One Language, One Standard: How NARPM's Trust Accounting Standards Are Changing Property Management | Brad Johnson and Wolfgang Croskey

A Podcast | Brad Johnson & Wolfgang Croskey

Pete Neubig: Welcome, everybody, to the NARPM Radio Podcast. I'm your host, Pete Neubig, the voice of NARPM. We have a special show because we don't have one guest, but we have two guests, some of my favorite people, two heavy hitters, Brad Johnson, CEO of ProfitCoach, and Wolfgang Croskey, entrepreneur extraordinaire, owner of Croskey Real Estate, and co-founder of Crane, and co-author of the NARPM Accounting and Trust Accounting Standards.

Brad Johnson: Yeah.

Pete Neubig: Did you hear that?

Wolfgang Croskey: Oh, yeah. Oh, yeah.

Pete Neubig: Man, you guys wear many hats. All right. So thanks, fellas. Thank you so much for being on today.

Wolfgang Croskey: Yeah, absolutely.

Brad Johnson: Yeah.

Wolfgang Croskey: Thank you for having us.

Pete Neubig: All right. So I'm guessing this is part of NARPM 2.0, that we're adding a lot more features for NARPM members. Brad, can you talk a little bit about the NARPM Accounting Standards that's been in play for a few years already? Because I know ProfitCoach was pretty big on that. And then let's talk about how the Trust Accounting Standards came into play and talk a little bit about that.

Brad Johnson: Yeah, sure thing. So before I was at ProfitCoach, so I've been there here, I guess you could say, two and a half years. But back in 2018, kind of at the birth of our company, there was a recognized need that in property management, there's not a standardized way of doing corporate accounting. And not that there's just this overwhelming need for everyone to do things the same way. But when you don't have any sort of standard as far as how accounting is done, you don't have the financial data integrity that you need in order to do things like financial benchmarking. Wolf, let's just go ahead and get this out of the way. Granularity. It wasn't there. It wasn't there.

Wolfgang Croskey: I was going to be so good and not use that term. I promise.

Brad Johnson: Yes. Yes. If you were an upper broker, I know you get the joke here. I said it like six times on stage and then I got 30 minutes. But what you didn't have was a standardized way of doing corporate accounting. So the way that people recognized income, broke out revenue, categorized labor between management labor and direct labor, the way that expenses were booked and coded, it was all done differently. So when one PM would talk to another PM about their different financial metrics, which they weren't even really doing a whole lot of that because financial metrics weren't a big part of the property management industry at the time, there was a lot of confusion because it was like, well, how do you have an RPU of $700.30? It's like, well, it's because they're calculating it in a completely different way than the company who's saying I've got an RPU of something more reasonable, $250 at that time, maybe even more like $200. So enter the NARPM accounting standards. ProfitCoach partners with NARPM. ProfitCoach authors the NARPM accounting standards, creates a full, not just a general ledger system, not just a chart of accounts to doing corporate accounting, but an entire accounting standard of how to categorize and how to do these things and how to use these, how to use this chart of account system. And then from that deriving a financial metrics guide. Now that we have the numbers, if you take this number minus this number divided by this number, you get revenue per unit, you get direct labor efficiency ratio. And we did a study in 2019 and a study in 2022, and then another study in 2025 to get those benchmarks out into the world so that you can put yourself on the NARPM accounting standards or use a partner like ProfitCoach to get on the NARPM accounting standards and then get your data standardized and be able to compare yourself to benchmark and know, here's how I stack up. Here's where I'm average. Here's where I'm above average. Here's where I'm elite. Here's where I'm really struggling. So that was kind of the corporate NARPM accounting standards.

Pete Neubig: Yeah. You basically created the language that we all speak the same language.

Brad Johnson: Exactly.

Pete Neubig: You've been in this game a long time. Do you remember, I don't know if you were around at NARPM back then, but they actually, before the NARPM accounting standards came out, so this is pre-2018, they put a survey out to like, hey, everybody, we want to try to get all this financial data. And everybody brought in their P&Ls. And it was like a rat's nest. Just all the stuff that Brad said that was solved. Were you around there back then?

