Why suppressed fees leave AppFolio owner statements short
Suppressed fees throw off AppFolio owner statements when they are collected or corrected in a different statement period than they were received. The fix, the Diagnostics check, and how to explain it.
A suppressed fee stays invisible on the owner statement only if it is resolved in the same statement period it is received or over collected. Collect it in the next period, or reverse it after collection, and the fee income splits across two statements, so the ending balance stops matching cash. The fix is to collect and reimburse additional fees within the owner statement period and check the Diagnostics page before finalizing statements.
What AppFolio does with a suppressed fee
A suppressed fee is an additional fee your company keeps 100% of, set up under Management Fees on the property with suppress ticked. AppFolio hides its charge, receipt and company bill from the owner statement. The post on suppressed fees and 1099 totals has the full definition. For example, a $50 suppressed fee:
- The receipt lands in the property, and the additional fee GL holds $50 of uncollected income.
- Pay Management Fees posts a $50 bill to your company.
- You pay the bill and the GL nets to zero within the owner statement period the income was received in.
If all three happen in one statement period, the statement ties to cash.
Where it goes wrong
- Collected the next period. A fee received on the 16th and collected on the 3rd of the following month lands on two statements if you send statements out on the 18th. The owner statement ending balance is thrown by the amount of the fee in both periods. Diagnostics shows a positive balance on the 18th.
- Reversed after collection. Reversals and credits are normal, but one posted after the fee was collected by the management company takes the income back in the reversal period while the collection stays in the last. Diagnostics shows a negative balance.
Left alone, either one rolls forward into every later statement.
The fix
- Turn on automatic management fee correction receipts under General Settings, Manage Accounting Settings, so Pay Management Fees captures over- and under-collected fees.
- Schedule Pay Management Fees daily. The post on management fee timing and the 25-day rule covers the compliance side.
- Work in this order: management fees, company bills, vendor bills, owner draws.
- Run Pay Management Fees as of the end of last month, then as of today, every time.
- Clear every Diagnostics section before finalizing statements and owner payouts.
Holding some suppressed fee bills back
AppFolio has no "pay everything except this GL" option, but you can filter Pay Bills by payee (the management company) and specific GL accounts, such as management fee expense, and pay one GL at a time. Just make sure you pay the bills you held back before the owner statement date.
Clearing Diagnostics
Under Accounting, Diagnostics, check Negative Balance and Positive Balance on Additional Fee GL Accounts.
- Negative: record an Other Receipt from the management company to the property with "Exclude from pay management fees calculation" ticked, then transfer the money from the company bank account back to the trust account.
- Positive: run Pay Management Fees as of last month-end. It only reaches back one month, so for older fees check the Bill Detail report for unpaid bills before entering a manual bill, to avoid duplicates.
Then confirm the owner statement ending balance matches the property's cash on the Balance Sheet. Full steps: correcting negative or positive additional fees.
What to tell the owner
"The $50 was a management company fee that passed through your trust account. It was collected a month after it came in, so it showed as a deduction without a matching line. Nothing came out of your rent." To show them, run the statement across both periods, or unsuppress the fee in question for that statement period and re-suppress afterwards.
FAQ
Can I collect a suppressed fee before it is receipted? No. Pay Management Fees only calculates on received income; a flat fee posted in advance is the only alternative. Never manually post a bill to collect a current additional fee: it leads to over collection once the income is received.
Diagnostics is clear but the statement still doesn't match cash? Check for suppressed prepayments, fees paid by a zero-dollar receipt (prepayment or credit), and suppressed move-out fees posted incorrectly. Also check the dates on the reimbursement or collection: if they fall in different owner statement periods, that is the problem, even when Diagnostics is clean.
An NSF posted. Should I wait and not reimburse the over-collected suppressed fees, since the tenant will repay this month? No. Reimburse any additional fees you collected from the original payment. The system creates a new bill once the income is paid again.
Key takeaways
- Collect suppressed fees in the same statement period they are received.
- The mismatch comes from fee income split across statements, not cash.
- Clear Diagnostics every month before statements go out, to avoid statement issues and cash shortages.
APM Help clears additional fee diagnostics and ties owner statements to cash every month. For a second set of eyes on yours, get in touch.