Property Management Fees are one of the expenses you have to consider before making any owner distribution. AppFolio has a way of calculating these automatically so that you can skip all the manual spreadsheets.

Here are the steps you need to follow:

1. Go to the Property Page and set them up. You’ll see a Management Fees section where you can choose between Percentage and Flat Fee.

2. It is recommended to:

  • Run the Pay Management Fees function at the end of every month after all funds subject to management fees have been received and vendor bills have been posted and/or paid.
  • Post property management fee bills before paying owners so that enough funds are held back from the owner to pay the PM Company.

3. You’ll find the option to Pay Management Fees in Accounting – Payables

4. Choose the Property for which you want to calculate the Management Fees. AppFolio also allows you to select property groups, owners, or portfolios.

5. Choose to run the calculation for Management Fees. In this case, AppFolio provides two options: End of Last month and Today. The first option has the advantage of collecting fees that were entered and backdated to the previous month or fees that may have been missed. The second option calculates fees incurred from the last time these PM fees were processed up to today.

6. Click Save and the list of management fees calculated will populate.

7. Review the fee amounts. You can click on the amounts, which will show the receipts list subject to management fees. Remember that you can choose what accounts are subject to Management Fees when you create them in the Chart of Accounts.

8. Once you’ve confirmed everything is accurate, you can click on the “Post” button and it will create a Bill for Management Fees, which you can also process and pay.

 

Remember:

If you reverse a Management Fee, AppFolio considers those fees collected and won’t assess fees for the same income again. Therefore, if a management fee bill is incorrect, it’s best to edit or manually recreate it before reversing the original bill.

Whenever in doubt, you can reach out to an AppFolio accounting expert who can help you set up the foundations for clean and accurate bookkeeping. If you have questions about this topic, do not hesitate to contact us.