and now we will learn how a landlord could use a management company and record related transactions
what does a property management company do for you well they collect rent from the tenants they
pay the property related expenses from the rent they collect and they give the remainder to the
property owner and then they deduct a small fee from that payout for their own little services
that they provide for you what information does a property management company give you
as they provide this service well they give you a statement for every time they pay the
property owner the statement lists each tenants rent collected on that statement and then the
statement lists all the expenses that were paid by the management company from that collected rent it
also indicates the fee that they subtracted from the collected rent before they gave you the payout
the net amount on the statement should match the amount paid whether they wrote you a check or did
a direct deposit into your bank account what do you need to record in QuickBooks well when you
read from the statement you should record each tenants rent payment into the receive payments
window one by one this gives you the ability to keep track of who owes you money regardless of
whether the management company is keeping track of it or not when doing so which means when you
record each tenants payment one by one you must make sure to choose the undeposited funds account
as the deposit to account this is true even if the management company directly deposited
the money into your bank account it's just a bookkeeping procedure that QuickBooks needs
to do but you will see it will make the entire statement that you enter very easy use the make
deposits window to record all expenses including the management fees deducted from the payment
from the management company so before our example let's add the property management fees expense to
the chart of accounts so we come here and we click list chart of accounts in the bottom left we click
account new this is an expense and we'll put it in capital letters property management property then
and this course spelling doesn't count property okay well how are we gonna do now save and close
and now we have an expense that we can track how much we pay the management company for the
service or more specifically how much they took out of our rent for the service we also have to
add the name of the company to the vendor list in this case it's Vonda vixens property management
Corp they're the company we pay the expense to so we go to the vendor vendor center new vendor
and we type in Vonda vixens property management but again in this course spelling doesn't count
now we're really ready to dive into it here's the example September 1 we employed Vonda vixen
management to collect all September rent and pay all expenses from the collected rent September
30 Vonda has finished collecting September rent and has already paid some expenses related to the
property so September 30 she deposits directly into Holden's bank account the net amount of
the rent minus expenses and the management fees she gave you the following deposit statement to
enter and here it is and we're going to enter this directly now remember first record each
tenants payment one by one and then make sure you choose the undeposited funds account when
doing so then use the make deposits window to put in the rest so let's read from this we go
we can close these windows we can open the payment window and we know that this is September of 2019
2020 so we can put you know whatever you have to do to get the right day oh excuse me September
September 30th because that's the day we collected the rent okay now remember we're not doing cashing
bank as part of this bookkeeping procedure that's special for management company we have
to use undeposited funds then we choose a land RB and we know we got 2,000 from him make sure
that he goes into the proper receivables account because he always pays in advance save and new
who will click OK who else did we collect for Betty Boop 1000 no problem Betty Boop you know
you can leave the date the undeposited funds and then you just put it here again remember me make
sure you put it in the right receivables account but will we're not focusing on that anymore but
anyway it's a thousand so whatever invoices it gets applied to don't worry we'll just click
Save and close and click OK ok oops we closed it that means we got a reset oh it remembers
the date who was the third one the third tenant was candy Charles in this example candy Charles
and we know she's a thousand dollars a month and we know that she pays in advance so she's uh nerd
rental income and we make sure it's undeposited funds and then that's all you have to do save
and close and click ok now we've recorded the three payments that we collected from tenants
or the management company now we're going to not only record these three expenses but we're
also going to acknowledge that this money has been placed into the bank account net of these
expenses from the main menu click banking make deposit notice two windows open up the first
window is just for you to confirm that all of the deposits that were shown on the statement
were entered properly so you double check that by clicking the check mark in the left margin
this tel tells QuickBooks that they all have been deposited on the same date click OK and now we're
at the most important window the make deposit window now we will read the expenses one by
one we can see the first one is Rex repair fix the gate so directly under the last payment we
click the next row we choose Rex repair and then we choose repair expense and of course
when we click to put the money amount we have to put a minus then we push tab and notice the total
expense or the total deposit rather decreases by the amount of the negative number the next
one that the report says or the statement says is that we cleaned a spill for Betty Boop now
if the tenant is named rather than the vendor we have to put the tenant just click OK for the
warning and don't worry we put the tenant so that it will match it on the profit and loss
by tenant or profit and loss by apartment report we know that that's cleaning expense and we know
to put in a negative number and we push tab on our keyboard to save the amount in the field
the last thing we have to put is the expense deducted management fee by Vonda so no problem
we choose Vonda from the bottom of the vendor list and we put in the new expense that we made
property management fees and of course that will be a negative number and we push tab notice after
we enter all the expenses as a negative number the net deposit equals the amount in the statement now
all we have to do is make sure the deposit window has the right date so it matches it to the bank
account because when we get a bank statement it's going to say that this was deposited on
September 30 of 2020 now that every item in the deposit window looks exactly like every item in
the statement from the property management company then you would click Save and close