The Property Manager’s Year-End Countdown: Review and Clean Up Your Chart of Accounts
The Pain of a Messy Chart of Accounts
I just reviewed a property manager's books. They had 14 different categories for “Repairs.” It took me 8 hours to untangle. A messy Chart of Accounts does more than annoy your accountant — it hides your real profitability. If you can’t see where money is going, it’s hard to make smart decisions or know which properties are truly profitable.
Many property managers keep old, duplicate, or vague account categories. Cleaning this up now prevents wasted time, wrong reports, and surprises at year-end.
Why Chart of Accounts Cleanup Matters
Simplifying your Chart of Accounts helps you:
See True Profitability – Know exactly what it costs to run each property or service.
Make Better Decisions – Compare income vs. costs and decide which properties or services to expand or adjust.
Streamline Reporting – A clear COA makes monthly, quarterly, and year-end reports easier to read and audit.
Your Week 3 Action Plan
This week, focus on reviewing and cleaning up your Chart of Accounts. Set aside 1–3 hours depending on the size of your portfolio.
Step 1: Pull a Full Chart of Accounts Report (15–30 minutes)
Export your COA from QuickBooks or your property management system.
Look for duplicates, inconsistencies, or vague category names.
Make notes but don’t delete or merge anything yet.
Step 2: Identify Redundant or Overlapping Accounts (30–60 minutes)
Find multiple versions of similar categories like Repairs vs. Maintenance or Cleaning vs. Housekeeping.
Consolidate where possible for simpler, cleaner reporting.
A shorter, summarized COA is easier to interpret and less overwhelming.
Look for decision-making insights:
• Compare Cleaning Income vs. Direct Cleaning Costs.
• Evaluate per-unit or per-reservation costs when deciding whether to add or keep properties.
Step 3: Simplify Core Account Structure (30–60 minutes)
Break your expenses into two main types:
Cost of Services (COS) – Costs directly tied to running your management services. Within COS, consider:
Pass-Through Expenses: Costs reimbursed by owners, like repairs, linens, or guest amenities.
Non-Pass-Through Expenses: Costs you absorb to deliver services, like your PMS, pricing tools, merchant fees, or maintenance software billed per unit.
Direct Service Costs: The services you provide and bill for, like concierge work, maintenance labor, or in-house cleaning.
Overhead Expenses – Costs for running your company, not tied to specific services, such as:
Administrative payroll
Accounting or general software (ChatGPT / Email / Adobe etc)
Office or warehouse rent
Business insurance
Professional development or training
Separating these clearly helps you see the real cost to serve and reveals your true profit margins.
The Payoff
By cleaning up your Chart of Accounts, you’ll get a clear picture of your business. Reports make sense, decisions are easier, and you avoid surprises at year-end. This is your foundation for smarter growth and better financial management.
This is just Week 3 of our 12-part Year-End Countdown for Property Managers. Stay tuned for Week 4 next week.