Property Management
Homeowner Associations
Mission Statement • Interactive Association Web Site
Fiscal Management • Physical Management
Mission Statement
Enhance the quality and desirability of the property & the Association.
The mission is to provide quality Fiscal and Physical management services that enhance real estate values and provide a harmonious synergetic atmosphere between the owners, the Board of Directors, the Managing Agent, the rental program, the resort guests, the on-site staff and the business owners.
Interactive Website
We design and build community websites specifically designed for a particular property. The site will link to Hawaii Property Management & Sales, Inc. main property management site. This makes it possible for Board Members and Owners to access certain information using a secured log-in and password.
• Board Controlled Content: Board members have full control over the content on the Association’s website. Since all of the features are dynamic, updating outdated information is as simple as logging in and making the change. If the Board decides to remove an unused or abused feature, the change can be made in one business day. These websites offers over 40 unique features specifically designed for Homeowner Associations and Management Companies.
• Board Members can post news letters, notices, and other important information.
• Owners can pay maintenance fees online.
• Owners can check their account balance, all charges and payments.
• Owners can access and print out Association documents such as CCR’s, By-Laws, House Rules, etc.
• Owners can express any concerns or make requests on-line.
Fiscal Management
Dave has mastered the financial management process by incorporating his 35 years experience and education with the top software available to the industry.
These financial statements are accurate, timely, and easy to read. The statements and a huge variety of special reports can be e-mailed to the client.
The following fiscal services will be discussed in detail: The proposed annual budget, reserve study, financial statements, and collection of delinquent accounts. These statements can be e-mailed directly to the client.
Proposed Annual Budget:
The proposed annual budget is submitted to the Board of Directors well in advance of the scheduled budget meeting and consists of a budget spread sheet, reserve spread sheet, any separate line item spreadsheets needed, and an accompanying cover letter.
The budget spread sheet lists all budgeted line items, the first column is the current year monthly budget that is in place, the second column is the most recent monthly average of the last seven months of actual receipts and expenditures, the third column is the proposed monthly budget, the fourth column is the variance between the existing monthly budget and the proposed monthly budget, and the fifth column is the proposed annual budget. The far right hand column has a brief explanation of any line items that are being proposed to change; either increases or decreases, and why. The cover letter discusses each proposed change in greater detail.
Any proposed changes to the reserves are also discussed in the cover letter. Included is a printout of the reserve study schedules with the proposed changes.
Any specific line item analysis is included. An example would be electrical projections based on kilo watt hours usage and upcoming rate increases.
Reserve Study:
The reserve study consists of schedules “A, B, and C.”
Schedule “A” is a ten year projection of Estimated Cash Reserve Balances and Liability Percent Funded. Schedule “B” is a ten year projection of Reserves Scheduled Year Funding Estimates detailing each specific line item component, estimated cost, useful life, age, remaining life, and year to be replaced. Schedule “C” is a ten year projection calculating each year’s component liability cost based on years remaining calculated with inflation factors, then summing each components liability for each year.
Each year the individual components of Schedule “B” are reviewed for the accuracy of the remaining life and estimated cost. Any proposed adjustments are presented.
Financial Statements:
The monthly financial statements consist of an Income & Expense Statement, Balance Sheet, Reserve Statement, Owner Activity Report, Prepaid Owner Report, Aged Delinquency Report, Detailed General Ledger Trial Balance, Bank Statements, and Bank Statement Reconciliation’s.
Income & Expense Statement:
The Income & Expense Statement is formatted in columns with actual monthly income and expense figures, monthly budget for each line item, variances, actual year-to-date totals per line item, year-to-date budget per line item, variances, then finally the annual budget per line item. This annual budget line item is a valuable tool that provides easy access to the budget while reading the financial statements. Each line item is identified by chart of account number, thereby providing easy reference to the General Ledger.
(Please see General Ledger discussion below of this easy reference.)
Balance Sheet:
The Balance Sheet is formatted with the identification of the line items of Assets, Liabilities, and Equity in a standard layout. However, the numerical columns are formatted in an easy to interpret “Fund Balances” layout whereby the first column is “Operating” assets, liabilities, and equity (such as checking account bank balance), the second column is “Reserve” assets, liabilities, and equity (such as savings accounts and CD bank balances), the third column is “Other” assets, liabilities, and equity (if any), and the fourth column sums these items together. Each line item on the Balance Sheet is also identified by chart of account number, thereby providing easy reference to the General Ledger.
