Overview
DoorLoop handles most of the accounting and reporting for your financial statements in the background. Your part is to record the correct tenant charges, incoming payments, outgoing payments, and deposits — DoorLoop takes care of the rest. For a full list of accounting terms used throughout the site, download the Accounting Checklist.
What is the Accounting Cycle?
While there are different versions of the accounting cycle, the basics are the same. For the revenue part of the cycle in DoorLoop, you make charges, receive payments, and deposit those payments in the bank. For outgoing payments, you pay vendors, distribute money to owners, and refund tenants for things like security deposits. Finally, you verify your DoorLoop accounting through bank reconciliation and use DoorLoop's reports for financial reporting. Below are the steps in the Accounting Cycle:
Step 1 – Charges (Accounts Receivable)
A charge is a transaction on a lease in DoorLoop recording that the tenant owes you money. See Post a One-Time Charge on a Lease for the full steps.
Charges are associated with revenue accounts, allowing the associated lease payments to record revenue to the correct account in your chart of accounts for reporting purposes. (For example, paid rent charges show as rent revenue on the profit and loss report. Late fee charges show as late fee revenue, pet rent charges show as pet rent revenue, and so on.)
You can add charges to leases in multiple ways. The recurring rent schedule you set up when you created the lease automatically adds lease rent charges. You can also set up other recurring charges and create one-time charges as needed.
Step 2 - Payments
A payment is a transaction on a lease in DoorLoop recording that a tenant paid you money. See Receive a Payment on a Lease for the full steps.
Usually your tenants pay you in response to charges, but they might also pay early. Lease payments without charges become credits on the tenant's ledger and show as "unapplied lease payments" on your profit and loss report. This credit automatically pays the next charge on the lease.
If your tenants pay online through their tenant portal, DoorLoop records the lease payments automatically. If a tenant pays you directly, you'll need to record the lease payment manually.
Step 3 - Bank Deposits
A bank deposit is a transaction in DoorLoop recording that you deposited one or more payments into your bank account. See Manually Record a Bank Deposit for the full steps.
Just because a tenant paid you doesn't mean you've deposited the money into your bank account. For example, if a tenant gives you a check or cash, they've paid their rent, but this amount won't yet reflect in your bank account balance — so you might not want to record a bank deposit along with the lease payment.
If your tenants pay online through their tenant portal, DoorLoop creates the corresponding bank deposit automatically when the money reaches your bank account. If a tenant pays you directly, you'll need to record the bank deposit manually. You can create a bank deposit at the same time you record the lease payment if you prefer.
Step 4 - Pay Vendors (Bills/Expenses)
Renting properties incurs expenses, such as repairs and management fees. Record these using Expenses and Bills so that property income (revenue minus expenses) shows correctly on DoorLoop reports. See The Difference Between a Bill and an Expense to decide which one applies to you.
Expenses record the cost incurred and the outgoing payment in one step. This is the common method for cash basis accounting.
Bills — also known as invoices or accounts payable — are the way to go if you use accrual basis accounting.
The key difference between Bills and Expenses in DoorLoop is that Bills are created and paid in two separate steps.
Either way, you can create and send checks to pay your vendors if needed.
Step 5 - Pay Owners (Owner Distribution)
An owner distribution records that you paid owners income from their properties. See Record an Owner Distribution for the full steps.
DoorLoop automatically calculates the balance sheet and available funds for your properties to determine how much money you can distribute to owners, so recording all revenue and expenses accurately matters.
Owner distributions in DoorLoop are created as bills and bill payments, or as expenses. They show that money was withdrawn from the business and reduce the available funds on the property balance sheet.
If needed, you can also create and send checks to pay out owner distributions.
Step 6 – Pay Tenants (Refunds)
Tenant refunds cover things like returning security deposits and sending money back to tenants for overpayments. See Refund a Payment to a Tenant on a Lease for the full steps.
If needed, you can create and send checks for tenant refunds.
Step 7 - Bank Reconciliation
Bank reconciliation is how you compare your actual bank account transactions to what you've created in DoorLoop. This helps confirm no mistakes were made or transactions missed in DoorLoop. See Bank Reconciliation Overview to get started.
DoorLoop partners with Plaid (used by Venmo, Stripe, Cash App, and many others) so you can connect your bank accounts in DoorLoop to their real-world transaction data for bank reconciliation.
Step 8 - Use Reports
After recording accurate transactions and verifying them through bank reconciliation, accurate financial reports are the payoff. See the Reporting collection for the full list of available reports.
DoorLoop has a full suite of reports you can share with property owners — for example, profit and loss reports, cash flow statements, and balance sheets.
Other Accounting Considerations
Cash vs. Accrual Accounting
DoorLoop supports both cash and accrual basis accounting, and you can run reports in either. See Introduction to Cash vs. Accrual Accounting for the full breakdown of how each method works.
Accounting Start Date and Opening Balances
Your Accounting Start Date is the day you begin tracking property accounting in DoorLoop — everything before it is summarized using opening balances. See Choose an Accounting Start Date and Set Up the Opening Balance of a Bank Account to get set up.
Property vs. Business Accounting
DoorLoop is built for property management accounting, meaning all transactions and bank funds are associated with a property. Mixing your own business accounting into DoorLoop isn't recommended.
If you're a property manager managing properties for other owners, your management fee is an expense incurred by their properties — you're the vendor. DoorLoop does not record this fee as income for you to track your own business financials; that's best handled elsewhere, such as in QuickBooks.
If you have expenses or bank funds you don't want tied to any specific property, you can create a property in DoorLoop to represent your business and record those there. Recording revenue deposits this way isn't officially supported and should only be done if you're comfortable with advanced accounting and bookkeeping methods.
That's the accounting cycle in a nutshell — as you record charges, payments, and deposits day to day, DoorLoop keeps your reports and financial statements accurate behind the scenes.
Disclaimer
The information provided is not offered by a licensed accountant, should not be considered accounting, financial, or legal advice, and is provided (and intended) for general informational purposes only. Do not rely on the information provided; rather, please verify applicable accounting laws and regulations independently. This information should not be considered a substitute for professional advice and does not offer Generally Accepted Accounting Principles (GAAP). The author and publisher are not liable for any damages or losses resulting from reliance on this information.