The books playbook for AppFolio.

Steps in AppFolio

Run the first pass free in your browser: the bank vs. books check →

1. Pull the bank’s transactions for the period (download from the bank, or use your bank feed) and run AppFolio’s Bank Account Activity report for the same account and dates.
2. Before matching, clear out voids: a check that was voided and reissued under the same check number nets to zero. Take those pairs off both sides first.
3. Match one bank line to one book line where the amount is exact to the cent and the dates are close (within about two weeks). For a check, allow longer, up to about six weeks, when the bank shows the check number.
4. Then match groups: one bank deposit that equals a whole AppFolio deposit batch, one bank debit that pays a full day of eChecks or a whole payables run, or one loan payment that equals a transaction split into principal and interest.
5. Sort what’s left. Money at the bank with nothing in AppFolio needs a payment or deposit recorded. Entries in AppFolio not yet at the bank are outstanding: list them and watch them.
6. Reconcile the statement in AppFolio’s bank reconciliation, then run the Bank Reconciliation report and confirm the difference is zero.

The rules

• Statement tie: statement ending balance + deposits in transit + receipts not yet deposited − outstanding checks = book balance. Anything else is a difference to explain.
• An amount alone never proves a match. Same amount, same direction, close date, and a reference or payee that agrees.
• Group on a real reference (a check number, a document number), never on a label like “ACH” that appears on unrelated lines.
• When more than one combination of lines adds up to the bank amount, don’t pick one. Look at the detail.
• Each statement starts the day after the last one ended, and its opening balance equals the last closing balance. If not, something is missing.
• Never post a plug entry to make it tie. A plug hides the difference instead of explaining it.
• Outstanding items older than 30 days get chased: a deposit that never landed or a check that was never cashed.
• Found an error in a month already reconciled? Unreconcile it, fix the entry, and reconcile again.

Where differences usually come from

• A bank fee, interest credit or returned payment never recorded in AppFolio.
• A deposit recorded as one batch in AppFolio but landing at the bank as several credits, or the reverse.
• An autopay bill paid by the bank and also paid again in a payables run.
• A transfer recorded on one account but not the other.
• A check voided in AppFolio after the bank had already cleared it.

Steps in AppFolio

1. Run AppFolio’s 3-Way Reconciliation report for the deposit (trust) account. It compares the bank, the books and what you owe tenants.
2. If the three don’t agree, look property by property for the gap, then tenant by tenant in the Tenant Ledger.
3. Run Diagnostics and clear anything it flags on the deposit account.
4. If the deposit account earns interest, move it to each property’s operating account, one transfer per property, not one lump sum.
5. At each move-out: post the move-out charges, attach the itemized deposit letter, make any transfer between accounts, then create the refund payable. Check your state’s deadline for returning deposits.

The rules

• Total owed to tenants = deposit liability in the books = deposit bank balance. All three, on the same date.
• A matching total isn’t proof. Two errors can cancel out, so check property by property.
• Deposits sit in their own account in many states. Check your state’s rules.

Where differences usually come from

• A move-out refund or deduction posted in one place but not the other.
• A deposit received into operating instead of the deposit account.
• Interest earned on the deposit account and never moved or recorded.
• A deposit transferred between properties on one side only.

Steps in AppFolio

Scan your last few months free in your browser: the duplicate bill check →

1. Before entering a bill, search Bill Detail for the same vendor: same invoice number, or the same amount with a bill date within about two weeks, means it may already be in.
2. Code the property and expense account from the vendor’s history. If the vendor has mostly gone to one property and one account (about 80% of the time or more), use that. If not, ask.
3. For bills the vendor collects by autopay: enter the bill, then record it as paid (reference the bank’s ACH and date). Never include it in a payables run.
4. Before each payment run, review Unpaid Bills and untick anything on autopay.
5. After the run, compare Bank Account Activity with what AppFolio paid: a bill paid by the bank and again by check or eCheck is a double payment.
6. A person approves every payment. Run payments on a fixed day each week.

The rules

• Duplicate test: same vendor + same invoice number, or same vendor + same amount within 14 days. Invoice numbers one character apart get a second look.
• An amount alone never means a duplicate. Rent-sized and utility amounts repeat honestly.
• A bill can’t be entered without a vendor, a property, an expense account, a bill date, a due date and a total.
• Make sure a bill really came from the vendor before you pay it, especially if the bank details changed.
• Look back about 60 days for double payments.

Steps in AppFolio

1. Every bank account is reconciled for the month, and the Bank Reconciliation report shows zero difference.
2. No unexplained items are left through month-end. Review uncleared deposits and payments, and chase anything older than 30 days.
3. The deposit account proves out on the 3-Way Reconciliation report, and Diagnostics is clear.
4. Every bill for the month is in. Check Unpaid Bills and anything you bill back to owners (work orders and recurring charges).
5. Post management fees, then run Owner Statements. Fees first, statements after.
6. Review the Income Statement and General Ledger for anything coded to the wrong property or account, then send statements.

The rules

• A month is closed only when every account tied, nothing has changed since, and every checklist item is done.
• No forced close. A month that isn’t proven stays open and carries forward.
• Don’t back-date into a closed month. If you must fix one, reopen it on purpose and re-prove it.

Steps in AppFolio

1. Confirm all twelve months are closed and tied.
2. For each company, export the Balance Sheet, Income Statement and General Ledger for the year.
3. Run the 1099 Report and check every vendor you’ll file for has a W-9 on file. Ask for missing W-9s through the year, not in January.
4. Prove the deposit account one last time as of December 31.
5. Put it together for your accountant, one folder per company, with each year-end bank statement next to its reconciliation.

The rules

• One package per company, never a mix of companies.
• Every balance sheet bank number should match a reconciled December statement.