Overview of Accounting Month End

Transcription

1 Overview of Accounting Month End AME is a two-step process. The basic part is for the property accountants to create journal entries and then advance the properties A/R (accounts receivable) period to the next month. The journal entries establish your potential, vacancy loss, etc. on that month s financial statement. Advancing the A/R month sets the accounting period where new A/R transactions (charges and receipts) will be posted. The other part of AME is an extensive review to ensure accurate information. First the personnel at the property review the data and submit a tie-out report to accounting. Then a property accountant will review financial data. If the information is correct, they will post the journal entries and advance the month. If they find mistakes, they will contact the property and wait for corrections before further review. The property level review is extensive but should not take too much time. The review can be done earlier in the month to catch mistakes but must be completed as of the scheduled AME date. All move-ins before the Accounting review must either be moved in or rescheduled. All reports must be reviewed and corrections completed. On the scheduled AME date by close of business: Any final receipts must be posted All open charge and receipt batches must be posted or deleted The Tie-Out report must be reviewed and then submitted to accounting From this point, the property should only be doing light duty in Voyager work orders, notices, guest cards and payables. No resident charge or payment transactions should be posted. (Invoices Registers are OK.) There is an exception to close of business on the day of AME. If your AME falls on a Friday, and the accounting review is not until Monday, then you may continue working within Voyager until close of business Sunday. This will allow properties that are open on the weekend to properly record traffic specifically moveins and outs. However, the tie-out should be reviewed on Friday and no further receipts should be entered in the system. A final tie-out should be submitted before close of business on Saturday or Sunday, after all activity is complete. Accounting reviews properties on a first in first out basis. After the review is complete, journal entries are posted and the month is advanced. Site personnel are advised by that AME is complete and normal work may be done in all areas of Voyager.

2 AME Review completed before the scheduled AME date 1. Shred scanned personal checks received during the prior month s accounting period. Shred checks for the prior period not the current period that you are closing. For example, if you are doing AME for June, then you should shred May s checks. Note that money orders, cashier s checks and bill-pay checks are not shredded monthly but are retained for at least one year. 2. Review the Purchase Order Dashboard for PO s that need to be closed or voided. Search for overdue invoices. Use the PO Dashboard to review for Partially Paid PO s and then Unpaid PO s. Close PO s that are complete or will not be used. Contact vendors for unpaid PO s with no invoices that are excessively old. 3. Enter any charges, receipts or reversals applicable to the current month period for any resident. Charges Post all charges for residents. Receipts - Drucker and Falk policy prohibits holding any receipts other than security deposits for pending applications. All other receipts should be deposited. Reversals these would include incorrect charges and payments. 4. All open charge and receipt batches must be posted and zero batches deleted. You cannot go AME with open charge or receipt batches. Finalize and post any batches in progress. You should delete any batches with a zero balance. Search for batches using the side menu functions. Charges > Edit/Post Charge Batch filter for the batch type Open Only and look for batches associated with your property in the description field Receivables > Edit/Post Receipt batch filter for the batch type Open Only and look for batches associated with your property in the description field 5. Yardi Portal users only - Review the Collect Dashboard for Failed Receipts, NSF Receipts, and Other Returned Items for the period from the date of the last AME to the current AME. Ensure that all Failed Receipts and Other Returned Items have been reversed and all NSF Receipts have been processed as NSF. Communities with Yardi Portal must ensure that all returned and process failed items are properly accounted for within Yardi Voyager: Failed Receipts these must be reversed because the payment never reached the bank even though they posted into Yardi Voyager. Other Returned Items did go to the bank but were returned for a reason other than NSF. These payments must be reversed. Check for Failed Receipts and Other Returned Items on the Collect Dashboard. The only method of verifying reversal is to drill down on the payment. If there is no [Reverse] button, then it was reversed. NSF Receipts must be processed as NSF. Once they are processed, they will drop from the Collect Dashboard. If you filter on the correct date range, and no results are shown, then you have no unprocessed NSF receipts.

