Why Property Managers and Accountants Must Work Together
In commercial real estate, property managers operate the asset while accountants track its performance. When these critical functions aren't aligned, the consequences are immediate: missed opportunities, inflated variances, tenant disputes, and eroded trust with ownership.
What Property Managers Need to Master
1. Treat Budgets as Living Documents
Your budget isn't a year-end report, it's your operational playbook. Hold quarterly reviews with your accounting team to update forecasts based on vendor changes, project delays, and seasonal shifts. This keeps ownership informed and builds credibility.
2. Master the Art of Accruals
If work was completed this month but you don't accrue for it, your financials will mislead everyone. Picture this: you approve a $14,000 roof repair in late September, but the invoice arrives in October. Without proper accrual, September's NOI appears artificially high while October's variance suggests mismanagement.
3. Get CAM Billing Right the First Time
CAM errors destroy tenant relationships and trigger costly disputes. Review lease abstracts quarterly, track caps and base years religiously, and flag one-off expenses like vandalism or special events immediately.
4. Learn the CapEx vs OpEx Rules
Misclassification derails financials and confuses recovery calculations. The rule is simple: CapEx improves or extends value (new HVAC unit), while OpEx keeps things running (HVAC repair). Ask your accountant for a visual flowchart - and use it.
5. Speak the Language of Asset Management
Transform operational requests into business cases. Instead of "We need a new chiller," say "This $55K chiller replacement reduces repair costs, reduce tenant complaints, and is 80% recoverable over three years."
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What Accountants Need to Understand
1. Property Management Happens in Real Time
When property managers don't respond immediately to your coding questions, they might be evacuating a building, managing a flood, or meeting with fire marshals. Build flexibility into your processes.
2. "Miscellaneous Repairs" Is a Red Flag
When GL coding feels overwhelming, property managers default to catch-all categories. Create a one-page cheat sheet with common codes and real examples, make it fast, clear, and actionable.
3. CAM Logic Isn't Intuitive
Don't assume property managers understand what gets grossed up, prorated, or excluded. Encourage annual CAM training sessions at your company for property managers and create tracking tools that explain recovery mechanics in plain English.
4. Numbers Don't Tell the Whole Story
Property managers navigate capital projects, vendor issues, and tenant politics that don't appear in your reports. Before month-end, ask: "Any variances I should know about?" Context changes everything.
5. Focus on Education, Not Just Correction
When making adjustments or reclassifications, explain the reasoning. Property managers who understand the "why" will apply that knowledge going forward, creating faster close cycles and fewer errors.
Building the Bridge: Practical Solutions
Property Managers Should:
Establish financial habits: timely accruals, proactive forecasting, proper GL coding
Document savings and operational wins in financial terms
Communicate upcoming expenses before month-end
Accountants Should:
Create user-friendly tools: accrual templates, coding guides, variance worksheets
Provide context for financial decisions and adjustments
Encourage regular training sessions for property managers on CAM recovery and coding
Both Teams Should:
Embrace open communication
Create tools, trackers, timelines to stay aligned
Host 30-minute routine syncs to align on priorities
Develop shared checklists for common processes
Create feedback loops that improve accuracy over time
The Bottom Line
The best-performing commercial properties don't treat operations and accounting as separate functions, they integrate them. When property managers understand the financial impact of their decisions and accountants grasp the operational realities behind the numbers, magic happens: better NOI, stronger tenant relationships, and ownership trust that translates to career advancement.
The gap between property management and accounting isn't just operational, it's a competitive disadvantage. In today's market, the teams that bridge this divide will outperform those that don't.
What strategies have you used to improve collaboration between property management and accounting teams? Share your experiences in the comments.
