This article offers an overview of typical day-to-day activities a landlord or property manager will take on in regards to bookkeeping and financial recordings. You can use this document as a guide and a list of tasks that you would typically do on ManageCasa.
Based on a lease, a tenant will have to make rent payments, and other payments that occur based on defined terms. In the offline world, rent amounts owed were typically not charged, but with ManageCasa you can invoice your tenant for rent and other amounts that are to be paid regularly.
You can create recurring invoices from within lease terms to record most items automatically.
Additionally, manual invoices can be created to tenant on a case-by-case basis like utility costs or repairs that have been caused by tenant.
- Rent amounts are repeating amounts that will be recorded as a recurring transaction record within accounting that the tenant owes you.
- A deposit owed at a move-in will be created as a deposit transaction and will be seen as an outstanding item for the tenant to pay.
Note: For every payment you record in ManageCasa, there is typically an associated charge that shows on the tenant’s ledger.
Invoice / income created is an account receivable (A/R) and must be recorded as paid once money has been received.
Payment is considered any form of money that the tenant gives you for a charge.
This can be an online payment, check or other forms of payments. Once received, best practice is to close the transaction record and mark it as paid.
- My tenant gives me a check for rent due on the 1st of the month. I click into the automatically created rent transaction record and record it as a payment received by check and deposit the money in the bank account that I select.
- I manually invoiced my tenant for a one time repair charge and he wires the amount into the operating bank account. The income that I recorded for this repair needs to be marked as paid and associated with the wire that the tenant was doing.
Payment types include:
- Wire transfer
- Online payment
Record Bill / Expense
Property-related expenses occur even more frequent than rent income. Through the course of a month you typically have a variety of expenses to pay. Most times you will receive a bill.
Within the accounting module, you will find ‘add expense / bill’ in the dropdown, allowing you to record a bill or expense. You can record it as a one time or a recurring expense within ManageCasa.
If you have an expense that is fixed in it’s amount and is recurring on a set schedule you can set up a recurring expense component and this will create expense transactions records that will remind you about upcoming payments that need to be made.
- An Internet bill is typically a repeating charge that you can record as a recurring transaction within accounting that that will remind you when to pay that expense.
- You had a contractor do a repair and he bills you for his service. You record the bill with the due date.
Make a Payment
An Expense / Bill created is an account payable (A/P) and must be recorded as paid once the expense / bill has been paid.
The payment that you make can be in the form of an online payment, a check or another form of payments. Once paid, you should close the transaction record and mark the expense record as paid.
- I make an online payment for the internet amount automatically every months.
- I write a check to my contractor for the amount that he billed me.
Record & Refund Deposit
Less frequent than income and expense payments are deposit payments and refunds of deposits. Nevertheless it is equally important to hold the amount given to you in a security deposit bank account and to treat the amount as a liability that you owe to your tenant.
You will record the amount in ‘add deposit’ and once you receive the money you will record the amount as received.
Once your tenant moves-out you have to refund the deposit amount. Follow the article explaining how to refund deposits to see how this works.
Manage Bank accounts
Advice: We recommend you open an operating account with an owner contribution to have reserves in the bank for regular operation expenses and working capital.
Note: Operating accounts need to be associated with properties. Read here.
With the operating account you will receive payments that will be wired straight to the account or you will deposit money into the bank account.
Make Payments from:
From the operating account you will make online payments to pay bills or give a vendor a check so that the amount can withdrawn (credited).
- Tenant will pay rent online into your operating account for rent. You can reconcile with your bank to close out any open transactions and mark them as paid.
- Tenant will drop off a check for a security deposit. You go to your bank and deposit the check into the operating account.
- I pay a fixed monthly charge to a vendor with an installed wire transfer. I will need to reconcile with the bank to close out any open transaction and mark the open expense transaction as paid.
Reconcile bank accounts
A bank reconciliation is when you compare your bank statements with your bank accounts in ManageCasa.
With reconciliation you can identify missing transaction records, wrongly selected bank accounts and double bookings.
Once the reconciliation is done you can be sure your reports will be correct.
- At the end of the month you reconcile your bank account in ManageCasa with the records that show on the bank statement.
- Forgetting to do a reconciliation as a property manager every month might have legal implications.
Pay Rental Owners (Property Manager only)
As a property manager you are required to pay your rental owner with an owner distribution, once rent has been received and all expenses have been paid.
The payment of a rental owner is called owner draw and is an equity transaction.
As long as you book all income and expenses correctly each month, ManageCasa can run an owner statement for you to find out how much money you need to distribute to the rental owner as an owner draw.
Usually with an owner draw you also present an owner statement to the rental owner. The owner statement reflects the amount that you have booked as the owner draw.
Run financial reports
Above we just mentioned the owner statement as a financial report that you can run in real time and is accurate as long as you have followed the steps above. In addition you can when needed run other reports like cash flow statements, balance sheets, income statements, and more.
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