3 6. Review the Aged Receivable analytic to ensure that: a) Guest apartments have been credited properly to concessions. Artificial residents are created for guest apartments. They are billed rent monthly. Actual residents may rent guest apartments and pay a daily rate. The receipts are applied to the guest apartment resident. Before AME, outstanding delinquency should be charged off to a concession account. For example, if the unit has a $ balance then a charge should be posted for one of the concession accounts. The unit should not have a delinquent balance. Delinquent balance = account not charged a concession. Post a concession equal to the delinquent amount. Prepaid balance = Prepaid balances are OK if you collected more than a month s rent from residents, however you should review carefully to ensure that the concession credit was not entered incorrectly (too much credit). b) Balances for PAST residents have been written off per collection guidelines balances are usually written off: Immediately if the resident skipped or was evicted After approximately 30 days if they have a balance due (following the Balance 1 letter, the Balance 2 letter after 15 days, and the Balance 3 letter after 10 additional days.) 7. Review the Daily Activity Report and balance the following sections: a) Review Resident Exceptions. Fix exceptions that can be corrected such as past due move-outs or move-ins. Some items cannot be corrected such as Lease Term less than minimum on employee leases or other approved short term leases. b) Review on-notice. Ensure all move-outs have been completed or any date changes have been entered. If a resident is on notice and their move-out date has past, you need to determine why. If they have turned in their keys, then move-out the resident. If their move-out date has changed then adjust dates. c) Move-ins. Ensure all Move-ins have been completed. If a future resident's move-in date has passed, then you need to determine why they have not been moved into the system. Move-ins should be completed by close of business on AME. If the resident cannot move-in then their date must be adjusted. If you do not change the date or move-in the resident, then the unit will show zero potential. This is not allowed. Please note that if you change a move-in date then you either need to change it back after AME is complete, or print and execute a new lease. The lease beginning date must match the move-in date. d) Ensure all appropriate Deposit Accountings have been performed. If a past resident's liability has ended, their apartment inspected, all damages assessed and estimated, then deposit accounting should be performed. If you are waiting for damage estimates or will have additional liability, then wait to do the deposit accounting. NOTE Deposit Accountings will not list for affordable properties. Review residents listed on the Dashboard link for Deposit Accounting.

4 8. Review a Receipt Register for the current period for account Any receipts from past residents will need to be reapplied to Recovery of Bad Debts. Receipts from past residents should be posted to the charge code recbdebt (Recovery of Bad Debts). If you make a mistake and post to baddebt then the receipt must be reapplied correctly before AME. Review the Receipt Register analytic to identify receipts posted incorrectly. This is on the AME role. The filter settings are: Tran Type = Receipt Property Account = Period = current account period (from and to) The Receipt Register will list all receipts to account Bad Debts. The system automatically transfers money when you write off bad debts. Do NOT reapply these receipts. The receipts that need to be reapplied have check numbers. These are actual payments that you posted but applied to baddebt by mistake. Non-Resident Receipts o Drill down on the Control# to enter the receipt screen o Click the [Reapply] button o Click [OK] to confirm that you want to reapply this receipt o Enter the Non-Person Payer name and [Tab] or click out of the field. o Enter the correct charge code recbdebt into the body on the line with the amount o Click [Save] o The system will automatically reverse the incorrect receipt to baddebt and create a new receipt to recbdebt Resident Receipts o Drill down on the Control# to enter the receipt screen o Click the [Reverse] button o Enter the appropriate filter settings including a Note Should be posted to recbdebt and [Save] o Repost the payment as a single manual receipt

