Peter Lohmann's Podcast
Trust Accounting, Nightmare Stories & More with Alicia McClurg
Oct 2, 2024
Alicia McClurg, a Training and Development Specialist at ProfitCoach, dives into the nuances of trust accounting versus traditional accounting in property management. She discusses whether property managers should hire full-time bookkeepers and shares nightmare stories of accounting mishaps. The conversation highlights the role of software in tackling trust accounting challenges and the common issues that lead to financial discrepancies. Alicia also offers insights on resources for learning more about trust accounting and the importance of standardizing financial practices.
01:06:04
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Quick takeaways
- Trust accounting requires strict financial separation for each property, avoiding legal implications from mismanaged funds for property managers.
- Implementing a triple tie-out reconciliation process is essential to ensure the accuracy of financial records and regulatory compliance.
Deep dives
Understanding Trust Accounting
Trust accounting is crucial for property managers, as it involves managing money belonging to property owners and tenants. Unlike traditional small business accounting, which tracks a company's income and expenses, trust accounting requires maintaining separate accounts for different properties or portfolios. Each property operates like its own business unit, with its own incomes, expenses, and distributions, maintaining complete financial separation. Mismanagement in this area can lead to severe legal implications, as property managers are accountable for the proper handling of funds they don't own.
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