We’re counting down the days to the End of Financial Year. While property managers don’t exactly look forward to this time of the year, we can all agree that preparation is key to achieving a less stressful situation come 30 June.
To help you tick out all the boxes in the lead up to EOFY, here are some best practices that you and your team should be doing – from processing invoices weeks ahead down to processing EOFY on the day itself. Plus easy and self-paced tutorials taking you through the steps for your specific software.
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Best practice guide for property managers
Review and Preparation
1. Make sure you’ve put any rent changes in the system
Check and ensure that rent increases for the past 12 months have been implemented and have been processed through your system. This will save you a lot of time in making those last-minute inputs and eliminate reporting errors in case you did miss any rent changes over the year.
2. Review outstanding work orders
Reviewing outstanding work orders early on gives you enough time to check what has been completed and what needs follow-up so you can get those invoices in before EOFY.
3. Notify your creditors
One of the challenges every end of month, is getting invoices from your creditors. Notifying your creditors way ahead of EOFY can give you more time to process and pay invoices. Remember, any work done on the property by the owners has to be paid for within this period, so they fall into the right financial year – this is critical for tax purposes of your owners, like tax deductions for example. Give a clear deadline to your creditors – one that will give you enough time and avoid stress in processing tons of invoices as EOFY nears.
4. Enter All Invoices
Allocate some additional time in entering invoices so you can avoid the onslaught of workload in entering them all days before EOFY.
5. Sold and Lost Properties
Ensure numbers of sold and lost properties are accurate and allocated correctly in the system.
6. Review bond reconciliation
Another important thing that you need to check on is if your bond information is up to date. While it is likely that your bond reconciliation is automated, a bond audit is a good way to check if you have a bond for all properties you manage and if old bonds for properties that have been vacated have been allocated correctly.
7. Plan Ahead
EOFY means that a new one is just around the corner. This is a good time to look at all areas of your business, from marketing to systems and procedures, even planning training for the next 12 months. Reviewing existing processes against expectations for the year ahead helps in determining which ones work and what needs to improve. This can assist you in implementing new policies and practices and removing those that are simply not relevant anymore.
1. Overpaid Rent for Vacating Tenants
Any rent that tenants have paid in advance needs to be double-checked to ensure that overpaid rent are held and do not go to the landlord.
2. Unknown Funds
Reviewing unknown funds helps ensure that funds that should go to the landlords are allocated properly in this financial year. This is a process that ideally has to be done more than once a year, but if you haven’t been as diligent – double-checking these funds before end of financial year will help identify unallocated income. This will also ensure that unknown deposits will be reported correctly for audit and lodged to State Revenue.
3. Check Available Funds
Make sure owners have enough available funds to pay creditors, especially around this time when invoices are coming in. If they don’t, reach out to the owner and give them the option to pay the invoice themselves or transfer funds to your agency so you can pay for it on their behalf. There may be some accounts that owners have specifically instructed you not to pay this financial year. Keep these separate so they are processed after the end of financial year.
4. EOFY Fees
One of the most important things when it comes to financials is EOFY Fees. Check fees against the agency agreement to ensure landlords are being charged correctly. This will also ensure that any negotiated amount and waivers are properly accounted for. EOFY Fees may not seem like a significant amount but when multiplied across the number of properties, they have an impact on your agency’s revenue. Charging correctly also builds on maintaining a good relationship with your owners.
5. Other Fees
Of course, it’s not just EOFY fees that need to be correctly charged. Double check on any fees that need to be collected for the current financial year – marketing fees, admin fees or any letting fees that have to be entered manually. These fees need to be charged in the agreed amount in the correct financial year, so they don’t roll over to the next year.
Statements and documentation
1. Understand your Statements
Regardless of the system, you are using, it is important that you understand what’s reflected in the statements so you can explain them correctly to your owners once enquiries come in. Train your team on how to handle enquiries for any entry of the statement so you can establish an efficient process.
2. Assign a point of contact and update the details in your template
Update your email/ statement template to include contact details for statement-related enquiries, this ensures they go to the right person or department and are answered correctly.
3. Audit Requirements
Make sure all information is ready for audit. Preparing for end of financial year is a good time to check if all information and reports you need are correct and well organised for audit.
What to do on the day
When you’ve got all the preparations done, EOFY should be quite easy. Here are some reminders to make sure this day goes on smoothly for you and your team:
1. Reconcile First
Ensure all payments are processed and bank reconciliation has been completed.
2. Perform Backup
If using server-based systems like Rest Professional, make sure to perform a backup of your files to prevent losing any data.
3. Release Funds
Ensure you are not holding on to any funds that need to go to your owners. Double-check the report to ensure these funds are released before processing EOM/ EOFY.
4. Preview your Statements
Preview your statements to identify mistakes and make necessary corrections before sending them to landlords. This is ideal for agencies with a manageable size of rent roll but is understandably not a practical step for larger offices that manage thousands of properties. A more workable solution would be to start practising monthly statement and ledger previews moving forward to address incorrect entries early on.
5. Process EOM and EOFY
Running EOM is often the easy part of the EOFY Process. Just be sure to follow the steps recommended by your software provider to ensure you get to this point without any problem.
And don’t forget to breathe!
Make EOFY something to look forward to with your team. Enjoy a shared brekkie to get a good start on things, remember to breathe and be sure to celebrate with an EOFY bash once all is done – you and your team deserve it!
Step-by-step articles covering the EOFY process
Need help in processing EOFY in your property management software? We have dedicated EOFY knowledgebase articles for Property Tree, Rest Professional and File Smart complete with step-by-step guides and instructional videos.
Frequently asked questions about EOFY in property management
Wishing everyone an easy and stress-free EOFY!