5 #9. Review the Security Deposit Activity analytic for past due and prepaid balances. Review PAST and CANCELED residents to ensure that you didn t miss deposit accounting. The Security Deposit Activity analytic needs to be carefully reviewed with these filter settings: Property = your property # Month/Year = current accounting period for both fields Report Type = Security Deposit Activity Summarize by = Resident The (Prpd)/Delng Deposits column needs to be reviewed: Delinquencies review all positive amounts in the (Prpd)/Delnq column using these guidelines: o Charges to applicants before the lease is executed should be paid in full. Delinquent deposits without a signed lease should be corrected. o Charges that have been paid but the payment was returned (NSF) are OK. You should be actively collecting the past due balance. o If the lease has been executed (signed) then the delinquency is OK as long as the payment is in processing. Payment plans are not allowed - the full amount of the deposit is due upon move-in. We will honor any existing promissory notes so those balances would be OK but future applicants need to pay the full security deposit by the move-in date. o Corrections to delinquent deposits: Reverse the payment receipt for the charge Reverse the security deposit charge Post a security deposit charge in the amount that you have actually collected Repost the receipt that was reversed Prepaids review all negative amounts in the (Prpd)/Delnq column. These represent open negative charges that should be applied to another account or to prepaids. If you identify one, print a Receivable Detail by Charge Code report for that specific resident. Review their account to determine why the credit was issued. In most cases, a Zero Cash Batch needs to be done to complete the correction and apply the credit to either an outstanding charge or to prepaids. Examples of (Prpd)/Delng Deposits The $61.50 delinquency needs to be reviewed. This is a current resident so you should check the lease to see if it was executed and if it is for $ which is the total billed. Why does this account have a credit? The credit needs to be applied to an open charge or prepaids. You must also review your Resident status to look for CANCELED residents with Deposits on Hand. It is OK if a PAST resident is waiting for deposit accounting. However, if you mistakenly use the [Clear Applicant] button (it should never be used) then a canceled applicant may have outstanding deposits that need to be adjusted. Use Adjust Deposit Accounting from the Leasing Step Application Status Credit the security deposit in the amount of deposit listed as on-hand on the Security Deposit analytic. Enter any offsetting charges (such as forfeit or damages) and post

6 10. Review the Unpaid Charges report for unpaid charges with negative balances. These may need to be applied to existing charges using a Zero Cash Receipt. Concessions which exceed the current month s rent charge must be adjusted and scheduled as a one-time lease charge. There are three primary types of open charges with negative balances: 1. Charge adjustments created because the original charge was for an incorrect amount and could not be reversed 2. Concessions that were not fully applied to open rent charges 3. Subsidy overpayments Charge adjustments are necessary when you post a charge with an incorrect amount but the original charge cannot be reversed. If the adjustment is a negative charge, the system will attempt to apply it to other open positive charges. The negative charge will be unpaid if there is nothing to apply it towards It will be partially paid if there are not enough open charges to fully consume the total negative amount Either scenario will result in an open charge with a negative balance. These should be reviewed to ensure that the original adjustment was correct and that the balance cannot be applied to other open charges. If you have open positive charges with balances that exceed the amount of the negative balance, manually run a zero dollar receipt to fully pay the charge with a negative balance. Examples: You have an open charge with a balance. The resident also has open charge(s) with balance(s) that equal or exceed In this case you can create a manual zero dollar receipt to fully pay the negative charge. You have an open charge with a balance. The resident has positive open charge balances that total In this case, there is nothing you can do because the cannot be fully consumed. There are two scenarios where a concession can result in an open negative balance. The first scenario must be corrected. 1. The concession exceeds the amount of the current month rent charge. o Create a reversing charge The charge code is the same as the original concession The amount should be equal to the concession s unpaid balance on the Unpaid Charges report. However, the amount will be positive instead of negative. o Create a zero dollar receipt to fully pay both the outstanding concession and the adjustment o The concession amount to be applied to next month s rent should be entered as a one time lease charge for the next month. The begin date would be the first day of next month and the end date would be the last day of next month. The amount would be equal to the amount you adjusted, but it would be a negative charge. 2. Rents were charged, payments applied, and then the concession was posted. This is not the best workflow because it results in an open negative balance for the concession. However, there is not a practical method of correcting this. The negative Account Receivable balance will remain until the next month s billing. The concession is for the current month and it does not exceed the current month s rent charge. These are OK for AME. Finally, subsidy overpayments result in unpaid negative charges. These remain on the resident s ledger until the housing authority eventually takes back the subsidy overpayment. A negative receipt will fully pay the negative charge. These are OK for AME.

