How does bookkeeping for property managers work?
In bookkeeping, the financial transactions of a business are recorded and tracked. Bookkeepers summarize this activity into reports to chart how the business is performing. Additionally, they may prepare tax returns, prepare invoices, monitor key performance indicators, and offer advice to clients.
Bookkeeping through the ages
It has been shown that financial records were kept in Mesopotamia, Babylon, Sumer, and Assyria as early as 7000 BC. Ancient Greek records of agricultural accounts in the Roman Empire, as well as Ancient Greek archives, have been discovered.
Modern bookkeeping has its roots in the 15th century. The history books recognize both of those who documented the double-entry system. Some claim that Benedetto Cotrugli’s 1458 book Of Commerce and the Perfect Merchant is the cornerstone of this theory. In 1494, Luca Pacioli wrote a book called Review of Arithmetic, Geometry, Ratio, and Proportion, which was considered the father of bookkeeping.
A Franciscan monk and Italian mathematician, Pacioli described the double-entry system and the use of various bookkeeping tools like journals and ledgers. From this book, bookkeeping became a recognized profession in the UK and the US in the 1800s and was taught to high school students worldwide.
Now integrations with accounting software such as Xero allow for smooth property management services. Bookkeeping can be made easy through Xero and as a landlord, you want to stay on top of this. This is possible through Lofti’s systems.
Introduction to Accounting
A few basic bookkeeping concepts and definitions you should know are listed below:
- Expenses: The cost of keeping a business running.
- Balance sheet: shows what your business owns, its values, and how much it owes
A business’s financial records are maintained on a day-to-day basis through bookkeeping. We will explore how bookkeepers’ role has expanded over time. In the past, bookkeepers collected and checked information from which accounts were prepared.
An accountant analyzes, reports, and sums up the data he or she collects. In accounting reports, you can see how a business is performing financially, as well as figure out how much tax is owed.
It is extremely important to get a degree in accounting if you want to be a successful accountant. This degree requires intense training and education in the area of tax law as well as finance and business management. It is not necessary to have this level of training to call oneself a bookkeeper, even if some bookkeepers possess similar skills.
Certification and training in bookkeeping can be obtained through professional associations. Take a look at Xero’s training program to learn more about becoming a bookkeeper.
Lofti has the power to integrate your accounting with our property management platform. Whether it be through Xero or via Open Banking, we can work around you. The software integrations make it easier for you to go about your accounting needs and keep track of all payments linked to individual properties. By having it all in one platform, you are able to use our analytics tab to look into your data to do with rent in, costs a