Wolfgang Croskey: Wasn't fully involved in NARPM at the time, but I do remember hearing about that and seeing that. And it proves the point. You can get your degree in medical billing. There's a language, there's set terms and AI is wiping that out, but that's another podcast. But it just proves the point that as an industry, if we want to be able to talk apples to apples, you have to have a common language, a common understanding, more importantly, a common way to calculate. And so having that really makes it valuable for companies because now, as Brad was saying, benchmarking, doing valuations, if you're thinking of buying another PM company or selling them, a little bit more transparency there. But I think the biggest thing that I saw that came from the NARPM trust accounts is business owners getting more serious about their numbers, because now they can actually understand what the heck is going on. And that, I think, really changed the language that was being used in the hallways at conventions. People are able to talk and speak more informatively about what's going on in their business and being able to share numbers. Because now that your number means the same as my number, I can now say, maybe you should try this and that will increase it or it will help it or whatever. And I think that's one of the main benefits that I saw that came from the chart accounts. Because when it comes time to do taxes, work on my CPA, they could give a crap. That's not where the impact was. It was now when I interface with my peers, I can have a better conversation, deeper conversation. And that to me was one of the biggest benefits to the chart of accounts.

Pete Neubig: Yeah. It built a value, which now people to utilize it. And if you're listening to this podcast and you are a NARPM member, this is part of your NARPM. You can go in there and download the NARPM accounting standards and you can literally just do it yourself. And if you need a little bit of help, do what I did. I hired a ProfitCoach back in 2018 and they did it all for me. So this is a added value to you as part of your just general membership. I'm going to get on my soapbox real quick, fellas, and have one thing that I think NARPM should do. I believe that NARPM should require you if you have a membership, you get a base membership, but it's going to cost you a lot more unless you do a survey and you enter all of your data. I think you have all your freaking data. That's just my soapbox. It'll never happen. Brad, hopefully you can get all the NARPM members to use ProfitCoaching and you guys would have-

Brad Johnson: I'm trying. That's what I do all day long.

Pete Neubig: All right. So that seemed to be the silver bullet, so to speak. Talk to me guys about how the discussion for the NARPM trust accounting standards came. What was the need? How did that happen?

Wolfgang Croskey: So the similar need, right? So property management, we're one of those industries where we actually have two charts of accounts and we're thinking about money in two different ways. Definitely should be. We solve for one part, but then there was this other part. Peter Lohman, business partner with Crane, he's been talking about this for a while and he and I were talking about this and we decided, let's do something. Crane, we have a big body of people that maybe we can work together. We have a ProfitCoach in there and we decided to tackle it. So the first step that I did is I asked everybody to submit their trust chart of accounts and worked, not needing the numbers, but just what are your GL account numbers, your names, what's the hierarchy, let's put it all into AI. And one of the very first findings for me was I could tell you what property management software you use by your chart of accounts because the vast majority of people did not alter their GLs that much from what was the default in their software. They just kind of ran with it. And so I could tell you who was with Appfolio, Propertyware, Rentvine, et cetera. So that was just kind of a fun aha, but that then-

Pete Neubig: Real quick, Wolf, when you were doing this, were most of these people already on the accounting standards?

Brad Johnson: The corporate ones?

Pete Neubig: The corporate ones, yes. The corporate ones.

Wolfgang Croskey: There was nothing for trust. So using that, using AI to kind of compile like, all right, let's smash all this together and let's come up with one. And we realized that the work wasn't going to be too much to get all this stuff into. Well, there goes Pete. You didn't like what I had to say, Pete?

Pete Neubig: Don't know what happened to my internet there. We'll cut it. Sorry about that.

Wolfgang Croskey: So anyways, getting these compiled and then having conversations around, well, what really is important? There were definitely differences, those if you did commercial property management, if you did multifamily, you could start to see the nuances in there. But the need was again, common language, common way of doing things. But now we could actually provide this, not just to a value to us, now it's a value to our clients. Because I have clients that have properties in multiple markets, deal with multiple property managers, and we each give them our statements. They now have to try to put it all together, come tax time, scheduling, CPA, all that stuff. So this was actually going to benefit our clients because now as they work with multiple property managers, one of the benefits of having this NARPM trust chart of accounts is it's going to be easier come tax time for them.

