Few things strike fear in a property manager’s heart than being informed they’re being audited. If you take the necessary steps early to ensure your business is ready to handle it, it will significantly make things easier in the future should you receive such a notice. Here are some tips.
Organize your ledger accounts and start early. Instead of using generalized descriptions such as Utilities for multiple accounts, be more specific with how you label these so they’re easier to identify. Also try and get into the habit of collecting the necessary information such as addresses or social security numbers when adding a new vendor or property owner so that you won’t have to scramble when the year is about to end.
Ensure trust accounts are being managed properly. Trust accounts that are being used inappropriately or abused are generally the primary reason why the IRS decides to audit a property management business. Take the time to thoroughly research laws and make sure that these rules are being followed by everyone on your team. Being ignorant of the law is not a valid excuse during an audit.
Have a system in place for all procedures involving money handling and transactions. You could, for example, assign each of your employees a role and ensure that these roles and the rules associated with them are being followed correctly.
This update is provided by property management Miami FL Florida company ROI Property Management. We provide a complete array of services for landlords and tenants including rent collection, financial reporting, and more. Call 954.628.3411 to learn more about our full service, flat-rate pricing and how we can help you achieve the maximum return on investment.