Overview
DoorLoop is a rental property management software solution, so our accounting system works from the perspective of properties. Revenue, expenses, bills, and bank account funds are all related to properties to keep track of a property's finances. In other words, DoorLoop keeps an accurate set of books for each of your properties.
How Does Associating the Opening Balance to Properties Affect the Bank Account Opening Balance?
Setting balances by property is necessary because DoorLoop needs to know which property balance sheets should reflect the bank account opening balance. If you don't set this up correctly, the balance sheets and accounting for your properties won't work properly.
Example
If you're holding security deposits for leases on a property, this money is in a bank account somewhere. When you set up this bank account in DoorLoop, you need to specify that these security deposit funds are meant for this specific property. If you don't, when you go to record a refund for a security deposit to a tenant, DoorLoop will think this property doesn't have the funds to pay back this liability — because you never told DoorLoop that this money was in the bank account specifically for this property.
What if I Don't Want to Track Finances by Individual Properties?
If you genuinely don't want to track finances by property and instead wish to keep track of your entire portfolio, you can split your opening balances evenly among all of your properties.
Or you can Add a Business Property that represents your business, then set the opening balance for this bank account to your business "property."
See Set Up the Opening Balance and Accounting Start Date of a Bank Account to learn more about setting bank account opening balances.
Associating opening balances correctly with your properties ensures your balance sheets and accounting stay accurate from the start.
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.