Cover Generalities, common stuff
Manual payment confirm
You might think that writing about payments would be easy, but because they touch so many parts of the Property Manger this is not so. In this topic I have tried to achieve five objectives and whether I managed the final one only you can judge. They are:-
To provide a "big picture" by putting the various payments and associated processing all together in one place.
To cover the "states" attached to a payment between creation and presentation.
To try and distinguish between manual and generated payments and how the system treats them.
To see where payments fit in, and how they are affected by, the internal bank reconciliation process, which will just be called "reconciliation" throughout this topic.
And finally to try and avoid complicated explanations, but I'm afraid the devil is in the detail so be prepared to spend a little time and get your thinking cap out. You will probably need to go through this a couple of times too.
I don't intend to cover everything in detail within this topic so use the links for more information. The last section of this topic contains a series of scenarios which demonstrate selecting what to pay and the controls needed for system integrity.
Money usually enters the Aspect Property Manager in only two ways, either by a tenant receipt or a landlord receipt, but it can leave by any of the following ways:-
a landlord payment
a supplier payment
payment of letting fees, management fees and GST to yourself.
a bond disbursement
a tenant payment
Only landlord and suppliers payments can be created by the system in the "Generate Payments" process, but they both may be created manually too. When the generate process creates these individual landlord and supplier payment records they are all assigned the same batch number so further processing and reporting can deal with them all as one entity consisting of many parts.
However, it is possible for existing manual payments to be drawn into a generated batch and this is covered later, but most will be stand-alone discrete transactions.
Fees and GST, bond and tenant payments can only be created manually, that is, the system will not "automatically" create payment records which "empty out" the account. Even though the option exists to include your Fees and GST into a Generate Payments batch it is still a manual payment because you have the ability to adjust the system suggested values during the Generate Payments run.
All payments, manual or generated, may be made by cheque (CHQ) or direct credit (DC), although payments to the bond authority within New Zealand are currently required to be made by CHQ. When the record is created the payment method and Payee name and Bank Reference fields are extracted from preset defaults -
on the Landlord Payment Details for landlord payments.
on the Supplier Payment Details for supplier payments.
on the Company Details for Fees and GST and Bond Disbursements.
and must be entered at the time for tenant payments.
Any payment record, however created, may have the payment method and any other details changed by editing the record which can be done right up to the time it is being presented in the reconciliation process. It obviously could be deleted too. Take care when changing any DC payment as it may be part of a DC payment batch which has already been paid by electronic banking and just hasn't been presented yet. Changing the Payment Method will obviously have an effect too.
There is no limit to the number of payments made in a period on any account or accounts apart from lack of money in them.
A payment record is first created, then confirmed and finally presented and these three "states" are used to control processing within the system.
A payment may be created manually or by the Admin menu > Payments > Generate Payments process.
Any manual CHQ payment with a blank Cheque Number is unconfirmed and will stay in that state until a cheque number is assigned manually or by drawing the payment into a generated batch by ticking "Include Manual Payments" when it will then appear on the Cheque List awaiting a number and the batch to be confirmed.
Any manual CHQ payment which has a cheque number entered when the payment is created, or by subsequent editing, is marked as "confirmed" and will then appear on the Enter Bank Statement Details screen and will not be drawn into a batch.
When a manual DC payment is created you will be asked if you wish to "confirm" the payment immediately:-
If you say "Yes" the payment will be marked as "confirmed" and remain as an individual item that can never be drawn into a batch. It will be available immediately for presentation in the Enter Bank Statement Details screen.
If you say "No" the payment will remain "unconfirmed" and must be drawn into a batch in the Generate Payments process by ticking "Include Manual Payments", otherwise it can never be presented in the Enter Bank Statement Details screen.
