It’s that time of year again, when things in the office start getting a little crazy; the time some property managers dread. That’s correct; it’s end of financial year!
This can be one of the most stressful times of the year, but it really doesn’t have to be. Preparation is again the key, just like for end of month. This guide will take you through some tips on how to make this and future “end of financial years” run smoothly and, most of all, stress free.
Firstly, get those accounts paid! Around this time of year, a lot of phone calls and emails are received from owners asking to ensure that their accounts are paid before 30 June. As soon as you get these requests, check to ensure the owner has enough funds to actually pay these accounts from rent funds. If not, give your owner the option to either pay the account themselves or to transfer funds to the trust account, so you can pay them. There may be some accounts which owners have specifically instructed you not to pay this financial year. Ensure you keep these separate so they are processed after the End of Financial Year – do not leave the account floating around your desk. You don’t want to accidentally process this invoice in a mad rush.
Give your creditors a deadline for invoices. Just like end of month, give your creditors until a certain date to get all their invoices in. It doesn’t mean that they can get away with handing you a bunch of invoices on the day you run your process, just because it’s end of financial year! Do not leave it until the day you run the end of financial year process to enter the invoices. If you rush this procedure, mistakes can happen which will lead to an incorrect end of financial year statement for your owner.
Some agencies have processes in place where the owners only receive copies of paid accounts at the end of the financial year. Of course this saves time collating statements and accounts after each end of month, but it can be a big job at end of financial year if processes are not in place. A suggested process would be to file the paid invoices in the same order your statements print (that is, property alpha or owner alpha order) to make collating a lot quicker and easier.
Do not forget to charge the end of financial year statement fee. If your Managing Agency Agreements state that you charge owners a fee to produce this statement, remember to charge it! It is also important to check that you have charged the fee correctly and have not under- or overcharged your owner.
As it has been a year since producing the last batch of end of financial year statements, you want to ensure that you have removed any old global statement comments. This is also an opportunity to add a new global comment, if your software program allows for it.
This would be my number one tip: make sure the end of financial year statements are correct prior to sending them to your owners, particularly if you are charging owners for them! Ensure that all income and expenditure is reported correctly. You all know the grief caused when end of month statements are incorrect; now just imagine the grief caused by incorrect end of financial year statements. The size of your rent roll will determine how much time you need to put aside to do this, but please take the time to check! It will save you time in the long run. In addition to the above, it is still important to complete the entire normal pre-end of month checks:
- Ensure you have enough stationery. This includes cheques and printer toner.
- Check the letting fees, advertising fees and other fees charged throughout the month to ensure they are correct and you have not missed any.
- Check overpaid tenant rent, and retain these funds from the owner or refund the overpaid amount back to the tenant. Just like end of month, give your creditors until a certain date to get all their invoices in, and refund any overpaid amount back to the tenant.
- Make sure you hold any required funds from owners and have removed previously held funds if applicable.
- Ensure the bank reconciliation is balanced! This is extremely important!
Every point mentioned above should be completed before you even start to think about running your end of financial year process. Ideally, just like the day before end of month, block out time, do not take calls or answer emails and make no appointments, to allow time to complete these checks and processes.
Treat the day of running end of financial year just like you would end of month. You are just running a normal end of month with just a few extra steps along the way. So prepare, prepare, prepare and block out time, so you can run your end of financial year interruption free and stress free.