Reserve Statement:
The Reserve Statement is formatted according to CPA auditor’s recommendations as well as the Real Estate Commission’s recommendations. Each monthly statement totals year-to-date figures as to beginning balance, owner contributions, interest, reserve expenditures, and ending balance.
Owner Activity Report:
The Owner Activity Report is a clear and easy to read account of each owner. They are listed by unit number. It includes the beginning balance for that month, all charges for the month, amount and date of payments made, and ending balance, as well as year-to-date totals. These reports are supplemented with individual owner reports. Upon request of any owner, their account statement is provided identifying all items owed with a total, as well as a complete history of their account. The histories are permanently retained. They identify date of each charge to the account, amount of each payment, payment application, check number, posting date, bank deposit date, and any balance due.
Prepaid Owner Report:
This report simply states by unit number all prepaid owners, amount, and totals.
Aged Delinquency Report:
The basis of the report is a standard format listing each delinquent account by unit number, identifying each item (such as maintenance fee, late fee, etc.), aging the items, then providing a total due. However, what is not a standard format is the “Notes” following each delinquent account. The notes are a permanent record in each owner’s account. They consist of the date collection action was taken and the type of action taken. This is a very valuable tool for both the Board of Directors and the Managing Agent, which allows for a quick reference following each account as to the diligence being followed to collect these funds.
Regarding the collection of delinquent accounts, the Managing Agent will propose that the Board of Directors pass and record into the meeting minutes an Association collection policy. The policy identifies specific action to be taken at specified intervals based on the severity of the delinquent amount. This policy is carried out by the Managing Agent with the assistance of the Treasurer of the Board and the Association’s legal counsel. The policy is followed uniformly and consistently with all delinquent owners.
Detailed General Ledger Trial Balance:
The accounting of almost all businesses is processed into the General Ledger. All reports, such as the Income and Expense Statement, Balance Sheet, and any other reports are information obtained from the General Ledger. The reason it is called a “Trail Balance” is because the accounting is referred to as a “double entry” system. This does not mean there are two sets of books. What the “double entry” system refers to is that an account cannot be debited or credited unless a corresponding account is also either debited or credited. Thereby if one account is debited, then the other is credited, and vice-versa. An example would be that when as owner’s maintenance fee check is logged into the General Ledger, the account “Income” is credited and the account “Operating Checking Account” is debited. Another example is when an invoice is paid, such as landscaping, the “Landscaping” line item is debited and the “Operating Checking Account” is credited. What this system does is keep the books in “balance.” This system was developed to help track and correct “human error.” Although not foolproof, when the books are “out of balance,” there was definitely an error made, and needs to be corrected.
Human error was a much bigger factor in pre-computer days. The General Ledgers were about the size of the accountant’s desk. The entries were made in pencil for a good reason. When those entries were posted to the various accounts, a check mark was made next to the entry to indicate it was “posted.”
The modern computer age greatly enhanced the accounting function. The accounting software is programmed to default most entries, such as the ones described above. When a maintenance fee is posted to “Income,” it automatically will post the second entry into the “Operating Checking Account.” Human error is still a factor.
It is imperative that the person assigned to an Associations’ bookkeeping account is well trained and very experienced. Often times a management company will “low bid” the management fee in order to secure the account; the end result being that they can’t afford to hire competent staff for either bookkeeping or property supervision. Many accounting errors can take place that are unnoticed for quite some time.
Examples of accounting errors are when one owner’s maintenance fee is erroneously posted to another owner’s account. The owner that is actually current then receives a late notice. Then the owner that is actually current must prove they paid with their canceled check. That’s when all hell breaks loose. Other error examples are when an invoice gets paid twice or the invoice could have been posted to the wrong account. The worst mistake I ever saw someone else make was to actually pay an invoice belonging to one property out of the account of a different property.
When these mistakes continue unchecked, the accounting function is nothing less than a horrifying mess; sometimes it can be cleaned up, and sometimes it can’t.
