Chart of Accounts

A Chart of Accounts (COA) is a structured list of all the financial accounts used by an organization to record its financial transactions. It serves as a foundation for the accounting system, providing an organized framework for categorizing and reporting financial data. 

Entering Transactions

When entering transactions into the software, use the category/chart of accounts for that specific type of transaction.

In property management, there are specific common accounts used across the industry that are automatically created in your software.

Here’s how it is typically structured:
Assets – Resources owned by the company (e.g., cash, bank accounts, real estate, equipment). Rentec Direct does separate Bank Accounts from other Assets because banking has many additional features available that traditional asset accounts do not, such as bank sync, reconciliation, and unrecorded funds. To add a new bank account, please visit Add Banking Ledgers.  To add a new [non-bank] asset, visit Setting Up Categories | Chart of Accounts.
Liabilities – Debts or obligations the company owes to others (e.g., loans, accounts payable, security deposits).
Equity – The owner’s interest in the company (e.g., common stock, retained earnings, opening balances).
Income – Income generated from business activities (e.g., rental income, tenant reimbursed expenses).
Expenses – Costs incurred in operating the business (e.g., utilities, repairs, legal, interest, owner distributions).
Each account in the chart is assigned a unique code to facilitate tracking and reporting. For example:
  • 1000-1999: Assets
  • 2000-2999: Liabilities
  • 3000-3999: Equity
  • 4000-4999: Income
  • 5000-8999: Expenses

It is a good idea to keep your account types within these ranges so a bookkeeper or accountant can easily follow and understand your finances.

In Rentec Direct, many accounts are created by default for your use. You can use these default accounts or create additional accounts for your specific business needs.

Assets

  • Real Estate: This is a parent account for all your real estate assets. When you add a new property to Rentec Direct, you can optionally automatically create a linked asset account, which will be added as a sub-account here.

Liability

  • Security Deposits Held - This is the default account where all your security deposit transactions will post. You can optionally add additional security deposit categories to catalog your security deposit transactions.
  • Prepaid Rents - If you receive rent for a future date, it is typical to place it in the Prepaid Rents category. This account is a placeholder for an upcoming feature that Rentec Direct will be releasing early in 2025.

Equity

  • Retained Earnings - Retained Earnings is not an account you can post transactions to, but is instead a real-time calculation that includes the sum of all your income transactions minus all of your expense transactions. This calculation is automatic every time you post any income or expense transactions and is a necessary equity account to keep your balance sheet balanced.
  • Owner Investment - If an owner invests in a company, the investment is typically recorded in the owner investment account.
  • Opening Balance - Any bank, asset, or liability account added to the system with an opening balance posts to this account.

Income & Expenses

All the traditional accounts used in property management are added as default income and expenses. This includes the income categories Rental Income, Tenant-Reimbursed Expense, HOA Dues, and CAM Income. Expenses include Advertising, Utilities, Commissions, Repairs, and more...

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