AppFolio bank reconciliation starts on the Bank Accounts page, where Bank Feed imports the bank's transactions and clears the ones it can match. You review the rest, then tie the statement balance, adjusted for uncleared items, to the book balance. Trust accounts need one more step: the owner and tenant ledgers must add up to the same figure.
AppFolio bank reconciliation for operating versus trust accounts
An operating account holds the management company's own money, and its reconciliation proves the books agree with the bank. A trust account holds other people's money: owners' rents, tenants' deposits. Its reconciliation must also prove that every dollar in the bank belongs to someone named in the ledgers, and that no one's balance is negative.
Property managers usually run both kinds of account in AppFolio, often several trust accounts at once. The bank-to-book step is the same for each. The difference is what comes after.
State rules set the bar for trust accounts, and they vary. California is a useful example. The California Department of Real Estate's chapter on trust funds in the Reference Book describes two reconciliations at the end of each month. The first compares the bank account record with the bank statement. The second compares the bank account record with the separate record for each beneficiary or transaction. The DRE notes that the second one is required by Commissioner's Regulation 2831.2, and that a record of each reconciliation must be kept.
The DRE adds a point that matters for software users. It says the bank account record must agree with the total of all beneficiary record balances, and that any difference must be found and corrected. A matched bank feed alone does not show that. Check the rules in your own state before you set your monthly routine.
The operating account still deserves care. Management fees move from trust to operating each month, and a fee taken twice or too early shows up on both sides. Reconcile operating and trust in the same sitting, so a transfer that left one account can be found arriving in the other.
Clearing AppFolio transactions with Bank Feed
Bank Feed is AppFolio's tool for bringing the bank's transactions in and clearing them. It imports lines through a bank connection or an uploaded file, matches each one to a record already in AppFolio, and marks it cleared. What it cannot match, you review: accept a suggested record, create a missing one, or leave it open.
AppFolio's article on automated bank reconciliations with Bank Feed describes the flow. Transactions are imported by syncing with the bank or uploading a file. Bank Feed then automatically matches and clears them against AppFolio records. For the unmatched lines, it suggests AppFolio records that are likely matches. If no record exists yet, for example an automatic payment nobody entered, you can create one from Bank Feed and match it. The article says the feature sits in the task bar on the Bank Accounts page.
Two cautions apply to any automatic clearing:
- A match is a claim, not a proof. Bank Feed pairs a bank line with a record. Open a sample each month, especially amounts that repeat, such as identical rents across units, where a match to the wrong tenant is easy.
- Creating a record from the bank line puts the bank's version in the books. That is right for a utility autopay you forgot to enter. It is wrong for an unexpected debit nobody can explain. Investigate those before you create anything.
The bank statement remains the anchor. Feed data and statement data should agree, but only the statement gives you a fixed ending balance on a fixed date.
Which AppFolio items stay uncleared at month-end?
Uncleared items are transactions in AppFolio that the bank has not processed by the statement date. Owner distributions and vendor checks written in the last days of the month, and deposits made after the bank's cut-off, are normal. Items that stay uncleared for months, or deposits that never arrive, are warnings.
Sort the list each month:
| Item type | Normal pattern | Warning sign |
|---|---|---|
| Vendor check | Written in the last week, clears next month | Still open after 90 days |
| Owner distribution | Sent by ACH at month-end, clears in days | An ACH that never cleared |
| Tenant receipt | Entered on the 30th, deposited on the 1st | A receipt that never reaches the bank |
| Security deposit refund | Mailed to a former tenant, clears within weeks | Uncashed for months, or returned |
A tenant receipt recorded in AppFolio that never arrives at the bank needs attention the same week. It can be a deposit that was lost, a receipt entered twice, or cash that never reached the bank.
Vendor payments carry a fraud risk that reconciliation can catch. If an ACH to a long-standing vendor suddenly goes to a different account, or a vendor asks to change its bank details by email, confirm by phone before paying. The guide to verifying a vendor bank account change sets out the checks.
The AppFolio three-way check for a trust account
A three-way reconciliation ties three figures on the same date: the adjusted bank balance, the book balance of the trust account, and the total of the owner and tenant ledgers. If all three agree, the bank holds what the books say, and the books assign it to the right people. If any one differs, something is wrong.
AppFolio published a worksheet, The Three Way Reconciliation Process, that lays it out in three checkpoints: a bank reconciliation report, a bank account activity report and a bank balance detail. It states that all three checkpoints must be reconciled on the same date and show identical totals. Its report names may not match the screens in your version, so map each checkpoint to the report you have.