There are self-audit techniques that Hawaii Property Management & Sales, Inc. employ to help prevent and eliminate errors before they occur.
Hawaii Property Management & Sales, Inc. uses state-of-the-art software specifically tailored for Homeowner Associations. An example would be when a maintenance fee is credited to “Income” and debited to “Operating Checking Account,” it is also programmed to automatically list that information in each of the owners’ activity reports.
The basis of the General Ledger is also a standard format identifying all items by “chart of account” number listed in the left column. (The software is programmed using the “chart of account” numbers.) These are the chart of account numbers listed on the Income & Expense Statement and Balance Sheet, thereby providing an easy reference. As an example of this easy reference, each line item on the Income & Expense Statement has a total for that period. What comprises that total is listed under the same chart of account number on the General Ledger. There may have been numerous receipts or payments over the course of the accounting period for that line item total. By referring to the General Ledger a complete breakdown is listed. For further easy reference, the far right column has an A/P Reference whereby when the actual computer generated check is being inputted; a brief description is included when more clarity is deemed helpful.
One of the most valuable and helpful reports provided to each Board Member is a spiral bound print out of the entire year General Ledger; for instance January 1st through December 31st. Attached to the front is the entire year Income & Expense Statement, ending Balance Sheet, and annual Reserve Statement. This provides easy answers to many questioned asked by owners usually at Annual Meetings or Board Meetings. Owners many times ask “How much did we spend for this? Why did we spend this amount for this line item, it seems awful high?” With this report, one can simply identify the line item on the Income & Expense Statement, and then refer to the corresponding chart of account number in the spiral bound General Ledger and every expenditure of that line item total for the year will be listed, thus being able to provide a detailed professional immediate response to these questions. Normally the owner is not only satisfied with the detailed response, but they are almost always impressed that they received an immediate response other than, “Well, we will have to get back to you on that one.”
Bank Statements and Bank Statement Reconciliation’s:
The reconciliation statements that accompany the copies of the bank statements are also easy to read. Each outstanding check is listed. Any bank deposit posted and made after the period closing date is listed. The checking account balance is compared to the General Ledger balance and the reconciling balance is compared to the bank statement balance; hence balanced books.
Summary of the Financial Statements:
Financial statements are completed and distributed no later than the 20th day following the proceeding month. However, if there is a Board meeting or Owners’ meeting, the statements will be produced right up to the most recent month ending. As an example, if a Board meeting is on the 3rd day of May, financial statements will be completed ending April 30th, with bank reconciliation’s to follow. This allows the Board and Management to report on the most recent information available.
The financial management function follows CPA quality Generally Accepted Accounting Principles (GAAP), utilizing the double entry system of accounting, whereby one account cannot be debited or credited unless a corresponding account is also debited or credited. Self audit techniques are employed to prevent and eliminate errors before they occur.
The Financial Statements are accurate, timely, and easy to interpret. They are designed as a valuable working tool for both the Board of Directors and the Managing Agent to diligently monitor the ongoing financial status of the Association. Sound Fiscal Management and superior Physical Management services are what enhance real estate values for all owners, and provide harmony in a Homeowners Association.
Physical Management
The following Physical Management services will discuss the supervision of on-site personnel using the method known as Management by Objective, and also discuss maintenance procedures and house-rule enforcement.
Management by Objective (MBO):
Management by Objective is taught by Professors of Human Resource Management at many Universities throughout the United States. It is a valuable tool with proven results.
The premise of MBO is to create a team environment whereby everyone involved is working towards and participating in the achievement of a common goal. Although those involved have different titles and job duties, the words “boss” and “superior” are discouraged.
Step One: Have a meeting with the supervisor and the employee, or group of employees in a common department, discuss the common goals of the team, provide a framework of how to proceed, and allow the employee or group to participate in the formulation of “how to” obtain these goals. This is not meant to have the employees create the job descriptions, as the supervisor will already have a somewhat specific outline of what needs to be done. The purpose is to allow the employee to participate in a team plan.
Step Two: Identify the objectives and the methods to proceed to reach the goals. Allow the employee to provide feedback and suggestions as to a better way to proceed. Allow the employee to set time frames.