When any payment record is part of a Generate Payments batch, it is "confirmed" when the Administration > Payments > Confirm Payments > Confirm button is pressed. See the Confirm Payments section of the Generate Payments topic. Any payment record which is not "confirmed" can never be presented because it will not appear on the Enter Bank Statement Details screen. It will, however, show on the Bank > Bank Reconciliation Report with a "U" in the untitled column before "Withdrawals". See also Payment States Summary at the end of this topic but preferably after reading the rest of the overview.
Manual payments are those you create by individually selecting who and how much to pay . They are created from:-
the Transactions grid for landlords, suppliers and tenants.
the Bonds menu > Disburse Bonds selection for bonds
the Administration > Fees and GST Transactions > Payments button, or in the Generate Payments run, for Fees and GST.
Manual CHQ payments which have a Cheque Number entered prior to the Generate Payments run will not be drawn into a batch when "Include Manual Payments" is ticked (see below) nor appear on a Cheque List
Manual DC payments which were said to be "confirmed" during creation prior to the Generate Payments run will not be drawn into a batch when "Include Manual Payments" is ticked (see below) nor appear on a DC List
The Generate Payments program only creates payment records for landlords and/or suppliers and can also be used to "draw into" the payment batch being created any other previously created manual payments which have not been confirmed.
The creating records process merely does what you would do manually. It just does it faster. Each landlord and supplier account balance is examined and a payment record created providing the balance less the Hold Amount is positive and the balance also exceeds the Minimum Payment value.
The method of payment, (CHQ or DC), and content of other fields are filled using the preset values discussed above.
Delete unwanted payments or make any changes by editing the payment in the relevant Transactions grid.
Reasons to "draw in" other existing manual payments are perhaps best demonstrated by an example.
You have a number of ad hoc (not interim) payments to suppliers to make part way through the month which you wish to combine into a direct credit payment file.
Because you are not paying all suppliers at this time the payments need to be made manually, and if you don't "batch" them the DC payments will appear in the reconciliation as individual items but on the bank statement as a single "group" figure.
After making the manual payments run Generate Payments with only "Include Manual Payments" ticked.
Follow this up by printing and checking the Cheque and DC Lists and if all is OK confirm the Payment batch. (See Checking, modifying ... in the Bulk Payments topic).
Now the reconciliation shows those individual DC payments as a single DC Batch figure which should match the single figure on the bank statement. Any cheque payments of course will be shown as individual amounts.
When "Include Manual Payments" is ticked, any unconfirmed manual DC payments, and/or CHQ payments with a blank Cheque No, will be included in the batch being created.
When "Include Manual Payments" is selected in conjunction with any other choice, e.g. "Generate for Landlords", the batch will include all selected items.
Repeated Generate Payment runs will not make multiple payments unless more funds have become available in which case another separate payment will be created.
The situation can arise where you need to pay a distinct group of landlords more often, say bi-monthly, than the standard "once a month" payment run. By entering the same number in the Interim Payment List box on each of these landlord's Payments Details screen just this select group can be paid by choosing that number in the "Interim List" selection box in the Generate Payments run.
Several groups can be combined into a single payment batch by running Generate Payments a number of times. On the second and subsequent runs you will be given a warning that a batch already exists which can be ignored because the new run is to be merged with the existing records.
When the Interim List box is blank, all eligible landlords will be paid regardless of any entry in the Interim Payment List box .
Generate Fees and GST
This is the standard Fees and GST manual payment. The sole purpose of including it on the Generate Payments screen is to allow you to include the payment in the batch being generated. If the payment is made manually from the transaction grid and is to be included in the bulk end of month DC batch you will need to tick "Include Manual Payments". This then picks up all other manual payments, which you may not want, but which fit the rules for inclusion in the batch.
Include Manual Payments
Ticking "Include Manual Payments" will draw into the batch being created, any unconfirmed manual DC payments or CHQ payments with a blank Cheque Number. The batch may contain solely manual payments or be combined with generated payments. If the Fees and GST payment had been made from the Administration menu > Fees and GST Transactions > Payment button it will be included in the batch.
