does your management company withhold expenses from landlords before giving them their monthly
payout well then you need to know how to record expense withholdings from payouts to landlords
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
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what if we had property expenses that the landlord client is responsible for but are not from a
specific tenant well first let's remember that all the procedures so far in this property management
quickbooks course are easy and make sense secondly for this issue most steps are the exact same
as they were in the prior video where we paid the landlord client our good friend alan arby
there is only one additional step if we have expenses that are related to the landlord
and not a specific tenant we will record the non-tenant related expenses as a deposit
to the already paid bank clearing account that we used in the previous video
that's it then all the procedures work perfectly and you will always be able
to tell what's going on financially by looking at your quickbooks reports
here's the example on january 11th we pay 300 to lana the lawyer for legal and professional
services related to managing dave deeney's property and not related to any specific tenant
in the memo field the service she provided was just preparing the documents so now
here's how we would record that but before we record that actually let's think about
what would happen in the trial balance well this is the way the trial balance looks before
we record that transaction and if we pay legal and professional fees that means legal and
professional fees will show up for the first time in our trial balance for three hundred dollars
and if we paid it from the bank account cash and bank will decrease and become seven thousand one
hundred and that will be the result in the trial balance after this check so we know to click check
and we know to put the date january 11th we know the money amount is going to be 300
and the money is coming from chase bank however lon of the lawyer is not yet on
the vendor list so this is how you add a vendor at the moment you make a transaction it's called
adding on the fly click add new make sure it says vendor and click ok and just type the name
in a real situation we would put her address contact email and so on and click ok
and here she is on the list and if we need to manage her information later we can just click
vendor vendor center and double click exactly the way we would the way we learned in the customer
center because the vendor center and the customer center are exactly the same so you already know
how to manage the vendor information now again legal and professional services
expense are not yet on the trial balance but we can add it on the fly click add new
expense click ok now that this is the correct expense account type just type in
legal and professional services click save and close
good now the most important two most important things to remember it's going specifically for
dave deeney and not one of his tenants so this is the way you would put it if it
was for the landlord not the tenant don't forget you must add something in the memo
field to be able to see on the report what the reason for the expense was so we type
and we click save and close and when we look at the trial balance the results are exactly
what we predicted a moment ago a moment ago we predicted this and that's what we got three
hundred legal and professional services and only seven thousand one hundred in the bank account
now we'll do step two we'll make dave responsible for it now what happens at the moment we make dave
responsible ins uh for this particular expense instead of us well if we don't have the expense
because we made dave responsible then we no longer see legal and professional fees expense in our own
trial balance and because we are going to withhold that from a payout to a landlord we must
decrease payable to landlord client for the amount that we're going to withhold so this
will be the result in the trial balance after we take the check we just made and put it on
an invoice for dave very simple invoice the date of the invoice should be the date of the expense
don't worry about the invoice number you can type whatever you want and the customer is specifically
dave not one of his tenants dave and of course quickbooks reminds us we click ok that just for
dave we have this expense waiting to be billed click the check mark just like we did in the prior
video click ok now notice the memo field from the check came over to the description of the invoice
and we have to copy it to the memo field of the invoice so that it shows on the main report
very clearly now when we click save and close oh yeah you gotta remove the email thingy
click save and close now the results and the trial balance are exactly as what we expected we only
owe 5700 to our landlord clients and we no longer have this expense because we billed the client
and lowered their payout but the most interesting moment is this click landlord payout balances
and you will see that this 300 lowered the amount that we're going to pay out to dave you see
we were going to pay out 6 000 but now that he owes us this invoice that he is responsible for
the amount we're going to pay out is 5700 and notice the invoice clearly says it's
preparing documents and it's specifically for dave and not any of the other two tenants
so now we're actually going to pay dave his monthly payout and we're going to do the exact
same steps that we did in the prior video first we checked the payouts report to see how much to pay
and then we physically pay him and if we assume he's paid then we record a payment one by one
for each of dave's tenants and don't forget to use the already paid bank account
okay so that's the normal step two but the step three is the new one what we're specifically doing
in this video is we're going to record a deposit to the already paid bank account for the amount of
expense that's attributed to just only dave and this extra step in this video number three is the
only thing unique that you are learning in this particular video and after you do step three the
balance of the already paid clearing account will be equal to the amount you pay dave and then all
you have to do is record the full payment exactly the way you did in the prior video
now when you're done with all of these steps what will be the net result when you're done with all
of these steps you will owe nobody because you paid all your landlord clients their monthly rent
minus withholdings and of course if you paid out that 5700 cash and bank will decrease by the 5700
and you will be left with the 1400 that you earned as the service fee from both uh tenants uh from
both the landlords so this will be the result in the the net end result after we finish all the
steps that we learned the three steps we learned about in the previous video and the one extra step
we're learning here so first let's imagine we physically paid him the 5700 look if we come to
this report how much do we owe dave 5700 just pay it you know how much he's waiting for so just pay
it so let's imagine we did that now let's record each tenant of dave so we can make their balance
zero and indicate that they are already paid just like in the previous video we click check we put
the date the end of the month that we're paying and for each of the tenant we check their amount
okay so we have to pay 2700 to dave as a result of eddie edwards so we click dave for eddie edwards
2700 make sure that you are using the already paid account if the tenant was physically i mean excuse
me if the landlord was already paid for this tenant then you put the already paid account
you put the rent payable to landlord client because that's where the money is uh coming
out of and the customer job the specific customer or a tenant that this is for is eddie edwards so
this is the way the check looks right here for the you could add a memo and write final payout but
you don't have to or final payout for january but it's clear what it is it's a check on january 31
for the balance so we click save and new and when we take a look at the report we now owe nothing
to dave for eddie for january because that was already paid 3300 is for freddy do the same thing
very simple procedures it's today specifically for freddy froda
and of course we fill out the rest oh oh oh not 3300 yep 3300 and
payable to landlord client make sure it's for dave and freddie froda so this is the
way it looks when we clear the payment for that one particular tenant save and close
now look now we owe nothing to a day for eddie edwards we know nothing today for freddie froda
and now we're going to do this third simple step to account for the expenses that relate
just for the landlord and not the tenant just make a deposit for the three hundred dollars
banking make deposit you might want to add it to the icon bar because you might use it very
often so you know deposit the date is the 31st the 10 the the customer is just only dave
not any particular tenant because that was the three hundred dollars that was specifically dave
okay then we're going to put the rent payable to landlord client because that's what represents
what was owed in the payout and of course the bank account is the clearing account and uh
don't forget to put the money amount in the money amount field now when we click save and close
you can see that we now owe nothing to dave for that particular thing
because it's all in the already paid account and you may notice that the already paid account
now equals the amount that we're supposed to pay for dave 5700 so what do we now do
we now record the balance of the already paid account by paying it from the bank account
so we click so we click check and we make sure the money is coming from the bank account
on january 31 for 5700 and that will be the transaction that matches the bank statement
for the operating account for the actual money that went out to the client
now we must make sure we choose dave and not any other particular tenant that he's associated with
and the account on the bottom line is the already paid clearing account
so that makes the clearing account zero so it finished serving its purpose and this makes our
operating bank account match the bank statement which reflects the actual events that happened
and this is the last step to record the payment to dave save and close and the results in the
trial balance are exactly as what we need there's only fourteen hundred left in the bank account the
clearing account goes down to zero so we can use it at the end of next month to make our
end of monthly entries next month and notice the amount we earned in income is all that's
left in the bank account because we paid out everything that we owed to the landlord clients