Trust accounts that reconcile to the penny, every month

The challenge

The company managed 220 doors across three trust accounts. Trust balances never reconciled cleanly, tenant ledgers didn't tie to deposits, and 1099s for contractors were tracked manually in a spreadsheet that was always behind. The owner worried about a state board audit — and in property management, a commingling or trust-account finding isn't just a fine, it's a license risk. The prior bookkeeper was a generalist who didn't understand that security deposits and owner funds are trust money, not operating funds, and the lack of separation was quietly compounding.

The solution

We placed a dedicated offshore bookkeeper with real estate and AppFolio experience at $8.50/hour. In week one the bookkeeper reconciled all three trust accounts and found two tenant security deposits that had been posted to the operating account instead of the trust account — a commingling error corrected before any audit window opened. Every tenant ledger was then tied to its deposit, class and location tracking was set up for property-level P&L, and a W-9-on-collection workflow was built so 1099s were tracked all year instead of assembled in a January scramble. The bookkeeper then owned monthly trust reconciliation going forward.

The result

All three trust accounts now reconcile to the penny every month. Tenant ledgers tie to deposits. Property-level P&L is available per door. The 1099 file for 47 contractors was ready and correct at year-end — no scramble, no missed forms. The owner's audit anxiety is gone, and the bookkeeper's monthly cost is a fraction of what a local real-estate-experienced bookkeeper would have cost — with the specialist knowledge the prior generalist lacked.

Timeline

1. Week 1All three trust accounts reconciled; two commingled security-deposit entries corrected.
2. Weeks 2–3Every tenant ledger tied to its deposit; AppFolio cleaned up.
3. Week 4Class and location tracking set up for per-property P&L.
4. OngoingMonthly trust reconciliation owned by the bookkeeper; W-9 collected at vendor onboarding.
5. Year-end1099 file for 47 contractors ready and correct — no January scramble.

What nearly went wrong

What nearly went wrong: two tenant security deposits had been posted to the operating account, not the trust account — a commingling error that could have triggered a state board issue. We caught it in week one and corrected the entries before any audit window opened. The generalist bookkeeper hadn't flagged it because they didn't know to look.