The purpose of this is to allow you to make a number of payments, perhaps over several days, but not write out the cheques, or make electronic banking payments immediately. Your policy may be to write cheques only twice a month, but in the meantime you want the system to reflect that the payment has been made. On "cheque writing day" run Generate Payments with "Include Manual Payments" ticked, then print the Administration menu > Payments > Cheque List and DC List. Use the lists to write out the cheques in the order printed and make your electronic banking payments follow the usual payment confirmation and payment procedures.
Include Bond Disbursements
If you made a bond disbursement and left the cheque number blank or used a DC payment that payment can be drawn into a batch and the payment made.
If you missed entering the cheque number, despite the warning, run generate payments with the appropriate date and Include Bond Disbursements ticked and you will be able to enter the missing cheque number.
Note A blank Cheque Number bond disbursement will not be picked up by ticking "Include Manual Payments".
Cheque List and DC List
Once Generate Payments is complete these two lists show the payments being included in the batch just created. The DC List shows the DC payments to be paid by transcribing to a direct credit payment form or paid electronically. See Create Direct Credit File. The DC List total is the figure that will appear in the reconciliation grid to match the bank statement once the batch has been confirmed.
The Cheque List shows the payments requiring cheques to be written. It will not include any manual CHQ payments with a blank cheque number, nor any unconfirmed manual DC payments, unless "Include Manual Payments" was ticked. Write the cheques out in the order listed and enter the number on the list in the space provided. If you print the list after batch confirmation the numbers applied will print.
Previous payment lists may be printed by selecting the desired batch or date.
Cheques vs Direct Credits
The Payment Method allows you to make payments out of the system by cheque or direct credit. Cheques are straightforward, you write something on a piece of paper and post it. But they are time-consuming, relatively clumsy and can hang around for days before being presented, which complicates your reconciliations. Direct credit (DC) payments are much faster and have quite a range of external options, although a few banks don't provide all services.
With DCs you can:-
Option 1. Transcribe the DC List on to a paper schedule which you take to the bank. Some banks offer a fax option which is the basically the same but without the walking.
Option 2. Use "Internet Banking" which connects you via a "free" public use internet program. This is not as effective as "proper" electronic banking and costs more to use in both money and time terms.
Option 3. Create a diskette containing the payment details and take that to the bank.
Option 4. Use an electronic banking program supplied by your bank which connects you directly to your bank and transfer a file with the payment details. There are methods within this method too.
Option 1 is strictly manual and quite suitable while the volume is low. However, because you must create a new payee each time, (involving more time and money) it is not practical to pay casual landlords and any but your regular suppliers this way. The same applies with reimbursing tenants, vacated or not.
Option 2, Internet Banking, is a really only an "electronic Option 1" which to me only has the advantage of not having to take the schedule to the bank. You still have to key all the payment amounts in manually and set up the individual accounts. Since you get charged for setting up each account it is not much use for casual landlords and one time suppliers. The transaction cost is higher than options three and four too.
The next two, options 3 and 4, are electronic transfer methods which remove those barriers because you only have to supply the payee's account number and the payment details in a file. There is no special setting up for new payees so if you get your casual landlord's bank account number you can pay them just the same way as other landlords. Saves time, money and postage too. Isn't life easy ?
However, each bank likes to do things their own way and the electronic banking software does vary between banks. There are some who do actually use the same file layout luckily. You will need to talk to your bank about what is available and they usually charge for the electronic banking software plus a transaction fee which is less than the paper schedule option. Some banks supply the software free when a trust account is involved and I am sure it not because of altruistic leanings. I have heard of sites where the software charge was waived when moving the trust account was suggested.
Once the DC List has been checked and approved pressing the Administration > Payments > Confirm Payments > Confirm button makes the DC batch available to the Administration > Payments > Create Direct Credit File program. This creates a disk file containing the payments details in the format required by your bank. The file is then copied to a diskette (option 3), or picked up by the electronic banking software, authorised and then sent to the bank on a direct dial secure line.
