See How to PDF document #220 - Collecting Management Fees.
Also How to PDF document #392 - Management Fee Profile
The management fee parameters are associated with the unit profile. Management fee profiles are entered in Setup, Management Fees. Create as many management fee profiles as are needed to cover your agreements. If two or more units use the same parameters, only one profile is needed.
PROMAS maintains a management group (company) ledger that is the recipient of fees and other income derived from the property management activity. These funds are periodically – at your direction – moved out of the management group (company) ledger and put into the company operating bank account.
There are a number of methods available to take a fee. Regardless of the method used the fee amount is deducted from the owner or property ledger and credited to the management group (company) ledger. The method employed is chosen based on a combination of your agreement with the owner and state regulations.
The parameters for the fee amount can be identified in the Management Fee profile associated with each Unit or in the Property profile. The timing for taking the fee from the owner or property ledger depends upon the method chosen.
Methods
Based on Tenant Payment
This is the most comment method. The fee percentage is set in the Management Fee profile assigned to the Unit profile. When a charge that has been identified as "Subject to Management Fees" is posted to a tenant, the fee percentage is embedded in the transaction. When payments are made against that charge, the fee amount is computed based on the percentage and then expensed to the owner or property and credited to the management group for that owner/property. This all happens at the time the receipt is posted.
If the full amount is paid the full fee is taken. If the full amount is not paid, then the amount taken will be the percentage of that amount. Note that changes made to the management fee percentage after the charge has been posted will have no effect on the fee taken.
You can also enter a fixed amount that you want to take when the tenant pays. The program will compute the percentage so that if only a partial payment is entered, only a partial management fee will be taken.
NOT Based on Tenant Payment
The fee amount – percentage or fixed amount – is set in the Management Fee profile assigned to the Unit Profile. The amount can be a Percent of Market Rent (Unit profile), Percent of Actual Rent (Tenant profile), a Fixed Dollar Amount, or any combination of the three. No fee is taken when the rent is paid. The fee is taken (expensed to the owner/property and credited to the management group) when the function <<AR, Scheduled Receivables, Management Fees Not on Tenant Payment>> is run. Note that this method does not accommodate fees on charges to the tenant other than Rent. The function looks at the lease start date to determine when to begin taking fees.
This method is used if there is a fee taken when the unit is vacant. The fee calculation parameters are entered in the Management Fee profile. The fee is only taken when the unit has no tenants with a current status.
If you want to take (or give back) a fee amount on a unit, then using the <<AR, ProRated Rent>> function is used. In this function, whatever amount is entered in the Management Fee field is expensed to the owner/property and credited to the management group when posted. Note that entering a negative amount will reduce the owner/property expense and decrease the management group income. See Management Fee Adjustments, How To #204.
Based on Payments Received for the Month
This method covers two situations. One when, for a multi unit property, you want a single fee transaction for the month based on the sum of fee bearing income and the second when you have negotiated a minimum or a maximum monthly amount. To use this method the units involved must refer to a property as their ledger. The percentage and any minimum or maximum amounts are entered in the Property profile. Fees may be taken upon payment and if so, they are taken into account when the function <<GL, Scheduled Journal Entries, Reconcile Management Fees>> is run. Whatever amount is needed to make the monthly amount match the agreed upon amount will be posted. The basis for the calculated amount is viewable. The function can be run more than once a month. Whatever amount has been taken month-to-date will be part of the calculation if run more than once a month.
Paid by Invoice
Fee-based managers use one of the other methods because the fee is normally based on rent income. However, if the fee received is for services rendered and the management group (company) does not get the late fee and NSF check fee, then setting up a Recurring Check payable to the company for the fee amount is the easiest method. When the <<AP, Recurring Checks>> function is run, the fee amount becomes an expense to the owner/property ledger and a check is printed to the company.
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