Bottlenecks to Property Management Profitability Part 2: Poor Accounting

Welcome to The Property Management Show’s second episode in our multi-episode series entitled Bottlenecks to Property Management Profitability. Today, we’re talking about property management accounting.

We’re joined by Daniel Craig from Profit Coach. He is sharing some juicy details on property management accounting and how it impacts profitability. There’s a lot that can go wrong for property management companies when it comes to accounting, and we’re talking about what you should be doing to get to profitability, and the tools you need to get there.

Most of you probably know Daniel. But if you’re a new listener, let’s hear a bit about why his opinions on accounting matter so much.

Property Management Accounting:

Introducing Daniel Craig and Profit Coach

Daniel came from a traditional accounting background. He has always done business with the intent of owning outcomes for the entrepreneurs he works with. Daniel understands that entrepreneurs are in business because they want to be free. They’re seeking freedom in finances, time, relationships, and purpose. Most entrepreneurs think of accounting as a simple way to file taxes and comply with the IRS.

But, accounting is so much more than that, and Daniel’s passion is to show entrepreneurs how accounting can help you know if you’re achieving your goals. It can help you measure financial performance, get clear on where you want to take your business, and achieve your goals. Daniel and his company want to help you use your resources to achieve your purpose.

He soon realized the property management industry is a great business to be in, and a lot of companies were doing great. But, he also noticed a trend where a lot of property management owners were working hard and not making a lot of money.

His goal is to help the industry rise and break through to larger profits.

Daniel worked with Lead Simple to do a financial benchmarking study for the property management industry, and NARPM noticed. They enlisted Daniel’s help to write national accounting standards for the property management industry.

The Purpose of Property Management Accounting

A lot of people find accounting to be less than exciting. As the owner of a property management company, you might think of it as dirty work that someone else in the company is responsible for doing. You just want to know your financial statements will keep you out of trouble and appease the IRS.

But, the primary purpose of accounting is to measure financial performance. You’ve probably heard the phrase ‘what gets measured gets managed.’ Daniel believes that anything which gets measured, also gets improved.

You’re in business to make a profit. Accounting measures that goal and gets you clear on your company’s financial performance.

Bad accounting creates bottlenecks to profitability and prevents clarity. You need that clarity.

Remember this: Clarity Drives Commitment and Commitment Drives Change.

If you have goals but you’re not clear about where you are today, then you can’t possibly know what it will take for you to achieve those goals. You cannot allow yourself or your company to stay in a financial fog. It leads to uncertainty and keeps you noncommittal. If accurate accounting can deliver clarity, you will be able to make a commitment and reach the change that’s necessary for you to achieve the outcomes that you want.

People think either they’re profitable or they’re not. But, it’s not black and white. There are degrees of profitability.

If you’re not making money – that’s an obvious bottleneck. But,