Pete Neubig: So you're saying one of the biggest ahas was that you could tell what software you're using. What was another aha? Did you see, was a lot of people missing any? Because I know the chart of accounts is real long, if you will, for corporate, right? Was this a smaller project, a bigger project?

Brad Johnson: Much smaller.

Wolfgang Croskey: Much smaller. And I think it was easier because there was already experience on how to put together a chart of accounts for an industry. So it was kind of like, you know, how to do that. But the number of accounts is a lot, lot less. The biggest differences came down to companies that wanted to get into capital improvements versus expenditures. And are you really providing tax advice? Or are you just doing reporting like that? We had a lot of conversations around that and difference of opinion. But inside the chart of accounts, there's space to add customization because we didn't want people to be locked into this our way or the highway. So there is obviously standardization, but then being able to have sub accounts to meet those nuances that you may have in your own business.

Brad Johnson: It was important for us to not take a position on anything that could be CPA type work. So, you know, we got some complaints that we left some things to be desired on that part, but that was a very intentional decision. Like, this is a framework for you to use and to customize beyond this that contains the bare minimum of what's needed to have a healthy trust chart of accounts. We expect you to add to it. Corporate accounting is a little different because you actually, again, here we go again, but there was a lot of granularity that you needed in there in order to calculate certain metrics. So it's longer, it's more complicated, but even there, most companies who are using the corporate chart of accounts are adding lots of sub accounts, they're adding all sorts of different things and there's space in there to do the same thing. So that was at the heart of the project.

Wolfgang Croskey: Yeah.

Pete Neubig: Question. Now, ProfitCoach was able to create metrics and create definitions and use those metrics for us property managers to kind of compare with each other. Is the same thing here? Is there some metrics here that are beneficial for us to kind of compare to what's out there?

Brad Johnson: Yeah, that's a good question. The short answer is no at the moment. The long answer is we'd like to do that. The goal was there's a missing piece, fix the missing piece, do it in as efficient but thorough way as possible, get it out to the world, get people on it. Once people are using it, once there's a database that could be collated in order to kind of benchmark some things, then it probably makes sense to go back, calculate some metrics, standardize, do the same sort of thing like 4110 minus 4560 divided by 5400 equals this. What's that? Super granular. And get some of those property metrics, property based metrics in there so that people can go a little deeper, get a better understanding of benchmark performance from a property level, which by the way, we're doing right now at ProfitCoach for operations work as well. We want to be able to benchmark operations as well, working on that. It's a little bit stealth, a little bit under the radar, but more coming on that. Building on the operation standards. So that's the cool thing about property management. I just want to, if I may, take a second and just praise our industry in a way that's pretty unique from a lot of other industries. We have one trade organization. I know that there are others, but one that's very focused on residential, small to mid-size property management companies. And that trade organization has now produced in partnership with companies like Crane and ProfitCoach, the corporate NARPM chart of accounts, the trust NARPM chart of accounts, and NARPM was instrumental in getting the property management operation standards out. And so we're able to leverage the operation standards and the framework that's created there to be able to benchmark operations. So, in a fairly short order, we're going to have industry-wide benchmarks for basically everything you do in a property management company. And that is really, really good for the average operator to be able to not have to guess at what excellent looks like, but be able to see very clearly across the board what the standard is. And then of course, to work hard to figure out how to meet and exceed that standard. So I just think our industry is maturing. It's maturing in a lot of ways, but the fact that it's maturing in that way and that those frameworks exist and that we're all adopting them, that's a pretty big deal.

Wolfgang Croskey: Well, I think what's going to be really cool is the corporate accounts is how companies compare themselves in benchmark. Trust chart of accounts is properties and how they compare. Now you could say, okay, a property management company that performs at, let's just say B-level and a property that performs at B-level, this is what it should look like. And so now you start doing this cross-comparison because now you'll be able to see these other types of programs that property managers do. We'll now have the data to say whether they are beneficial or whether they hurt a property.