The electronic banking software also allows you to make payments directly without creating a DC file which makes it suitable for making "one-off" payments such as casual lets. You don't get hit with the account set-up charge either. If you don't want to create and transfer the DC file you can set up a table of "permanent" accounts and manually enter the payment amounts. Sounds a bit like an in-house internet banking doesn't it. However you may prefer this way to pay your suppliers.
There is one further advantage to using a proper electronic banking program and that is tenant receipts may be created automatically, see Tenant Receipt Import.
Payments and Reconciliation
When doing the reconciliation, on the bank statement you will see a single withdrawal which totals the value of the individual DCs made to pay the landlords etc. It would be nice to find one of the same value in the reconciliation grid rather than a couple of dozen individual payments which happen to add up to the bank statement figure. This is where the batching of payments and the confirm state come into play.
As covered above, the Generate Payments creates new payment records and may draw in some other manual payments. Each of these payments are grouped together by having the same Batch Number included in their record. At this stage, if we ran the reconciliation, we would not see any of the individual payment records because the payments have not been confirmed as you may wish to remove or delete (and they are different) a record from the batch or change the amount of generated payment for some reason.
Once you are happy with the payments shown on the Cheque and DC Lists you will click the Administration > Payments > Confirm Payments > Payments button. Now in the reconciliation grid there is just a single figure representing the total value of the DC payments which will match the figure on the bank statement.
Multiple Payments in one Period
There is no limit to the number of times within one period you make payment to anyone apart from running out of cash in the bank. Some sites do a Generated Payment run for landlords each week. You can run the landlord Interim payment run as often as you like too. Manual payments occur when they do and as often as you want. Think about that, it's very deep.
Who gets paid how much
Generate Payments pays out, subject to the Minimum Payment, the full supplier balance and the landlord balance, less any Hold Amount, providing the "balance" is positive. Manual payments generally default to the total held in any account and may be over-keyed. A manual payment from a landlord account does not take into consideration any Hold amount but the payment entry screen displays the Hold Amount set on the Payment Details screen.
How much can I pay out
The Generate Payments run only pays the account balance subject to the conditions mentioned above and will not overpay a landlord or supplier. Manual Payments, however, can pay out any amount you choose, but attempting to pay out more than in the account will result in a warning being given. The system does not stop you overpaying but the account will be overdrawn and if things go "pear-shaped" you will have to reimburse the trust account out of your own pocket/trading account.
What stops me paying out too much
Really nothing. It is harder to overpay landlords and suppliers using the Generate Payments because you would have to edit the generated record. This is not so with manual payments although the payment amount is filled with the account balance so you will have had to changed that too. However, as stated above, any manual payment which overdraws the account issues a warning that you are exceeding the account balance. Like everywhere else, ignore warnings at your peril.
A bounced tenant receipt which occurs after paying out can cause an account to be overdrawn which is a good reason not to pay casual landlords nor disbursed bonds received too quickly. Managed landlords are less of a problem unless you have a dodgy tenant.
Selecting What to Pay and Controls
One objective is to have the Aspect Property Manager "tell you" what should be paid out but achieving this, and at the same time retain flexibility, introduces some control requirements. This section addresses these controls and the relationships that exist between, the payments, the Cheque and Direct Credit lists and the internal bank reconciliation process. In particular payments made by DC, because on the bank statement they may show as a single entry representing either, a payment to a single landlord/supplier, or the sum of the payments made to all or several of your landlords/suppliers.
The series of scenarios below outline the steps and what you can expect to see at the various stages a payment goes through up to being presented.
I want to pay all my landlords both managed and casual but no-one else.
Tick only Generate for Landlords.
The system looks at all landlord account balances, deducts any Hold Amount and generates a payment record for any positive balance left providing it is greater than, or equal to, the Minimum Payment amount.
The Cheque List and Direct Credit List show only those generated payments. Any preexisting payments will not appear on the lists.
