Sage Property Management – Things to Consider
Adopting Sage accounting software can be an effective way to manage your finances. With a range of tools to help with payroll, cash flow and invoices, it is the ideal accounting software for managing rental properties. If you decide to go ahead with Sage for property management, you can also team it up with industry-specific software such as Decorus for Sage, to streamline your processes further.
Upgrading to Cloud-based Accounting
Both Sage Business Cloud and Decorus for Sage use cloud technology to enhance daily accounting tasks. The Cloud is an online space where software can be hosted, and files can be stored. This means that data can be sent and retrieved online, instead of using a local device which will keep you tethered to the office. Cloud storage space can be accessed from any location and any device, which is why so many businesses are crossing over to cloud-based software.
Hosting your software digitally can be especially useful for landlords, letting agents and property managers who work remotely. To access a cloud server, all you have to do is log on. Setting up cloud hosting is typically handled by the software’s IT team and takes very little time.
Cloud accounting also allows you to work with real-time data. When actions are being performed or data is being analysed, it is crucial to have the most up-to-date information at hand. Cloud-based accounting software makes this possible, by updating every user’s computer when changes are made. So, if your colleague had entered a new rental payment, the next person to use the account would also see the new payment entry.
Finances You Will Need to Manage
If you are considering moving into property management, you need to be aware of the finances involved.
Payroll
Sage accounting software provides you with a range of payroll features to help you with your staff’s earnings. The system allows you to generate payslips and P60s, file pensions, and remain compliant with HMRC requirements. Estate and letting agencies can easily sort out wages no matter how many people they employ.
Taxes
As you will be receiving income from rental payments, you will need to pay taxes. If you are a private landlord, you will need to complete a self-assessment tax return each year. You will also need to pay Class 2 National Insurance if being a landlord is your main job, you rent out several properties or you are planning on buying more properties to rent.
Rent Payments
Landlords, agents, and property managers rely on rental income to continue running operations. If you do not have an effective rent collection process, you will quickly go out of business. In an ideal world, all rent payments would be paid on time. In reality, you will need to communicate with your tenants on a regular basis to make sure they aware of when they need to pay and to stay attune with any financial struggles they may be experiencing.
Sage accounting software will provide you with financial overviews so you can keep an eye on your cash flow. By accounting for your regular income and expenses, you can work out how financial stable you will be across the month. Similarly, Decorus for Sage will provide you with an overview of your properties, showing you any upcoming payment dates and arrears.
Overhead Costs
As a property manager, you will need to make frequent utility payments. It is worth checking the energy market each year to ensure you are getting the best deal. Secondly, you will need to pay for landlord insurance, building insurance and content insurance to make sure you are protected from any unforeseen incidents. Buying insurance is not compulsory but it is always a wise investment.
On top of this, you will need to prepare for unexpected costs such as repairs and void periods. If you suddenly lose a tenant, the building costs will still need to be covered. Maintaining tenant relationships is important for this reason.
To make sure your vacancies get filled quickly, you may want to consider purchasing prime advertising on property portals such as Rightmove or Zoopla. If you are a letting agent, your landlords may ask you to handle this for them.
Getting Started with Sage Property Management
If you are thinking about moving over to Sage for property management, you can further advice by contacting our team. At Decorus for Sage, we recommend Sage 50 for most small businesses.
For more information on our property add-on, check out our guide The Benefits of Cloud-Based Property Management Software.