Step Three: Periodic review of the level of goal attainment. If some areas are lacking, again allow input from the employees as how to improve the management plan to reach the objectives.
Step Four: Continue the periodic reviews as needed.
The use of MBO is to create a team environment. It is not intended to replace common sense. There are employees that will perform well and ones that do not. Certainly the ones that don’t will either have to step up to the job or be replaced.
MBO is a tool designed to compliment years of experience. It is important that any supervisor recognize the honor and respect due to all occupations which are useful to society.
MBO is a proven concept that when the employees participate in the management plan, it creates a teamwork environment that many times produces exceptional results.
Maintenance Procedures:
A successful program for the maintenance of the common elements of a property begins with the qualifications of the Property Manager that supervises the on-site staff and provides well thought-out options and recommendations to the Board of Directors.
The President and Principal Broker for Hawaii Property Management & Sales, Inc. has 35 years of real estate management experience, as well as formerly being a licensed General Building Contractor in the State of California. He built a 104 unit apartment project, and was involved with numerous rehabilitations of distressed multi-unit properties.
The Senior Property Manager for Hawaii Property Management & Sales, Inc. has 27 years of real estate management experience. He was also a licensed General Building Contractor.
Between these two gentlemen, they have a combined experience of 62 years in the real estate industry.
1. The Managing Agent conducts regular detailed property inspections.
2. A regular maintenance agenda schedule is developed particular to that property.
3. This maintenance schedule is presented to the Board of Directors for approval, and then incorporated into the annual budget.
4. An initial review is made of the existing service contracts to assess their quality of service and fees being charged. Recommendations may then be made to the Board of Directors.
5. Good judgment must be used as to whether a particular maintenance item can be accomplished using in-house personnel at great savings, or if an item requires licensed professionals due to the complexity of the job and the liabilities to the Association.
Under the direction and supervision of Hawaii Property Management & Sales, Inc. many items normally subbed-out to vendors and contractors are done in-house at a great savings to the Association.
Hawaii Property Management & Sales, Inc. is also skilled and experienced to supervise large maintenance projects, such as painting the buildings, replacing the roof, resurfacing the parking lots, resurfacing the pools and decks, or installing an irrigation well, as examples.
The first step for the large dollar projects is to develop a specification sheet. Submit the specifications to the Board of Directors for any editing and then approval.
The second step is to contact contractors with proven track records to bid according to the specifications, and then verify that licenses and insurance requirements are met. Once the bid is accepted, "A certificate of additionally insured" is obtained from the contractor naming the Association and management company as additionally insured.
The third step is to present the bids to the Board of Directors, with comments regarding each contractor, and make a recommendation. In addition, the Managing Agent provides an analysis of the financial impact of the proposed project.
House-rule Enforcement
House-rules must be periodically reviewed by competent legal staff to insure that the house rules are not in conflict with Association documents and that they are reasonable. House-rules must be enforced consistently and uniformly using common sense that enhances the atmosphere of the property.
In conclusion, the services of Hawaii Property Management & Sales, Inc. helps to insure that the Board of Directors proceeds with spending the Association funds in an efficient, professional, and diligent manner as fiduciaries.
Property Management Services
Retail, Commercial, Office, & Industrial Properties
Mission Statement • Interactive Property Website
Leasing • Physical Management • Fiscal Management
Mission Statement
The mission is to maximize the return on investment for the owner(s). This is done by ensuring the property is fully leased to qualified tenants, the “curb appeal” is maintained to the highest standards by a diligent and cost effective maintenance program, and the financial management is accurate, timely, and easy to interpret thereby providing the valuable tools necessary for both the owner and the management company to effectively make ongoing management decisions.
Interactive Property Website
We design and build websites specifically designed for a particular property. The site will link to Hawaii Property Management & Sales, Inc. main property management site.
The purpose of the property website is to provide a central arena for all the businesses to advertise, as well as expose the property to more foot traffic and potential new tenants.
The tenants can log into the site with a user name and password and communicate directly with the management company for lease rent balances owed, requested maintenance to be done, upcoming scheduled maintenance items with description and date to be performed, newsletters from the Managing Agent or the Owner, or any other pertinent information.
