Chicago Property Management Accounting, Bookkeeping & Tax Services
Trust account reconciliations, owner statements, 1099s and clean company books for property managers in Chicago. We keep owner money and your money separate, documented and ready for an IDFPR audit or a tax return.
Built for a management company
- Escrow and trust accounts reconciled within the state deadline
- Owner funds tracked by property, never mixed with operating cash
- Management fee, leasing fee and markup revenue recognized correctly
- 1099-MISC to owners and 1099-NEC to vendors filed on time
- Payroll for maintenance and leasing staff
- Company tax return prepared from books that tie to your software
Certified on the platforms our clients use
Two sets of books, and the law cares about one of them
A property management company runs two businesses at once. The first is its own: management fees, leasing commissions, maintenance markups, payroll and the costs of running an office. The second belongs to its owners: rent collected, deposits held, bills paid on their behalf and the balance that is theirs at the end of every month.
Illinois treats that second set of money as escrow. Under the Real Estate License Act, rent and security deposits a manager holds must sit in a separate account at a federally insured bank, be reconciled every month and be supported by a journal and a ledger for each property. The records are kept for five years and the Department of Financial and Professional Regulation can ask to see them. Most bookkeeping problems we see in management companies come from these two sets of books blurring into one.
Heard & Associates LLC keeps them apart. We reconcile your trust accounts, produce owner statements that match the bank, keep your company books and payroll clean and prepare the company tax return from numbers that already tie out. Owners who hold property themselves can read our page for landlords and rental property owners.
Accounting services for property management companies
Whether you manage a dozen units for a few owners or several hundred across the city, the same controls apply.
Trust and Escrow Reconciliation
Each escrow account reconciled to the bank, the journal and the sum of every property ledger within ten days of the statement, with the worksheet Illinois expects you to keep.
Reconciliation services →Owner Statements and Reporting
Monthly statements per owner showing rent collected, fees deducted, bills paid and the balance remitted, matched to the trust ledger so an owner never sees a number you cannot prove.
Accounting services →Company Bookkeeping
Your operating books kept separately: management fee income, leasing commissions, maintenance markups, software, insurance and office costs, closed every month.
Bookkeeping services →1099 Filing
1099-MISC to each owner for rent collected on their behalf and 1099-NEC to contractors and vendors, with W-9s collected before the first payment goes out.
Monthly bookkeeping →Payroll for Your Team
Maintenance technicians, leasing agents and office staff paid on time, with Illinois withholding and unemployment filings handled and labor allocated to the right properties where needed.
Payroll services →Company Tax Return and Planning
Your S corporation, partnership or LLC return prepared from the operating books, with reasonable salary, estimated taxes and entity structure reviewed each year.
Business tax preparation →What Illinois requires of a property manager’s books
The Real Estate License Act and IDFPR rules treat rent and security deposits held for others as escrow money. It must be deposited by the next business day, kept in a separate federally insured account and never mixed with operating funds, with one narrow exception for the minimum balance a bank requires. Each account needs a chronological journal, a ledger per property and a monthly reconciliation worksheet comparing the bank, the journal and the open ledgers.
Those records are kept for five years, with the most recent two years on site, and the Division can examine them. Chicago adds the Residential Landlord and Tenant Ordinance on top: deposits held in a separate account, interest paid to tenants annually at the city rate and strict timelines for returning them. We build your bookkeeping around these rules so compliance is a byproduct of the monthly close, not a separate project.
What we review when we take on a management company
The first month is a cleanup month. We check whether owner money and company money have stayed apart, whether every ledger balances and whether the 1099s went out. Here is what we ask for:
- Owner names, properties and management agreements, including the fee terms
- Trust and operating bank statements for every account
- AppFolio, Buildium, Rent Manager or other software reports by property
- Security deposit ledger and the account that holds the deposits
- Vendor list with W-9s on file
- Payroll reports and contractor payments
- Prior-year company return and any 1099s filed
- Any IDFPR correspondence or audit requests
Your software already has the data. We make it balance.
AppFolio, Buildium and Rent Manager handle rent collection and owner draws well. What they do not do is tie the trust bank balance to the sum of every owner ledger, or keep your operating books in order.
We reconcile what the software reports to what the bank shows, then run your company books in QuickBooks so the two never drift. If the ledgers have already drifted, our bookkeeping cleanup service finds the gap before an owner or an auditor does.