7 11. Print and review the Gross Potential Rent analytic. The "to date" should be the business day prior to your properties scheduled AME date. File the report in your monthly folder after you finish your review. Use the GPR Analytic on the AME dashboard or under Reports Property Residential Residential Analytics. Use these filter settings: to Date = the business date prior to your scheduled AME date. Month/Year = current accounting period Report Type = Gross Potential Rent Summarize By = Unit Unfortunately, the GPR analytic does NOT show subsidies. Properties with subsidy will need to review the printed report from Reports > Accounting Month End > Gross Potential Rent Unit Level. You can still use the analytic to drill down to ledgers and charges but you will need to review the regular report. A. Market rents Verify that market rents fall within an acceptable range. Market rents do not change unless you have adjusted either base rents or amenities. If you have not done that this month, scan the column to ensure that rates fall with the general range offered by your community. If you have adjusted rents during the period then you need to: Notify your Property Accountant of the rent adjustment by making a note on the with your tie-out report. They compare potential rents from one period to the next and will question changes unless they know it was for a scheduled rent increase. Verify that each unit has the correct rent. This can be done at the time of the rate adjustment by reviewing the increase report. B. Potential Rent is the amount of active lease charges for rent. Active lease charges have a begin date before or during the current period and have an end date during or after the current accounting period. Rent charges include multiple charge codes including rent, short, mtom, subsidy, and hap. Whenever potential is incorrect then a resident s lease charges are incorrect. Another way to look at this would be to say that if your resident s lease charges are wrong then your potential will be incorrect. You can easily drill down on the potential when viewing the GPR analytic. This simplifies reviewing and correcting a resident s lease charges. Things to look for when reviewing potential: Excessive Potential - an example would be an amount that is double normal market rent. This is often caused by double rent charges active in the same period. Minimal Potential - an example would be $80.00 potential on an $ a month apartment. This is usually caused by a typo on the lease charges. Zero Potential - there are two main causes: 1. No rent lease charges for the current period - check to ensure that the current resident has rent lease charges listed and that the effective dates reflect the current month 2. An overdue move-in the GPR report uses the move-in date to calculate occupancy. A future resident with a move-in date on or before AME will count as occupied on the GPR. However, future residents do not have lease charges yet. Ensure that either all move-ins are complete, or that you adjust the move-in date to be later than the accounting review. (You can adjust the date back after AME.) If you are reviewing ahead of time, make a note to finish the move-in by AME. If your AME stretches across a weekend, be sure to get the move-in done and submit the tie out before Monday.

8 Errors with potential are always corrected by fixing the residents lease charges. Drill down on the potential to see the lease charges. Review for: active charges during the accounting period double charges incorrect beginning or ending dates typos C. Loss/Gain to Lease - Review excessive amounts to ensure they accurately reflect the difference between a resident s lease and market rent. Problems with potential affect loss/gain to lease. They are both related to residents lease charges. Correcting the lease charges usually fixes both potential and loss/gain to lease. However, a review of potential rent may show all rents within an acceptable range but you may still spot an excessive loss/gain amount. Drill down on the link to potential rent to review the resident s lease charges. D. Actual Rent Verify that any zeros are for vacant units and that the Actual Rent matches the Potential Rent unless the unit was vacant during the month, that there were prorations due to a renewal, or that there were adjustments to a prior period. Zero Actual Rent = Vacant Unit - If a unit has zero actual rent then it must have been vacant for the entire accounting period. If the unit was not vacant then you need to check the current and past residents to verify that rent charges were accurately posted for the period they occupied the apartment. Actual Rent does not match Potential there must be some vacancy during the month, prorations due to a renewal, or adjustments to a prior period. These do not require correction. You can drill down on rent charges to view the resident s ledger: Move-in charges will have a description like Rent for 9 days. This indicates partial vacancy for the month. Prorations will have 2 descriptions like Rent 21 days and Rent 10 days Adjustments for prior periods occur for two reasons. o The first is a move-in during the prior period, i.e. on the 29 th. The ledger will show a proration for a couple of days and then the charge for the full month s rent. o Corrections/adjustment to a prior month should have descriptions that clearly label them as such like, Adjusts April rent to account for missed rent increase. Check your documents (leases and renewals) and then compare the lease charges with the charges posted to the ledger. The most common mistake is to adjust either the lease or ledger charges but not both. This can be corrected by adjusting whichever is incorrect (the lease charge or the ledger charges).

