The Bottom Line
Optimizing Your AppFolio Accounting: A Guide for Property Managers
AppFolio is a powerful property management software that streamlines operations, from tenant screening to rent collection. However, many property managers find AppFolio’s accounting features challenging to navigate. Ensuring your books are accurate and financial reports are meaningful requires a deep understanding of AppFolio’s accounting system.
Understanding AppFolio Accounting
Unlike traditional accounting software, AppFolio operates on a cash-basis system with some accrual features. This structure makes it easy to track income and expenses, but reconciling accounts and generating accurate financial statements can become complicated if not properly managed. Key features of AppFolio’s accounting system include:
- Automated Bank Reconciliation – Sync your transactions directly with your bank for streamlined reconciliation.
- Tenant and Owner Ledgers – Keep detailed records of tenant payments and owner distributions.
- Custom Reporting – Generate cash flow statements, balance sheets, and owner statements tailored to your needs.
Common Challenges in AppFolio Accounting
Many property managers struggle with:
- Bank Reconciliation Errors – Transactions may not match due to timing differences or manual entry mistakes.
- Incorrectly Categorized Transactions – Misclassified expenses and income can lead to inaccurate financial statements.
- Owner Distribution Tracking – Properly recording and allocating owner distributions is critical to maintaining accurate records.
Best Practices for AppFolio Accounting
To optimize your AppFolio accounting and avoid costly mistakes, consider these best practices:
- Regular Reconciliations – Reconcile bank accounts at least monthly to catch discrepancies early.
- Consistent Chart of Accounts – Maintain a well-structured chart of accounts to ensure accuracy in reporting.
- Owner & Tenant Ledger Reviews – Periodically review ledgers to confirm all transactions are recorded correctly.
- Outsource Bookkeeping – If managing AppFolio’s accounting features is too time-consuming, consider outsourcing to professionals who specialize in property management accounting.
How We Can Help
As an accounting firm experienced in AppFolio, we help property managers maintain accurate financial records, reconcile accounts, and generate meaningful financial reports. If you’re struggling with AppFolio’s accounting system or want to ensure compliance with best practices, our team can provide expert guidance and support.
AppFolio Cleanup
Many property managers move to AppFolio from another property management or accounting system. While AppFolio is a powerful platform, it is very different from most other software — especially when it comes to AppFolio accounting, trust accounting, and reporting.
Because of these differences, data imported or recreated during the transition is often not fully cleaned up or properly aligned with AppFolio best practices. On the surface, the books may seem fine, but underlying issues can affect the accuracy of financial reports and owner statements.
Common Issues After Switching to AppFolio
After a transition from another system, we often see:
- Chart of accounts that doesn’t match AppFolio reporting standards
- Income and expenses mapped incorrectly during data import
- Beginning balances that don’t reconcile to bank or trust accounts
- Owner equity and trust balances that don’t tie out
- Duplicate vendors, properties, or accounts created during setup
- Reports that don’t match expectations from prior software
These issues are common and usually result from the differences in AppFolio accounting structure.
Why AppFolio Cleanup Matters
When cleanup is skipped after moving to AppFolio, errors compound over time. Reconciliations become harder, reports lose reliability, and it becomes difficult to explain numbers to owners or stakeholders.
A professional AppFolio cleanup ensures:
- Accurate starting balances in AppFolio
- Bank and trust accounts fully reconciled
- Owner statements and property reports that are reliable
- A setup designed for long-term growth and accurate AppFolio accounting
Getting this right early — or correcting it later — saves significant time and stress.
Our AppFolio Cleanup Services
Our AppFolio cleanup services include:
- Reviewing and correcting data after a software transition
- Verifying beginning balances and account mappings
- Cleaning up charts of accounts, vendors, and properties
- Resolving reconciliation issues and unexplained variances
- Ensuring financial reports are accurate and actionable
We also work with existing AppFolio users who may not have had their accounts reconciled in a while or who know something is off but aren’t sure where to start.
Final Thoughts
Whether you recently switched to AppFolio or have been using it for years, a proper AppFolio cleanup can bring clarity and confidence back to your accounting. Accurate AppFolio accounting and reconciled accounts make financial reports easier to trust — and your property management business easier to run.
Margin vs. Markup: Understanding the Difference
Many business owners confuse margin and markup, leading to pricing mistakes that impact profitability. While both are used in pricing strategies, they serve different purposes and can significantly affect your bottom line.
Margin vs. Markup Explained
Margin (Gross Profit Margin) measures profitability as a percentage of sales revenue after deducting costs:
Margin (%) = [(Selling Price - Cost) / Selling Price] × 100. Example: If you sell a product for $100 and it costs $60, the margin is 40%.
Markup is the percentage increase added to cost to determine the selling price:
Markup (%) = [(Selling Price - Cost) / Cost] × 100. Example: A product costing $60 with a $100 selling price has a 66.67% markup.
Why the Difference Matters
Understanding the distinction between margin and markup is crucial for setting the right prices:
- Margin is based on sales price, while markup is based on cost.
- Applying the wrong percentage can lead to underpricing, reducing profits, or overpricing, making products less competitive.
- To achieve a target margin, use the formula: Markup = Margin / (1 - Margin)
Ensuring Profitable Pricing
If you're unsure how to apply margin and markup correctly, we can help! Contact us for expert financial guidance to optimize your pricing strategy and maximize profitability.