The Property Manager’s Year-End Countdown: Balance Sheet Health Check
The Danger of Ignoring Your Balance Sheet
Your Profit and Loss statement might look fine, but your Balance Sheet could be quietly waving a red flag. Loans that don’t tie, deposits lingering for months, or accounts receivable that never clear all point to hidden problems. Your Balance Sheet is more than a snapshot — it is a report on the health of your business.
Many property managers focus on income and expenses ignoring the Balance Sheet. The result can be missing assets, misstated liabilities, or surprises during audits. Checking it now ensures your business foundation is solid before year-end.
Why a Balance Sheet Check Matters
Reviewing your Balance Sheet helps you:
Catch Errors Early – Prevent old or duplicate balances from hiding real issues.
Ensure Accurate Loans & Deposits – Confirm loan balances, lines of credit, and deposits match statements.
Plan for Year-End Closures – Know what items need attention so nothing sneaks up during the busy holiday season.
Your Week 5 Action Plan
This week, focus on verifying all parts of your Balance Sheet. Dedicate 1–3 hours depending on the size of your portfolio.
Step 1: Review Your Balance Sheet (15 minutes)
Run a Balance Sheet as of the most recent month-end.
Scan for unusually high, low, or unchanged balances.
Check that new accounts, assets, or loans are properly added.
Mark any accounts that don’t make immediate sense — these are your investigation targets.
Step 2: Loans and Lines of Credit (15–30 minutes)
Verify balances match statements and are reconciled.
Confirm interest vs. principal postings align with your P&L.
Ensure closed accounts show zero and new accounts are properly set up.
Save related paperwork for easy access at tax time.
Step 3: Prepaid Expenses (15 minutes)
Review insurance, software subscriptions, and prepaid contracts.
Adjust for what was used this year versus what carries forward.
Set reminders for renewals or monthly amortization entries.
Step 4: Accrued Expenses (15 minutes)
Check utilities, credit card interest, and payroll liabilities.
Confirm accruals reflect expenses incurred but not yet paid.
Remove old or fully paid accruals that should have cleared.
Step 5: Deposits (15 minutes)
Verify security deposits, owner reserves, and guest deposits against trust account balances.
Check “Deposits Held” or “Owner Prepaid” accounts for accuracy.
Confirm owner reserve balances align with your owner ledger.
Step 6: Accounts Receivable / Accounts Payable (30–60 minutes)
Run AR/AP aging reports.
Clear out old or uncollectible owner receivables and duplicate payables.
Ensure all vendor payments are recorded and no stale credits remain.
Review outstanding owner reimbursements or pending bills to process before year-end.
Step 7: Create a Summary of Findings (20 minutes)
Note accounts needing adjustment, documentation, or follow-up.
Not everything needs to be fixed today — some items require collaboration.
Make a follow-up plan assigning each open item to the correct team member or vendor.
The Payoff
A Balance Sheet health check keeps your business stable, prevents surprises, and ensures you have a clear view of your assets and liabilities. By reviewing these items now, you’ll avoid last-minute stress and keep your year-end process smooth.
This is just Week 5 of our 12-part Year-End Countdown for Property Managers. Stay tuned for Week 6 next week.