Brad Johnson: Not just the company, but the property.

Wolfgang Croskey: Yeah. Because we're fiduciaries, right?

Brad Johnson: That's the fiduciary company.

Wolfgang Croskey: And now we will have data because we're all speaking the same language and be able to say, this is what works, this is what doesn't, this is what we stand by. And being able to then say, look, a property on the West Coast that's 15 years old, this is how it should perform. It's at or below benchmark. So now as a subscriber to these two charts of accounts, as a NARPM member, et cetera, I now can say when I want to take on new properties, I should be able to forecast revenue. I should be able to forecast performance based off of geography, age, et cetera, because as more people adopt this, we will have that data. And to me, that's what a trade organization should be all about is how do we collectively use our data to then do something better than if we've just acted individually? And we'll now be able to do that. And that's why getting as many people onto these two charts of accounts is so important. To help with that, we have conversion guides. So if you want to tackle it yourself, great. You want to hire a company like ProfitCoach? Better. But those conversion guides are there. And more importantly, some of the major software providers in our industry have adopted the chart of accounts as their default. So you sign up with one of the… Are we allowed to use their names? Okay. So you sign up with Rentvine, new subscriber, day one, your trust chart of accounts is the NARPM Trust Chart of Accounts, day one.

Pete Neubig: Nice.

Brad Johnson: Yep. Rent Manager.

Wolfgang Croskey: Rent Manager.

Brad Johnson: Buildium is one of the options.

Pete Neubig: And working on- Just kidding.

Brad Johnson: We're working on it. We're working on it. They're very favorable to it. Yeah. We're working on it. It's a little bit more of a list when you're that big.

Wolfgang Croskey: So when you have industry partners, trade organizations, then members that are all working to accomplish the same thing, it's going to be magical.

Pete Neubig: Yes. Magical.

Wolfgang Croskey: Because- And granular at the same time.

Brad Johnson: Extremely granular.

Pete Neubig: Well, you had said something earlier, Wolf, that all your crane members have adopted the accounting standards, right? And so-

Wolfgang Croskey: They haven't adopted. We basically use those that want to participate, use their information to help build this. So we had a data set.

Brad Johnson: Crowdsourced the beta, essentially. Crowdsourced the original.

Pete Neubig: And Brad, you guys do a yearly... I think you guys do a yearly state of the union. Is that nationals or is it Broker Owners?

Brad Johnson: It just depends on which stocks get accepted and which stocks don't. But I did one in Broker Owner 2026 for... This is what I'd love to do if I'm allowed to put myself on a soapbox here. I'd love to do a finance one at one major conference and an operations one at the other major conference. So I did finance at Broker Owner. I just submitted a talk committee, if you're listening, to the NARPM national committee for the state of the union in terms of operational benchmarks, because we will have those operational metrics and benchmarks by October. So yes.

Pete Neubig: So the challenge I see is like right now, if you're not a client of ProfitCoach, you're not in that benchmark, right? The data is not from NARPM. It's from ProfitCoach and you guys, right? And so we have a very small subset of all the memberships out there. It would be nice now that the rent fund, the portfolios, the buildings, the rent managers are joining in. It would be great if that information could get into NARPM and then have a partnership between NARPM and ProfitCoach where ProfitCoach can take that data, NARPM can pay ProfitCoach, and then ProfitCoach can create that reporting. That's where I was getting at. Agree.

Wolfgang Croskey: So do you know anybody, Pete, that can help make that happen?

Pete Neubig: I think NARPM has lots of other... I'll use the word challenges.

Wolfgang Croskey: They only do so much in a year. I get it.

Pete Neubig: That's right. There's only so much going on right now.