9 E. Vacancy Loss - Verify that any amounts in the vacancy column accurately reflect the current situation with that unit. a. Vacant Units - generally have vacancy unless a PAST resident is liable for the rent. Unless the vacancy loss exceeds your expectations or is greater than potential, vacancy loss for vacant units does not need to be reviewed. b. Occupied units - list the current resident s name. If vacancy loss is shown then you should drill down on the resident s ledger to seach for one of these two conditions. These are both OK. If these are not the cause then you should compare actual charges to lease charges. i. If the resident moved-in during the current month then there will be current month s charges with a description similar to Rent for X days. This is OK. ii. If there were prorations due to renewals then you will see two charges with descriptions like Rent 21 days and Rent 10 days. This is OK. c. All units - if vacancy loss exceeds the potential rent then the unit should be reviewed carefully both the current resident and any prior residents. i. Review actual rent charges for all resident types for the unit. Excessive negative charges can cause excessive vacancy loss. ii. Write-offs to rent will cause positive vacancy loss. Review the vacated resident s ledger for write-offs to rent instead of baddebt. Drill down on each transaction with a :Prog Gen WriteOff for chg# comment. If the charge code is for rent then it was written off to rent instead of baddebt. d. Credits to vacancy loss: i. Credits to vacancy are OK if: 1. They are caused by a move-in proration for the prior month. There will be a rent charge with a description like Rent for 2 days and another charge for the full month s rent. 2. They are caused by renewal prorations. In this case you will see two charges with descriptions like Rent 27 days and Rent 3 days. 3. They are for adjustments to a prior period. All charges are posted to the current period even if they are to correct an earlier month. These may cause credits to vacancy. ii. Credits to vacancy cannot be caused by: 1. Extra charges for the current month lease charges for rent are the monthly potential. You cannot exceed potential as charges for the current month. 2. Future month s charges we never charge for future month s rent ahead of time. 3. Double rent you cannot charge a new move-in and a vacating resident for the same day s rent. If a move-in is on the 15 th then the longest the vacating resident s liability can be is the 14 th. e. Tools for reviewing vacancy: i. Resident Ledgers current resident ledgers can be viewed by drilling down on the Actual Rent column ii. Receivable Detail by Charge Code report run this for the unit and it will list all residents regardless of their status. Run it for the current period to focus on the charges that affect the GPR. f. Correcting problems with vacancy loss: i. Reverse incorrect charges if possible and add new charges if needed ii. Credit charges that cannot be reversed. Note that a Zero Cash Batch may be required to adjust negative balances. iii. Write-offs to rent must be corrected by reversing the write-off receipt, reversing the write-off charge and then doing the write-off the proper way iv. Adjusting a resident s lease charges or actual (posted) charges so that they match

