Understanding Owner Statements

If you work for a fee-based management company, odds are that you realize just how important your owner statements are. Nothing can make your phone ring more furiously than clients who don’t understand their reports.

The owner statements in Rent Manager® are specifically designed for property owners and show how much money existed at the beginning of the period, the amount of cash that came in and went out, the total owner fees, the remaining balance at end of the period, and why. The why refers to the bottom of the report which lists additional transactions that don’t affect the profitability of your property (items like security deposits, contributions, and equity distributions).

Here’s a breakdown of where the information on your owner statements come from:

Beginning bank balance: This line shows the bank balance as it was on the first date selected in the report. It also ONLY represents the balance for the bank account listed as the owner’s bank. If the owner has money in more than one bank, it will not all be shown here.

Income: This lists the income for the owner’s ownerships as they are defined on the ownership tab.

Expense: This lists the expenses for the owner’s ownerships as they are defined on the ownership tab.

Net Income: Subtract your expenses from your income and you have the net result otherwise known as Net Income. Many people believe this is how much money your client should receive. In a perfect scenario this is true. However, your clients are paid based on how much money they have in the bank, not their income. It’s important to remember that not all money you handle is income! Security deposits are a great example of this.

Other Transactions: This section of the report shows how much money the owner was paid, any changes in deposit, or any other non-income/non-expense related General Ledger account you want to include. The point here is to help balance the listed transactions to the ending bank balance.

Ending Bank Balance: This line shows the ending balance using the last day in the reported date range.

Cash Requirements: This is an important one! This section shows how much money you are supposed to hold back based on the reserve amount and security deposit you are supposed to hold back. These options are set on the owner information.

Comments: Comments can be changed on a global basis under System Preferences-Owners.

To further educate your staff on how to read and understand Owner Statements, go to Reports > Owners > Owner Statement. When the Report Options menu opens, hit the F1 key on your keyboard. This opens a diagram explaining how each line on the report.

To educate your owners, we have designed a less detailed version of the same report. It can be found here: http://www.rentmanager.com/images/ownerstatementbreakdown.pdf