At this point, prior to Confirmation:-
4 The Confirm Payments grid shows all the generated payment records, i.e. those on the Cheque and Direct Credit Lists.
4 Payments may be Deleted from the Confirm Payments grid in which case the record is deleted entirely from the system, the landlord's account now has its "pre-Generate Payment" balance.
4 Payments may be "Removed from a Batch" in which case they disappear from the Confirm Payments grid, the Cheque and DC Lists and will not be paid out as part of this "new" batch. The payment record remains in the system and will now be treated as a manual payment. The next "Generate Payments" run will not pick them up unless "Include Manual Payments" is ticked.
4 Payment Amounts or Payment Type can not be changed in the Confirm Payments grid. Go to the landlord transactions grid and edit the payment to make any changes.
4 After any change the Cheque List and/or the Direct Credit List will need re-printing.
If you look in the Enter Bank Statement Details screen at this point you will not see any of these new payment records.
When all payments on the Cheque and Direct Credit Lists are as they should be, enter any cheque numbers required, then press "Confirm". This closes off the batch and makes the batch DC records available to the "Create Direct Credit File" process.
If you now look in the Enter Bank Statement Details screen you will see a separate payment record for each payment being made by cheque and a single Direct Credit entry representing all the individual manual DC payments with a value equal to the Direct Credit List total.
Any payment "Removed" from the Confirm Payments grid will still be in the system awaiting confirmation or some other processing decision but will not appear in the Enter Bank Statement Details grid.
I want to pay all my suppliers whatever is owed to them..
Tick only "Generate for Suppliers".
Same as for Scenario 1.
I want to pay both landlords and suppliers in one payment run.
Tick both "Generate for Landlords" and "Generate for Suppliers".
Same as Scenarios 1 and 2. Obviously the Cheque and DC Lists, the Confirm Payments grid and the Direct Credit File created contain both landlord and supplier payments.
I want to select some landlords and/or suppliers to pay by Direct Credit and or Cheque, (not Landlord Interim Payments).
Go to the transaction grid for each landlord and supplier being paid and make a manual payment for the amount to be paid and select CHQ or DC. Note that if you enter a Cheque number the payment is considered confirmed and will not appear in the "generated" batch.
Go to Generate Payments.
Tick only "Include Manual Payments"
No new records are created but the "recent" unconfirmed payments will be picked up into this new batch, along with any previously created but still unconfirmed manual payments. Payment records in existing unpresented DC batches will be ignored as they have already been confirmed as being part of a earlier batch.
Print the Cheque and Direct Credit Lists.
The Confirm Payments grid will display these "new" payments which may be removed, deleted or changed as per Scenario 1.
When all payments are as they should be on the Cheque and Direct Credit Lists, enter any cheque numbers required, then press "Confirm". This closes off the batch as before and makes the batch DC records available to the "Create Direct Credit File" process.
If you now look in the Enter Bank Statement Details screen you will see a separate payment record for each payment being made by cheque and a single Direct Credit entry representing all the individual manual DC payments with a value equal to the Direct Credit List total.
I want to include the Fees and GST being transferred to my Trading account in the "main" landlords' pay out being made at the end of the month so it is paid by Direct Credit and included in the Direct Credit File.
Tick "Generate Fees and GST" and "Generate for Landlords". You could also include any or all of "Generate for Suppliers", "Include Manual Payments" and Bond Disbursements too.
When [OK to Continue] is pressed the first payment to be made will be for Fees and GST. The same payment screen as you use when doing a manual Fees and GST payment will be displayed. Make any changes you wish then press [OK]. Print the Remittance Advice for your records.
In normal processing, if you left "Generate Fees and GST" ticked by accident and do not want to make the payment click [Cancel] and no payment will be created. If you had already made a manual Fees and GST payment this payment may be for $0.00, in which case click [Cancel] too. You will not be permitted to create a Payment which has no entries in Management Fees, Letting Fees and GST but the entries may add to a value of zero.
From this point continue as for Scenario 1.