10 F. Concessions - Verify that any positive amounts in the concession column are accurate and used to adjust off prior month s concession amounts. Also review negative amounts to ensure they fall within an acceptable range and do not exceed the potential. a. Concessions are usually credits (negative numbers). If you need to charge back a concession because a resident is breaking their lease, or because of an error, then they would appear as positives. b. You should also review negative amounts to make sure they fall within the range of your concession policies. For example, if you have been offering a $50.00 monthly concession and you spot a $ concession, then you would want to investigate that credit. c. Concessions exceeding Potential you cannot post future month s concessions. These need to be reversed. 12. Review the Receivable/Prepaid Reconciliation Report to ensure all tie-out differences are zero. Check for open receipt and charge batches if there are differences. If you don t have open batches and cannot balance, forward the report to helpdesk for assistance. AME Dashboard > Receivable/Prepaid Reconciliation Report There are four sections to the report. The amount listed for Difference must be zero for each section. If the amount is any other value, then you are out-of-balance. The most common reason for being out-of-balance is open batches. The transactions exist, but since they have not been posted the general ledger the tables don t match. Check for open batches and post or delete those batches. If you do not have open batches, contact helpdesk for assistance.

11 GPR Checklist Market Rents fall within a generally accepted range Potential rents fall within a generally accepted range o Excess Potential o Minimal Potential o Zero Potential Loss/Gain to Lease falls within a generally accepted range Actual Rent o Zero Actual Rent should be for VACANT units only o Actual Rent does not match Potential OK if for move-in proration, renewal proration, or for and adjustment to a prior period Needs careful review if not meeting one of the above conditions Vacancy Loss o Vacant units are generally OK unless the amount seems excessive or exceeds potential o Occupied Units OK if due to move-in proration OK if due to renewal prorations o All Units vacancy loss that exceeds potential must be carefully reviewed. The most common cause is write-offs to bad debt. o Credits to vacancy loss OK if caused by a move-in proration for the prior month OK if caused by renewal prorations OK if caused by an adjustment to a prior period Error if caused by extra current period charges for the same resident Error if caused by future month s charges Error if caused by charging rent for the same day(s) for different residents Concessions o Positive Concessions o Concessions fall within a generally accepted range o Concessions that exceed potential

12 Scheduled AME date before close of business Post your final deposit Complete your AME review the Receivable/Prepaid Reconciliation Report to There is a print option to a PDF. You can then forward that to the Property Accountants. Make notes in the for: Market rent adjustments during the month Irregularities File the AME Checklist in your monthly folder. Limit your Voyager activity until Accounting advances your A/R month and notifies you by - Accounting will review reports and advance your A/R month. They will you when they have finished. If your AME date is on a Friday then the accounting review will be on Monday. If your office is open and you need to record move-ins and outs (for accurate traffic) then you may wait to submit your tie-out. Your AME will not be considered late until the actual day of AME review (12:01 A.M.) Until AME is complete then you must limit your Voyager activity to: Guest cards (but no posting of fees of any kind) Credit checks Notices Lease Renewals PAYscan all functions are OK These actions are prohibited until Accounting advances your A/R month: Move-ins Move-outs Deposit accounting Transfers Deposits Anything that creates charges including app fees and deposits Reminder you must review scheduled charges and expiring leases for the next month sometime following AME but before the 1 st. Monthly charges are posted on the night of the 28 th.

13 Prerequisites to an easy AME If you follow these simple guidelines during the month then you can avoid most of the common AME problems: Never use the [Clear Applicant] button do Deposit Accounting Don t use Rent as the write-off charge code. Rent should be written off to baddebt. Don t write off security deposit balances do Deposit Accounting, reverse the charge or issue credits Always receipt bad debt collections to recbdebt Never post future month s concessions in advance Never charge future month s rent in advance Don t charge rent to applicants or future residents. Review move-ins carefully and post concessions before payments Advance review! You do not have to wait until AME to begin reviewing your reports. You may begin any time after late fees have posted. At that point in the month most of your activity is done. An advance review gives you ample time to find and correct any errors. The review on the AME date is a snap! because problem accounts have already been corrected.