Chart of accounts for property managers: a setup that scales
A chart of accounts is accounting infrastructure. Set it up well and every report — property-level income statements, owner cash-flow summaries, year-end tax schedules — flows out cleanly. Set it up poorly and you spend your life manually adjusting data before you can trust a single number. Most property managers inherit a chart of accounts from a generic QuickBooks template that was never designed for property management. This is what a PM-specific setup actually looks like.
The core account ranges
Use numbered ranges so accounts sort consistently and new accounts can be inserted without renumbering everything. The standard structure maps to the balance sheet and income statement in this order:
- 1000–1999 Assets: operating cash, trust cash (separate account, separate range), accounts receivable, prepaid expenses.
- 2000–2999 Liabilities: accounts payable, tenant security deposits held, owner payables, GST/HST payable.
- 3000–3999 Equity: owner's capital, retained earnings.
- 4000–4999 Revenue: management fees, leasing fees, maintenance markup, late fees (where permitted), ancillary income.
- 5000–5999 Operating expenses: payroll, software, office, professional fees, insurance.
- 6000–6999 Property expenses: repairs and maintenance, utilities, landscaping, property taxes — posted by property.
The trust / operating split is not optional
Your trust account and your operating account must be different bank accounts, and they should map to different account ranges in your chart of accounts. Trust cash (the money you hold for owners and tenants) lives under 1010 or similar. Operating cash (your business's own money) lives under 1000. Commingling them in the same account range is how reconciliation errors multiply quietly.
Owner payables: the account most PMs set up wrong
When rent comes in, it isn't your income — it belongs to the owner, net of your fee. The standard treatment is to credit an owner payable liability account (in the 2000 range) for the net amount due to each owner. When you disburse, you debit that liability account. At any time, the sum of all owner payable balances should equal the amount you're holding for owners in trust. If those two numbers don't match, you have a reconciliation problem.
Owner draws vs. management fees
Your management fee is revenue (4000 range). The payment you send to the owner is a reduction of their payable balance (2000 range). Never record owner disbursements as an expense — they are not. Treating them as expenses overstates your costs and understates owner equity, producing misleading profitability reports.
Property-level tracking: class or location
True property-level income statements require every revenue and expense transaction to be tagged to a specific property. Most accounting systems support this through a class or location dimension. Set up one class or location per property and enforce the rule on every posting. Generic entries posted to no property are the number-one reason property-level reporting fails.
Income categories that work with CRA forms
Structure your expense sub-accounts to align with the categories on the T776: advertising, insurance, interest and bank charges, maintenance and repairs, management fees, property taxes, utilities. When your accounts mirror the form's categories, year-end reporting is a copy-and-paste rather than an accountant's afternoon.
- Accounting setup in Kera
- Three-way trust reconciliation guide
- Owner disbursements and statements
- More accounting playbooks
What accounts does a property management company need in its chart of accounts?
At minimum: operating cash, trust cash (separate account), accounts receivable, tenant deposits payable, owner payables, GST/HST payable, management fee revenue, and property expense sub-accounts for each T776 category (maintenance, insurance, utilities, property taxes, etc.). Add a class or location dimension to tag transactions to individual properties.
Should owner disbursements be recorded as an expense?
No. Owner disbursements are a reduction of the owner payable liability balance — the money you owe the owner that you're paying out. Recording them as expenses overstates your operating costs and produces misleading profit figures. Debit the owner payable account when you disburse.
How do I track property-level income and expenses?
Use a class or location dimension in your accounting system. Assign one class per property and require that every revenue and expense transaction carries a class tag. Without this, property-level income statements are impossible to produce without manual analysis.
Why doesn't a generic QuickBooks chart of accounts work for property management?
QuickBooks templates treat all income as your income and all outflows as expenses. Property management has a fundamentally different structure: most of the money flowing through your accounts belongs to owners, not to you. Trust accounting, owner payables, and security deposits held require a structure QuickBooks doesn't build by default.
How do I set up accounts for security deposits held?
Security deposits (or in Ontario, last-month's-rent deposits) are not your income. They are a liability you owe to the tenant. Create a liability account — typically in the 2000 range — called something like 'Tenant Deposits Held' and credit it when you receive a deposit. The corresponding cash should be in your trust account, not your operating account.
The right chart of accounts, out of the box
Kera comes pre-configured with PM-specific accounts, property tracking, and tax-aligned expense categories — ready to use from day one.
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