Leasing
K. David Josephson, President & Principal Broker, is a leasing specialist able to lease space many others have tried to without success. Why?
Because Dave’s first job in real estate in 1976 was with a leasing specialist company named “Special Occupancy Service, Inc.” (SOS) Dave became the top salesman in the firm within his first 3 months of employment.
SOS specialized in the rapid leasing to qualified tenants on properties throughout the United States; many of which were in very tough markets.
How did they do it? Dave would be happy to discuss that with you in person.
Lease Negotiations & Re-negotiations:
Dave masterfully blends the right lease for the particular tenant with the optimum return for the property owner. How? Dave understands businesses, their owners, their needs to be successful, and puts together a lease plan that ensures the success of the business and the long-term rent returns for the property owner.
Many properties are “stale.” The businesses are not successful; there is ugly empty space, no foot traffic, etc. Dave changes all that. He leases up the property with qualified tenants and helps them to become and maintain a successful business. This creates a “happy” property with happy successful tenants, lots of foot traffic, and a coordinated effort to group business advertising together into a pool to not only promote the businesses, which they pay for the advertising, but also to promote the property as well.
Physical Management
Maintenance Procedures:
A successful program for the maintenance of any property begins with the qualifications of the Property Manager.
The President & Principal Broker for Hawaii Property Management & Sales, Inc. has 35 years of real estate management experience, as well as formerly being a licensed General Building Contractor in the State of California. The Managing Agent built a 104 unit apartment project, and was involved with numerous rehabilitations of distressed multi-unit properties, retail, commercial, office, and industrial properties.
The Senior Property manager for Hawaii Property Management & Sales, Inc. has 27 years of real estate management experience. He was also a licensed General Building Contractor.
Between these two gentlemen, they have a combined experience of 62 years in the real estate industry.
1. The Property Manager conducts an initial property inspection and then follows with regularly scheduled detailed property inspections.
2. A regular maintenance agenda schedule is developed particular to that property, and is incorporated into the Owner approved budget.
3. An initial review is made of the existing service contracts to assess their quality of service and fees being charged. Recommendations may then be made to the Owner, or if the Owner prefers, Management will make any needed changes.
Hawaii Property Management & Sales, Inc. is also skilled and experienced to supervise large maintenance projects, such as painting the buildings, replacing the roof, and resurfacing the parking lots.
The first step for the large dollar projects is to develop a specification sheet. Then submit the specifications to the Owner for any editing and then approval.
The second step is to contact contractors with proven track records to bid according to the specifications, and then verify that licenses and insurance requirements are met. Once the bid is accepted, "A certificate of additionally insured" is obtained from the contractor naming the property owner and management company as additionally insured.
The third step is to present the bids to the Owner, with comments regarding each contractor, and make a recommendation. In addition, the Property Manager provides an analysis of the financial impact of the proposed project.
Fiscal Management
Dave has mastered the financial management process by incorporating his 35 years experience and education with the top software available to the industry.
These financial statements are accurate, timely, and easy to read. The statements and a huge variety of special reports can be e-mailed to the client.
These statements include: Proposed Annual budget, Reserve Study, Income & Expense Statement, Balance Sheet, General Ledger, Bank Reconciliations, Tenant Activity Report showing all charges, payments, and other information, Delinquency Report with chronological history of action taken, Budgets, Reserves, and any other reports a property owner may prefer.
Proposed Annual Budget:
The proposed annual budget is submitted to the Owner well in advance of the next fiscal year.
The budget spread sheet lists all budgeted line items, the first column is the current year monthly budget that is in place, the second column is the most recent monthly average of the last seven months of actual receipts and expenditures, the third column is the proposed monthly budget, the fourth column is the variance between the existing monthly budget and the proposed monthly budget, and the fifth column is the proposed annual budget. The far right hand column has a brief explanation of any line items that are being proposed to change; either increases or decreases, and why. The cover letter discusses each proposed change in greater detail, such as an analysis of each lease and its payment terms and various property expenses.
Any specific line item analysis is included. An example would be electrical projections based on kilo watt hour usage and upcoming rate increases.
