Property balances are extremely important to track but are often overlooked or put on the back burner. This can lead to unhappy owners, trust account commingling, and over-drafting your bank account. Get ahead of the curve and check your owner balances regularly using the Trust Account Balance report in AppFolio. Continue reading to learn more about this important report and how to track your owner balances.
The AppFolio Trust Account Balance (TAB) report is vital to keeping your books in check. You can use this report for a number of things, but today we will focus on Owner Balance Auditing. To customize the TAB report to review owner balances please set your customization settings as follows:
Once you have your report customized scroll through and check for any negative balances, both on the individual property level and the owner group as a whole. If your bank account is positive overall, but you have negative owner balances, you are commingling funds. But don't worry, we will walk you through correcting these!
With your customizations, you should be able to easily see if there are owners who have negative properties but enough funds in their portfolio to still be in the positive. In that case, the best practice is to use the "Transfer Owner Funds" function under "Payables" to even out the properties to clear up the negative balances. This is especially helpful to avoid overpaying an owner through their distribution since distributions are based on the property balance rather than the overall owner balance.
If you do not have any properties with negative balances, congrats! Keep up the great work. Make sure to recheck the Trust Account Balance report periodically to make sure you’re never commingling!
If you do have properties with negative balances, you’ll want to address those issues as soon as possible. There are several ways to resolve negative property balances. Depending on the situation you may need to:
We recommend that you run the Trust Account Balance report at the month-end as a part of your routine. This will help you stay on top of owner funds before the property sells, or before the balances get too far into the negative.
If you would like further assistance from one of our AppFolio Experts, or if you have additional questions, please reach out to us at email@example.com or call 281-949-8755. You can also visit our website at apmhelp.com to learn more about our services.