# v. Financial Operations & Reporting

Financial operations and reporting capture how operating performance is recorded, monitored, and communicated. These processes ensure transparency, support decision-making, and provide reliable inputs for valuation, compliance, and investment analysis.

#### **Accounts Payable**

Amounts owed by a property or operating entity to vendors or service providers.

#### **Accounts Receivable**

Amounts owed to a property by tenants or other counterparties, typically related to rent or reimbursements.

#### **Accrual Accounting**

An accounting method that records revenues and expenses when they are earned or incurred, rather than when cash is exchanged.

#### **Budget Variance**

The difference between budgeted and actual financial performance.

#### **Cash Accounting**

An accounting method that records transactions only when cash is received or paid.

#### **Financial Statement**

A formal report summarizing income, expenses, assets, and liabilities for a property or entity.

#### **Operating Statement**

A report detailing a property’s revenues and operating expenses over a defined period.

#### **Reconciliation**

The process of verifying that financial records align with supporting documentation and transactions.

#### **Reporting Period**

The defined timeframe over which financial results are measured and reported.

#### **Reserve Account**

Funds set aside to cover future expenses such as capital repairs or replacements.