A worked three-way reconciliation
The figures below are an example for one trust account at September 30. They are made up to show the method.
Checkpoint 1: bank side
| Line | Amount |
|---|---|
| Statement balance, Sept 30 | 186,420.00 |
| Plus deposits in transit | 3,150.00 |
| Less outstanding checks and ACH | 9,870.00 |
| Adjusted bank balance | 179,700.00 |
Checkpoint 2: book side
| Line | Amount |
|---|---|
| Ending book balance per AppFolio, Sept 30 | 179,700.00 |
Checkpoint 3: ledger side
| Line | Amount |
|---|---|
| Owner ledger balances, total | 131,200.00 |
| Tenant security deposits held | 46,000.00 |
| Prepaid rents and other tenant credits | 2,500.00 |
| Total owed to beneficiaries | 179,700.00 |
All three equal 179,700.00, so the account reconciles. Now suppose the ledger total came to 179,350.00. The bank and the books would still agree, but 350.00 of trust money would belong to no one on the ledgers. That is an overage. The DRE chapter says an unexplained overage is still trust money: it stays in the trust account, needs its own subsidiary record, and cannot be used to cover a shortage elsewhere. A ledger total above the book balance is worse: it means the account holds less than the company owes its clients.
Look also for negative ledger balances. One owner with a negative balance means that owner's bills were paid with another owner's money, even when the totals agree.
Which AppFolio reconciliation reports should you keep each month?
Keep a dated copy of each month's reconciliation for each bank account, the bank statement, the list of uncleared items, and, for trust accounts, the ledger totals that make up the third checkpoint. Save them as PDFs at the time you finish. A report regenerated months later may not show what you saw.
A monthly file for one trust account might hold:
- The bank statement PDF for the month.
- The bank reconciliation report, showing statement balance, uncleared items and adjusted balance.
- The book balance for the trust account at the statement date.
- The owner and tenant ledger totals at the same date.
- A one-page three-way summary with all three figures, the preparer's name and date, and the reviewer's sign-off.
- Notes on any item over 90 days old and what was done about it.
The California DRE chapter says each reconciliation record should identify the bank account name and number, the date, the beneficiaries or transactions, and the broker's trust fund liability to each. That list makes a sensible standard even where the law is lighter.
Some management companies run their corporate books in a general ledger outside AppFolio. If yours does, the operating account may be reconciled in both systems. The guides to Sage 100 bank reconciliation and Sage 300 bank reconciliation cover two common choices for that side.
Why AppFolio balances drift after a month is reconciled
A reconciled month drifts when someone changes a transaction dated inside it. A backdated receipt, a voided check from last quarter, or an edited amount on a cleared item all move the book balance for a period you already closed. The next reconciliation then opens with a difference nobody can see in the current month.
Find drift by comparing. Take the book balance from your saved PDF for the last good month and compare it with the book balance AppFolio shows today for the same date. If they differ, the gap is the sum of later changes dated in that period. Run the transaction detail for the period and look for entries created after your reconciliation date.
Typical causes:
- A void dated in the original month. Voiding an old check is sometimes right, but date it in the current month so closed periods stay put.
- A late-entered receipt backdated to its deposit date. Enter it, but note it on the current month's reconciliation.
- An edit to a cleared amount. If the bank cleared 1,250.00, the record must say 1,250.00. Changing it breaks the match.
Other systems handle reopening differently, and the trade-offs are similar. The guide to unreconciling in QuickBooks Online explains why the narrowest fix is safest, which holds here too.
When not to void an old AppFolio outstanding check
Do not void an old outstanding trust check just to shorten the uncleared list. The money still belongs to the payee: an owner, a vendor or a former tenant. Voiding it moves the balance back into the ledger, but the obligation remains, and in many states unclaimed funds must eventually be reported rather than kept.
Work the list instead. Contact the payee and confirm the address. Reissue the check if it was lost. If the payee cannot be found, follow your state's unclaimed property process and keep the record of your attempts.
The exception is a check issued in error, such as a duplicate payment to a vendor. Void that one, date the void in the current month, and record why.
For firms that review trust accounts for property managers, PreciseBankFlow checks that each bank statement foots, flags duplicate payments and gaps in check numbers, and exports the exceptions for the file. It is opening to firms in small groups, and you can ask for a spot.