Once the budget is reviewed and approved, the Common Area Maintenance fee charged to the tenants are now in place for the next fiscal year.
Reserve Study:
The reserve study consists of a future projection of major building and property components estimated useful life and estimated cost; such as roof replacement, parking lot re-seal or re-pave, painting the buildings, etc. This is a valuable tool for the Owner to project cash flow requirements in the future.
Each year the individual components are reviewed for the accuracy of the remaining life and estimated cost. Any proposed adjustments are presented.
Financial Statements:
The monthly financial statements consist of an Income & Expense Statement, Balance Sheet, Tenant Activity Report, Prepaid Tenant Report, Aged Delinquency Report, Detailed General Ledger Trial Balance, Bank Statements, and Bank Statement Reconciliation’s.
Income & Expense Statement:
The Income & Expense Statement is formatted in columns with actual monthly income and expense figures, monthly budget for each line item, variances, actual year-to-date totals per line item, year-to-date budget per line item, variances, then finally the annual budget per line item. This annual budget line item is a valuable tool that provides easy access to the budget while reading the financial statements. Each line item is identified by chart of account number, thereby providing easy reference to the General Ledger.
(Please see General Ledger discussion below of this easy reference.)
Balance Sheet:
The Balance Sheet is formatted with the identification of the line items of Assets, Liabilities, and Equity in a standard layout. However, the numerical columns are formatted in an easy to interpret “Fund Balances” layout whereby the first column is “Operating” assets, liabilities, and equity (such as checking account bank balance), the second column is “Reserve” assets, liabilities, and equity (such as savings accounts and CD bank balances), the third column is “Other” assets, liabilities, and equity (if any), and the fourth column sums these items together. Each line item on the Balance Sheet is also identified by chart of account number, thereby providing easy reference to the General Ledger.
Tenant Activity Report:
The Tenant Activity Report is a clear and easy to read account of each tenant listed by unit number, the beginning balance for that month, all charges for the month, amount and date of payments made, and ending balance, as well as year-to-date totals. These reports are supplemented with individual tenant reports providing a complete history of their account. The histories are permanently retained, and identify date of each charge to the account, amount of each payment, payment application, check number, posting date, bank deposit date, and any balance due.
Prepaid Tenant Report:
This report simply states by unit number all prepaid tenants, amount, and totals.
Aged Delinquency Report:
The basis of the report is a standard format listing each delinquent account by unit number, identifying each item (such as lease rent, CAM, late fee, etc.), aging the items, and then providing a total due. However, what is not a standard format is the “Notes” following each delinquent account. The notes are a permanent record in each tenant’s account. They consist of the date collection action was taken and the type of action taken. This is a very valuable tool to both the Owner and the Managing Agent, which allows for a quick reference following each account as to the diligence being followed to collect these funds.
The Managing Agent will interface with the Owner regarding any severe delinquent accounts ascertaining if any negations should be offered to the tenant, or if they should be evicted.
Detailed General Ledger Trial Balance:
The accounting of almost all businesses is processed into the General Ledger. All reports, such as the Income and Expense Statement, Balance Sheet, and any other reports are information obtained from the General Ledger. The reason it is called a “Trail Balance” is because the accounting is referred to as a “double entry” system. This does not mean there are two sets of books. What the “double entry” system refers to is that an account cannot be debited or credited unless a corresponding account is also either debited or credited. Thereby if one account is debited, then the other is credited, and vice-versa. An example would be that when the tenant’s lease payment check is logged into the General Ledger, the account “Income” is credited and the account “Operating Checking Account” is debited. Another example is when an invoice is paid, such as landscaping, the “Landscaping” line item is debited and the “Operating Checking Account” is credited. What this system does is keep the books in “balance.” This system was developed to help track and correct “human error.” Although not foolproof, when the books are “out of balance,” there was definitely an error made, and needs to be found corrected.
Human error was a much bigger factor in pre-computer days. The General Ledgers were about the size of the accountant’s desk. The entries were made in pencil for a good reason. When those entries were posted to the various accounts, a check mark was made next to the entry to indicate it was “posted.”
