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Expenses and Transfers - Balance Sheet Method
Expenses and Transfers - Balance Sheet Method

NOTE - this is not our current "Best Practice" - please refer to the Location Method Expense Article if you are not using this method.

Updated over 9 months ago

STOP AND READ BEFORE GOING ANY FURTHER!!

(This information is no longer used for clients May 2023 forward - applicable for onboardings that occurred between September 2022 and April 2023)

Trust Account Capture Guide:

If the charge is...
โ€‹

Paid from Trust Account

Category

Class

1

Billable to an owner, and should reduce his or her rental income/payout

Trust Liabilities:Owner Payables:I. Net Owner Income:C. Owner Expenses:Paid from TRUST

[Select listing name]

2

NOT billable to an owner, and
NOT listing-specific
(like the PM's overhead/G&A expenses)

Trust Liabilities:PM Payable:I. Net PM Income:B. PM Expenses (Paid from TRUST)

[Select PM/General name]

3

NOT billable to an owner, and
IS listing-specific
(like property-related expenses the PM will cover)

Trust Liabilities:PM Payable:I. Net PM Income:B. PM Expenses (Paid from TRUST)

[Select listing name]

Operating or Credit Card Capture Guide:

If the charge is...
โ€‹

Paid from Operating Account or by Credit Card

Category

Class

1

Billable to an owner, and should reduce his or her rental income/payout

Trust Liabilities:Owner Payables:I. Net Owner Income:C. Owner Expenses:Paid from OPERATING or CC

[Select listing name]

2

NOT billable to an owner, and
NOT listing-specific
(like the PM's overhead/G&A expenses)

[Select the natural P&L expense category]

[Select PM/General name]

3

NOT billable to an owner, and
IS listing-specific
(like property-related expenses the PM will cover)

[Select the natural P&L expense category]

[Select listing name]

Transfers between Operating and Trust accounts - DO NOT USE TRANSFERS in QBO unless you are transferring funds earned before your go-live date.

Example 1 - Your go live date is August 1st, 2024. You earned $10,000 of management company revenue in July 2024. When you transfer those funds in August (presumably), you should use QBO transfers to move the money from one account to the other.

Example 2 - Your go live date is August 1st, 2024. You earned $10,000 of management company revenue in August 2024. When you transfer those funds in September (presumably), you should use the schedule below to move the money from one account to the other. If you make a transfer before September (in August), you would still use the rules below, unless the transfer was for earnings from a previous month.

Bank rules for transfers (N/A if no separate trust account used)

Rule name

Money in/out

Account

Category

1

Trust, to Operating

Money Out

Trust

Net PM Balances Payable from Trust:III. Transfers from Trust to Operating

2

Trust, from Operating

Money In

Trust

Net PM Balances Payable from Trust:III. Transfers from Trust to Operating

3

Operating, to Trust

Money Out

Operting

Net PM Balances Receivable from Trust:IV. Transfers from Operating to Trust

4

Operating, from Trust

Money In

Operating

Net PM Balances Receivable from Trust:IV. Transfers from Operating to Trust

5

Trust, to Credit Card

Money Out

Trust

Net PM Balances Payable from Trust:V. Transfers from Trust to Credit Card

6

Credit Card, from Trust

Money In

Credit Card

Net PM Balances Receivable from Trust:III. Transfers to Credit Card

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