Bank Reconciliation & 3-Way Tie
We help property managers maintain financial accuracy and full compliance through detailed bank reconciliations and the essential 3-way tie process. Our team ensures your trust accounts, deposits, and operating accounts are aligned every single month.
Accurate financial reporting is critical in property management, especially when handling multiple accounts and client funds. At WPM Accounting, we specialize in ensuring your financial records align perfectly with your bank statements. Our bank reconciliation and 3-way tie services are designed to help property managers stay compliant, avoid costly mistakes, and build trust with property owners and stakeholders.
What is Bank Reconciliation & 3-Way Tie in Property Management?
Bank reconciliation is the process of comparing your accounting records to actual bank statements to ensure every transaction is accounted for. In property management, this includes trust accounts, security deposits, and operating funds.
A 3-way tie goes a step further: it matches the bank balance, general ledger, and owner balances in your property management software. This process is a legal requirement in many states and crucial for accurate reporting, trust accounting compliance, and building trust with clients.
Trust Account Reconciliation
We reconcile your trust accounts monthly to ensure that tenant payments and owner disbursements are properly tracked and error-free. This protects your business from compliance issues and maintains transparency in your accounting records.
Security Deposit Reconciliation
Our team makes sure your security deposit account is accurately tracked and separate from your operating funds. We reconcile deposits monthly, helping you stay compliant with regulations and prepared for tenant move-outs.
Operating (Management) Account Reconciliation
Your operating or management account covers day-to-day expenses and income. We reconcile this account to ensure that vendor payments, management fees, and other charges are properly recorded and match actual bank activity.
Performing a Full 3-Way Tie
This is where we bring everything together. Each month, we perform a 3-way tie, aligning the bank balance, owner ledger, and general ledger. This step is critical to avoid discrepancies and is often required in property management audits and trust account regulations.
1099s for Owners and Vendors
As part of our broader financial services, we generate and file 1099s for property owners and vendors at year-end. While not part of monthly reconciliations, it's a complementary service that ensures you remain compliant with IRS reporting standards.
Why Bank Reconciliation & 3-Way Tie Matters
Failing to reconcile accounts or skipping the 3-way tie can lead to misallocated funds, legal penalties, and loss of trust. Our service ensures your records are always aligned so you can focus on managing properties, not chasing numbers.
The Role of Bank Reconciliation & 3-Way Tie in Financial Accuracy
Accurate financial reporting starts with consistent bank reconciliation and a proper 3-way tie. These processes ensure that every dollar is accounted for, reducing errors and preventing future discrepancies. For property managers, this means dependable records and smooth operations.
How We Handle Bank Reconciliation & 3-Way Tie for Property Managers
Common Questions: Bank Reconciliation & 3-Way Tie Services
1. What is a 3-way tie in property management?
A 3-way tie is a monthly reconciliation process that ensures the trust bank account balance, owner ledger, and general ledger all match. This confirms that your financial records are accurate and compliant with trust account regulations.
2. Why is bank reconciliation important in property management?
Bank reconciliation helps detect errors, fraud, and discrepancies early. It ensures that all transactions are recorded correctly and keeps your financial records accurate, especially when managing client and tenant funds.
3. How often should a 3-way tie be performed?
A 3-way tie should be performed every month. Regular monthly reconciliation is key to maintaining compliance and financial transparency in property management.
4. What types of accounts do you reconcile?
We reconcile trust accounts, security deposit accounts, and operating (management) accounts. Each type plays a unique role in managing funds and must be balanced accurately to meet regulatory requirements.
5. What happens if my books aren’t reconciled properly?
Unreconciled books can lead to misallocated funds, legal issues, and audit failures. In property management, this can damage relationships with property owners and tenants, and may result in penalties from regulatory bodies.
6. Do I need to provide access to my bank account?
To perform accurate reconciliations, we typically request read-only access or bank statements. We follow strict confidentiality and security practices to protect your financial data.
7. Is this service compliant with trust accounting regulations?
Yes, our bank reconciliation and 3-way tie service is fully compliant with trust accounting standards and designed to meet the audit requirements of state and industry bodies.
