and now we will learn how a landlord could use a management company and record related
transactions
if you have any questions about this topic you can leave them in the comments section below and i'll
do my best to help you and of course if you feel the video helped you i hope you will click like
and don't forget to subscribe to get updates on new videos that come out all the time 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 tenant's 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 tenant's 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 tenant's 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 of course
we remember how to add an account to the chart of accounts click accounting chart of accounts
and here's the existing chart of accounts and we click new we know that this is an expense
and of course the detail type doesn't really matter um i would assume we would
click something like um professional fees or something maybe legal and professional fees
but it doesn't really matter the detail type the name should be management company fees
expense
and that's what will go up whenever we account for what the management deducts
from the collected rent and we'll click save and close
and of course here it is on the list and the expense section management
company fees expense you can always change the spelling there but now let's add vonda vixen
as the property management company well that's easy we just add her to the vendor list
we know how to do that expense vendors
and now we have the vendor list new vendor and we can put a don't allow but we can put vonder
vixen management
company okay and of course in a real situation we put all the other information
we could add some notes and edit the notes etc save good now we're ready for our example
for example let's imagine on may 1 we employed vonda vixen management company
to collect all of may rent and pay all expenses from the rent collected
may 30th wanda has finished collecting the may rent and already paid some expenses related to
the property so may 30th she deposits directly into holden's bank account the net amount of the
rent minus expenses and management fees she gave you the following deposit statement to
enter so this is an example statement yours won't look exactly the same but it clearly shows you
the end of the month that she collected for and these are the tenants she collected on behalf of
this is the amount she collected from each one and of course here are all the expenses she had to pay
for the property just these two the fixing the gate and cleaning the spill and of course she
deducted out her management fee so she's clearly showing the total she took out
of the rent collected and the net amount that was deposited into your bank account
on may 31 and that should match the statement so what do you record into quickbooks well
first you have to read from the statement and record each tenant's rent payment one by one
in the receive payments window now when you do that you must choose the undeposited funds account
to deposit to then we use the make deposits window to record all the expenses
including the management fees that were deducted from the payment of the management company
so first we open the receive payment window the way we learned before and we're going to read each
rent payment from each tenant right off of the management's statement so alan paid us 2 000 betty
paid us 1 000 and candy paid us 1 000 on march 31st i mean may 31st so we go forward to may 31st
we choose alan and of course he has open invoices but don't worry we choose alan and the money
amount that he gave us was two thousand and we have to make sure that this goes into undeposited
funds not cash and bank undeposited funds that's because we're going to net the expenses out of it
when we finally make the deposit so may 31 allen gave us 2 000. let's make sure it's alan very good
now we click save and new and i happen to remember on the same date betty boop
gave us a thousand dollars also deposited into undeposited funds for the may rent
or save and close boom okay and of course we also we i didn't want to do save and close i
wanted to do save and new because we have candy charles and her rent is a thousand a month
okay and of course that also goes into undeposited funds and then we click
save and close now that they're in undeposited funds we can click the plus sign and go across
to customers and we can choose the deposit deposit actually it's under other other is
bank deposit in the column all the way to the right under the plus sign right here bank deposit
now the bank deposit what's showing up is anything that's in undeposited funds
so we will place the check mark next to each of the payments because they were deposited
directly into the bank account on may 31 however we have to subtract out the expenses
and even though this little triangle says add funds to this deposit this is the place
to put the expenses that you subtract from the deposit so we're going to put repair expense 250
so we can choose rex repair if we want to but in our case if the management company is doing it
we know that it is repair repair expense and then we have to put it as a minus because it
is decreasing the amount that was actually deposited expenses do that the next expense
that's listed on the statement is cleaning expense so we have to put here cleaning expense
actually it's calvin cleaners is the vendor and cleaning expense
is the expense and that amount was 150 so we put a minus sign because that 150 is
lowering the amount of the deposit and of course the management fee deducted is 300 well that's the
account that we learned well that's vonda we know that's vonda and we know that that's the account
that we recently put on the list and of course we have to put the 300 as a minus because it
lowers the amount of the deposit so we have 4 000 collected and 700 in expenses so the net amount of
the deposit here should match your statement which is the statement from the uh management company
as well as your bank statement three thousand three hundred and when we click save and close
we can take a look at the trial balance and we can see that all the expenses changed accordingly
and the cash in bank changed accordingly for the amount of the management company deposit