Brad Johnson: But let me address a couple of things on that because I like where your head is going. The first one is, so to answer your question, our financial data set is made up of our clients. We have clients all over the place as far as including our corporate accounting clients, our trust accounting clients. It's not just our coaching clients. So sometimes I get the accusation, well, you're only looking at the best of the best. That's not true. I mean, we have lots of people coming into our coaching program, coming into our accounting services who they hired us for a reason. They're actually a mess. Their numbers are terrible. So I actually think that our data set is a little bit more representative maybe than some people give us credit for. So that's true. And then on the operational side, the operational benchmarks, that data is coming from Crane members and from ProfitCoach clients. And Crane members are a pretty good representation of the industry. We do a Crane financial scoreboard for the Crane community, inside the Crane community. They are slightly above average in most categories. So Crane is pretty representative in a lot of ways. But we're going to be opening in the fall the ability for everybody to submit their operational data into this database. This is a fully anonymized, aggregated database. It's not like we're taking that data and doing anything with it. We're just throwing it into a pot and combining it and benchmarking it. So that will be pretty representative, especially as we get going. But your overall point is a good one. And I would agree whether it's us, and I think I could make a strong case that it should be us. But whether it's us or someone else, I do think that NARPM should have a data partner. I do think that they should prioritize, as a benefit to the membership, they should prioritize data aggregation, benchmarking, industry research, and reporting back to the membership as a main benefit of being a part of the organization. If you're in, you submit your data and you get these insights. If you're not in, you don't. And so therefore, there's an incentive to become a NARPM member, and they can make the membership case strong.

Pete Neubig: I think you also tie the level of membership. Like you want to give your data? Great. It's 5,000 a year. You want to give your data? It's 600 bucks a year. I mean, I'm going to...

Wolfgang Croskey: Yeah. I mean, it's having this data. So one of the other hats I wear is I run a chamber of commerce and I'm often asked, what do I get for my membership? What's the value? And the whole premise is, our people are better than the non-member people. That's the premise, right? Whether it's more professional, whatever. So as a trade organization, residential property managers, we pride ourselves that NARPM members have our code of ethics, our standards, blah, blah, blah, blah, blah, blah. Okay. Show me the data that proves that.

Pete Neubig: Crickets.

Wolfgang Croskey: Right? So having data, now it's an easy sell. Like, oh yeah, you join NARPM, more than likely you'll see a 10% increase in X because we have the data that shows you become more profitable. You will this, your day's on market, like boom, boom, boom, boom, boom. Why would you not join NARPM then?

Brad Johnson: Yeah. You could even, you know what you could do if you had that database? You could say members who attend Broker Owner consistently are 7% more profitable than members who do not attend Broker Owner. You could actually start to make the financial case for the different things that NARPM advertises as valuable because the three of us are always at that event. We know how valuable it is, but unless you've been, and frankly, unless you know some people and kind of know what sessions to attend, who to talk to, it can be hard to derive value. But I think NARPM can make that a little bit smoother.

Pete Neubig: Yeah. That's a whole other thing. People go and they don't implement. That's another thing.

Wolfgang Croskey: Yeah.

Pete Neubig: I think you guys have done an amazing job just to get the rent vines and the portfolios. I mean, to have that as an option in their accounting standards, hopefully one day they have a button, it pushes, it goes to NARPM's big AI data center and Brad and Wolfgang are behind there doing their mad scientist work.

Wolfgang Croskey: That requires all of them to have an open API.

Pete Neubig: Oh, well.

Brad Johnson: That is correct.

Pete Neubig: It was fun while it lasted.

Brad Johnson: That's correct. I would like to shout out those partners because it was not hard to convince them. RentVine, RentManager, Buildium, all of them said, this sounds like a great idea. We would love to have a more robust default COA. We would love to be part of an industry-wide movement to get better at trust accounting. Bam, bam, bam. So again, I'm not throwing Appfolio under the bus. It takes longer to get stuff done when you're that big, when you're public, all of that stuff. They have these long development roadmaps and I do hope and think that they will adopt this at least as one of the default COAs that they have. But it wasn't like we were knocking on the door at RentVine. It was like, nope, let's meet with half of the executive team there. And it took one meeting and they were like, oh, this is a great idea. Let's do it. So I appreciate that. Our vendors do care about industry level stuff quite a bit. Absolutely.