The modern computer age greatly enhanced the accounting function. The accounting software is programmed to default most entries, such as the ones described above. When a tenant’s lease rent is posted to “Income,” it automatically will post the second entry into the “Operating Checking Account.” Human error is still a factor.
It is imperative that the person assigned to the Property’s bookkeeping account is well trained and very experienced. Often times a management company will “low bid” the management fee in order to secure the account; the end result being that they can’t afford to hire competent staff for either bookkeeping or property supervision. Many accounting errors can take place that are unnoticed for quite some time.
Examples of accounting errors are when one tenant’s lease rent or CAM is erroneously posted to another tenant’s account. The tenant that is actually current then receives a late notice. Then the tenant that is actually current must prove they paid with their canceled check. That’s when all hell breaks loose. Other error examples are when an invoice gets paid twice or the invoice is posted to the wrong account. The worst mistake I ever saw someone else make was to actually pay an invoice belonging to one property out of the account of a different property.
When these mistakes continue unchecked, the accounting function is nothing less than a horrifying mess; sometimes it can be cleaned up, and sometimes it can’t.
There are self-audit techniques that Hawaii Property Management & Sales, Inc. employs to help prevent and eliminate errors before they occur. Examples are when rent checks are entered, before the “post” key is hit, each check is compared the entry on the computer screen, verifying that it is the correct tenant for that unit number and the amount of the check and check number are accurate, only then is the “post” key selected. The computer will print the deposit slip, thereby eliminating any human error. Another example is when a batch of Accounts Payable are being entered. Prior to the entries, each vendor history is activated on the screen and the invoice is compared to the history thereby verifying if the invoice was already paid or if the payment on the “previous balance” was already paid and therefor a total lesser amount due is owed. The same double check of the entries is made prior to “posting.”
Hawaii Property Management & Sales, Inc. uses state-of-the-art software specifically tailored for Real Estate Management. An example would be when a lease rent check is credited to “Income” and debited to “Operating Checking Account,” it is also programmed to automatically list that information in each of the tenant’s activity reports.
The basis of the General Ledger is also a standard format identifying all items by “chart of account” number listed in the left column. (The software is programmed using the “chart of account” numbers.) These are the chart of account numbers listed on the Income & Expense Statement and Balance Sheet, thereby providing an easy reference. As an example of this easy reference, each line item on the Income & Expense Statement has a total for that period. What comprises that total is listed under the same chart of account number on the General Ledger. There may have been numerous receipts or payments over the course of the accounting period for that line item total. By referring to the General Ledger a complete breakdown is listed. For further easy reference, the far right column has an A/P Reference whereby when the actual computer generated check is being inputted; a brief description is included when more clarity is deemed helpful.
One of the most valuable and helpful reports provided to each Owner is a spiral bound print out of the entire year General Ledger; for instance January 1st through December 31st. Attached to the front is the entire year Income & Expense Statement and ending Balance Sheet. This provides easy answers to many questions. With this report, one can simply identify the line item on the Income & Expense Statement, and then refer to the corresponding chart of account number in the spiral bound General Ledger. Every expenditure of that line item total for the year will be listed.
Bank Statements and Bank Statement Reconciliation’s:
The reconciliation statements that accompany the copies of the bank statements are also easy to read. Each outstanding check is listed. Any bank deposit posted and made after the period closing date is listed. The checking account balance is compared to the General Ledger balance and the reconciling balance is compared to the bank statement balance; hence balanced books.
Summary of the Financial Statements:
Financial statements are completed and distributed no later than the 20th day following the proceeding month.
The financial management function follows CPA quality Generally Accepted Accounting Principles (GAAP), utilizing the double entry system of accounting. Self audit techniques are employed to prevent and eliminate errors before they occur.
The Financial Statements are accurate, timely, and easy to interpret. They are designed as a valuable working tool for both the Owner the Managing Agent to diligently monitor the ongoing financial status of the property. Sound Fiscal Management and superior Physical Management services are what enhance real estate values.
In conclusion, the services of Hawaii Property Management & Sales, Inc.
helps to insure that the Owner is getting quality services at the best prices. The property maintains itself in an attractive and appealing condition with properly functioning systems. This enhances the lessee’s ability to have a successful business, which is the heart and soul of a profitable commercial real estate investment...