Request a trust account review →Three bookkeeping problems we fix for property managers
Fees paid from the wrong account
Management fees are earned from owner rent, but they belong to the company. When fees are swept inconsistently, the trust account either holds company money, which is commingling, or the company short-pays itself and the owner ledgers overstate what is owed. We set a fixed sweep routine and reconcile it monthly.
Deposits treated as income
A security deposit is a liability until the tenant moves out. Recording it as rent inflates owner income, overstates 1099-MISC amounts and leaves nothing on the books when the deposit must be returned. We track deposits in their own ledger with the interest Chicago requires.
1099s that do not match the ledgers
Owners should receive a 1099-MISC for gross rent collected, not for the net check they received. Vendors need a 1099-NEC when payments cross the threshold, and the W-9 should be on file before the first check. Getting either wrong brings IRS notices to you and to your owners.
What to look for in a property management accountant
General bookkeeping is not enough for a company that holds other people’s money. These are the qualities that matter.
Trust accounting experience
Software fluency
Audit-ready records
Responsive when an owner asks
Company taxes from the same books
How we onboard a property management company
Discovery
We learn how many owners and units you manage, which software you use and how fees and deposits flow today.
Proposal
A scope covering trust reconciliation, owner reporting, company books, payroll and tax, sized to your portfolio.
Cleanup and setup
Ledgers are reconciled to the bank, deposits separated, W-9s collected and the operating books rebuilt if needed.
Monthly close
Trust accounts reconciled within ten days, owner statements issued, company books closed and 1099s tracked all year.
Rated 5.0 by 100+ clients on Google
Business owners across Chicago describe a team that keeps the books accurate, explains the numbers clearly and answers quickly.
Property management accounting questions
Every portfolio is different. If your question is not here, ask us during a consultation.
Book a consultation →What is trust accounting for property managers?
Trust accounting is the separate set of books for money you hold on behalf of owners and tenants: rent, security deposits and funds set aside for bills. In Illinois it is escrow money under the Real Estate License Act. It lives in its own bank account, is reconciled monthly and is tracked by property so each owner’s balance can be proven at any time.
Does a property manager in Illinois need a separate trust account?
Yes, if you hold rent or security deposits for others. The account must be at a federally insured institution and kept apart from operating and personal funds. A Consent to Examine and Audit form is filed with IDFPR for each institution, and the account must be reconciled within ten days of each bank statement.
Do property managers have to issue 1099s to owners?
Yes. A management company that collects rent on an owner’s behalf reports the gross rent collected on Form 1099-MISC once it crosses the reporting threshold, which is $2,000 starting with tax year 2026. Contractors and vendors paid for services receive a 1099-NEC. We prepare and file both from your ledgers each January.
How are security deposits handled in the books?
As a liability, not as income. Deposits sit in their own ledger within the trust account until they are returned or applied. In Chicago, the Residential Landlord and Tenant Ordinance also requires paying interest to tenants annually at the city rate and returning deposits on a fixed timeline, so the ledger tracks interest as well.
How is a property management company taxed?
Your fee income, leasing commissions and markups are company revenue, taxed through whatever entity you operate, usually an LLC taxed as an S corporation once income supports it. Owner rent passing through your trust account is not your income and does not appear on your return. We prepare the S corporation or partnership return from the operating books.
Can you work with AppFolio, Buildium or Rent Manager?
Yes. We pull owner, property and trust reports from your management software and reconcile them to the bank. Your company’s operating books are kept in QuickBooks, and the two are tied together at every monthly close.
What happens if owner and operating funds have been mixed?
It is more common than people think and it is fixable. We reconstruct the ledgers from bank activity, identify the amounts that belong to each owner and to the company, and document the correction. Our bookkeeping cleanup service handles the rebuild before monthly service begins.
Do you also help the owners whose properties we manage?
Yes. Many management companies refer their owners to us for rental property tax preparation, since we already understand the statements they receive. Owner and company work are kept strictly separate.
How long do I have to keep escrow records?
Five years for journals, ledgers, bank statements, reconciliation worksheets and transaction records, with the most recent two years kept at your office. We organize each monthly close so the records are already in that form.
Keep owner money and company money where they belong
Book a consultation and we will review your trust reconciliations, owner statements and company books, and tell you exactly where they stand.