When working with Appfolio or any other property management software, precise financial management is crucial for success. In this blog post, we want to share how we helped one of our clients who had encountered significant difficulties with their financial management system and how we can help you avoid a similar situation. For over two years, our client struggled to reconcile their operating and escrow accounts within Appfolio Property Manager. Complicating matters further, our client was undergoing an audit by their state Real Estate Association, amplifying their stress and urgency for resolution.


Identifying the challenges:


Upon our engagement, we conducted a meticulous analysis of our client's Appfolio bookkeeping practices and discovered several critical issues:

• Numerous incorrect entries, including unjustified and undocumented journal entries.

• Inaccurate beginning balances were recorded during the initial Appfolio onboarding process.

• Many receipts and expenses were created, which were not posted to the bank account, resulting in a distorted Appfolio adjusted cash balance.

• Ineffective assistance with Appfolio bookkeeping, compounded by the hiring of team members who were unable to rectify the existing problems.

These inaccuracies not only skewed the Appfolio adjusted cash balance but also led to a domino effect of issues in the months following the onboarding. Moreover, the client's Appfolio accounting system before their onboarding was structured on a per-owner basis, diverging from the conventional per-property approach in property management bookkeeping, which introduced additional complexities.


How we solved it:

The resolution process required a deep overhaul of the initial trial balances. We leveraged reports from the client's previous bookkeeping software, facing the challenge of adapting from a per-owner to a more standard per-property bookkeeping model.

Our team worked diligently for two months, navigating through the client's other commitments and maintaining robust communication to ensure progress. The meticulous cleanup and reconciliation efforts culminated in accurately aligning the accounts to the most recent bank statement.

The Outcomes:

• The project concluded with several key successes:

• The delivery of clean reconciliation reports, clean diagnostics reports, and a pristine Trust Account Balance report.

• Restoration of financial accuracy and compliance, critical for the client's ongoing audit process and overall financial health.

Financial Implications for the Client:

Despite the successful resolution, the journey was not without cost. The client incurred significant expenses for the correction of their bookkeeping records and, due to the discovered discrepancies, had to allocate corporate funds to address negative cash balances in certain properties. This situation highlighted the critical importance of accurate bookkeeping and the potential financial repercussions of oversight.



To keep yourself from experiencing a similar situation, get on a call with us for a free Appfolio bookkeeping training session.

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