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How do I bill the owner for a negative balance owed to the trust?
How do I bill the owner for a negative balance owed to the trust?

Owner Statement deficient balance

Updated over a week ago

At the end of the month, sometimes the owner will owe money for expenses incurred without enough revenue to cover the costs. This will show as a negative ending balance in the owner statements. Some property managers prefer to let the negative balance to roll forward as a beginning balance in the subsequent month, offsetting future revenues. To make the balance roll forward to the next month, the statement must be put to "Published" status (no payout bill created) in VRPlatform. Even though no money is being paid to the owner, the statement must be put in a finalized status.

For those property managers that wish to bill the owner for the shortfall, an invoice must be created for the owner to collect the money due to the trust.

To bill an owner for expenses incurred in excess of revenues earned, perform the following steps:

  1. Before determining whether there is a true shortfall for the month, reconcile your books according to your month-end close procedures, and refresh your owner statement in VRPlatform, so that all transactions in QBO are captured in the statement. Go to the "Statements" page in VRP, select the statement with the shortfall, and regenerate the statement.

  2. Create a customer profile in QBO for the owner. There will already be a vendor profile for your owner where the bills for owner distributions are recorded, but this is not where the invoice for the shortfall will be recorded. It must be under a CUSTOMER profile.

  3. Record an invoice under the owner's customer profile for the balance owed using the product/service "Owner Balance Deficit." Record the amount of the shortfall, with the class of the listing and "Trust" location, dated as of month-end of the current period.

  4. Return to VRPlatform and regenerate the statement (can only regenerate in "Draft" status), and ensure that the invoice created is being captured in the statement, making net income and the ending balance net to zero.

  5. When the payment is received for the invoice to your bank account, match the deposit in your bank feed in QBO to the invoice for the shortfall created. QBO should recommend the match, but if there is no recommendation to match the deposit to the invoice, select find match, and select the invoice for the deficient balance.

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