt from Financial Lease, income from customer deposits, and more.
This report must have a breakdown of total monthly income and expenses. Then pair with the Budget Report that you created to see the financial performance of your property company. When properly made and used, the Budget Report is a guide to operating your assets. You should expect the performance of the property company’s Income Statement according to the Budget Report. Comparing the actual figures from the Income Statement with those in the Budget Report will help you achieve the financial goals of your property company.
General Ledger provides detailed information on each account transaction that generates the total amount reflected in the Balance Sheet and Income Statement. Each entry must be entered completely and clearly. Ask your manager if you see a lot of corrections on various accounts in General Ledger every month or year.
Debit Account Report
This report must provide information on all credit payments made during the reporting period. The aim is to provide a clear audit trail for all funds borrowed as each property. Debit Account Reports also provide information on the age of your debt. This is needed for decision making regarding cash out of your company. Look for a creditor who has disciplined and provided a copy of your invoice for the easy data collection on the Debit Account Report.
Tenant’s Accounts Receivable and Down Payment Accounts
Like Debt Account Reports, Accounts Receivable Reports are a sub-section of the General Ledgers. This report details each account receivable and down payment (DP) transactions of tenants which are summarized in the Balance Sheet and Income Statement.
A Copy of the Monthly Bank Statement
This report will strengthen the statement of nominal bank account balances reflected in the Balance Sheet and deposits and debits reflected in General Ledger.
The types of Financial Statements for Property Companies above are provided by property managers so that you, the property owner, can avoid unnecessary expenses and losses and eventually you will have full control over the management of your property Assets.