Pete Neubig: I love that. If somebody is listening to this and they are a NARPM member, how do they actually access this? It's like, hey, I want to check this out. I want to learn more. How do they access this information?

Brad Johnson: Yeah, two different ways. So go log into your NARPM account and you can see, I think it's called resources. There's a tab in there. It's got the corporate chart of accounts. It's got the trust chart of accounts with the implementation guides. So that's a way. And then if you're still wanting to learn more, just get some context. Wolf and Wolf's AI agents built a beautiful website, pmtrustcoa.com, a great landing page that gives you all the background information on it.

Pete Neubig: And if they're like, I hate accounting. I don't know nothing about it. And I just need my hand held. Who do they reach out to?

Brad Johnson: Yeah. So on the corporate side, definitely reach out to us. We offer a service to help with that explicitly. On the trust side, we try to make it as easy as possible. Those implementation guides do make it easy. If you get stuck, you can send us an email. We'll give you a little bit of guidance. We explicitly do. We could, but chose not to offer a trust implementation service, a trust COA implementation service, because we really wanted this to be simply a value add to the community and to the industry. So we're happy to help you, but there's not this thing you can sign up for and have us do it. If you're a trust accounting client, a ProfitCoach, obviously we'll just do that in the course of your service. But the implementation guides should get you most, if not all the way there, even if you don't know much about accounting.

Wolfgang Croskey: Yeah. And if you tried to self-implement the corporate chart of accounts, and it was just so overwhelming, and you've kind of have like, I call them an 80% or like, yeah, I got most of it. Give this a shot. I think you'll find this a lot easier to deal with and to train your team, make sure they're using the right GL code. So if the first one was like, oh, forget that, that was a beast. You'll like this. This is a walk in the park and is a good way to go. It's going to help you be a better property manager and to help your clients as well.

Pete Neubig: Do you know when the Buildium and the Rentvine moved over to these standards? Was it earlier this year?

Brad Johnson: Yeah, it was in the spring.

Wolfgang Croskey: Yeah. At Broker Owner.

Pete Neubig: Did anybody have to change? I'm kind of asking you guys outside of the purview, but just curious, if I'm on Rentvine, am I now on the new standards or do I have to convert over?

Wolfgang Croskey: If you're already an existing customer, you have whatever you had in place.

Pete Neubig: Got it.

Brad Johnson: So you don't have to convert over.

Pete Neubig: Got it. Okay. And Wolf, if someone's interested to learn more about Crane, what's the best way to.

Wolfgang Croskey: Yeah. So it's a joincrane.co because we don't like Ms. It's just .co, not a typo, the prompt purpose. And you can learn more about what we're doing. Crane, we've done quite a few things to help support NARPM. We're definitely one of their sponsors for the political pack. We donated a membership. We've donated money. So definitely like supporting NARPM and what they're doing as an organization. And it's just joincrane.co, professional organization for property managers that have 150 doors or more that want to connect with other property managers and do cool stuff. But we're mostly trying to help people find freedom of time. And your next applications are when? October? Next applications will be in the fall. Yes.

Pete Neubig: In the fall. And you guys just did some cool offsite with AI building. So really cool.

Wolfgang Croskey: We did. We're going to have another one coming up in the East Coast. Very cool.

Pete Neubig: And if you're listening to this and you're not a NARPM member, shame on you. Go to NARPM.org or give them a call at 800-782-3452. And if you're like, man, I am overwhelmed with bookkeeping, I need a virtual team member to help me in my bookkeeping. Or any other job roles in your organization, go ahead an email me directly, pete@vpmsolutions.com. Believe it or not, I do not have a VA who answers my emails. I actually answer them. Or go to VPMsolutions.com. Alright. Fellas appreciate you being here. And appreciate all you do for NARPM. Thank you so much.

Brad Johnson: Okay man.

Wolfgang Croskey: Thank you.

Brad Johnson: Yeah. Thanks, Pete.

Pete Neubig: See you, guys.

. Thanks for being here.

John Bradford: Appreciate it always. Thank you.