When I create a casual (non-managed) landlord I place a Hold Amount on their Payment Details screen so I can make sure the Tenant's cheque clears before I pay the landlord. I also pay by direct credit into their bank account wherever possible by including their bank account number. I now want to pay some of them out at the same time as I pay my managed landlords (and suppliers).
Go to the non-managed landlords being paid out and
4 Either remove the Hold Amount, in which case a payment will be generated for the total balance in the same way as a managed landlord. In this case the next Generate Payments run with "Generate for Landlords" ticked will create a payment.
4 Or enter a manual payment for the amount being paid (you can leave the Hold Amount in place). This time you must either pay by cheque and enter a cheque number, or pay by DC and confirm the payment , or if the payment is to be made in the next Generate Payments run you must tick "Include Manual Payments" when starting the run.
Click [OK to Continue] to run the generate process and carry on as per Scenario 1
I have some managed landlords whose accounts are on hold but I want to pay some part of the total being held.
Go to the transactions grid for those landlord(s) being partly paid and make a manual payment for the amount to be paid.
If I am only paying just those particular landlords tick only "Include Manual Payments" and carry on as per Scenario 1.
If I am paying all my landlords at the same time tick both "Generate for Landlords" and "Include Manual Payments".
Click [OK to Continue] to run the generate process and carry on as per Scenario 1.
I have already run "Generate for Landlords" and now realise I have some managed landlords whose accounts are on hold but I want to pay some part of the total being held. I may also have some non-managed landlords I want to pay too.
Go to the transactions grid for those landlords who were missed out and make a manual payment for the amount to be paid.
Got to Generate Payments and tick only "Include Manual Payments" then [OK to Continue].
When the warning message appears select "Yes" to generate the new payments into the existing batch.
Carry on as per Scenario 1.
More on Payments and Reconciliation
When any payment appears on the bank statement it needs to be "ticked off" in the system as being "Presented". Whether it is a "stand-alone" manual payment, or one "drawn into" a batch, or those created by the "Generate Payments" process, they all have to be "Presented" in the Bank > Enter Bank Statement Details screen and to arrive there they must also be confirmed.
Manual payments remain available for presenting individually when:-
Made by cheque, because they appear on your bank statement as separate entries.
Made by DC and confirmed individually and not "drawn into" a batch.
Six manual payments, confirmed as such, will show as six entries on the reconciliation Enter Bank Statement Details screen and will need to be matched to six bank statement line entries.
When manual DC payments are "drawn into" a batch, as a result of the choices made in "Generate Payments":-
The individual payment records remain in the system and will be seen as such on all reports including the Direct Credit List before and after confirming the batch.
They will only be seen as individual items in the Enter Bank Statement Details screen if they were confirmed as such.
If they were drawn into a batch and then "confirmed" there will only be a single value in the Enter Bank Statement Details screen being the sum of all of the DC payments within the direct credit batch. (Any cheques remain as individual entries.)
Presenting this one sum presents all of the individual DC records which make up the batch.
Six manual DC payments "drawn into" a generated batch, plus 50 generated DC payments will display as a single value after the Confirm button is pressed. Presenting this one line on the Enter Bank Statement Details screen presents all 56 individual payments.
Six manual DC payments are "drawn into" a generated batch which included a further 50 generated DC payments. Two of the manual payments are then Removed from the batch. After the Confirm button is pressed the Enter Bank Statement Details screen will display one "large" single value which presents the remaining 54 DC payments. The two removed DC manual payments still exist in the system and will need to be drawn into a subsequent batch so they can be presented.
Six manual DC payments are "drawn into" a generated batch which included a further 50 generated DC payments. Two of the manual payments are then Deleted from the batch. After the Confirm button is pressed the Enter Bank Statement Details screen will display, one "large" single value which presents the remaining 54 DC payments. The two deleted payments will have to be created again when they are to be paid because the records were deleted entirely from the system.
Payment State Summary XXXX Look for another "Payment State" section heading
A payment passes through three states, created, confirmed, presented. Until a payment is confirmed it will not be seen on the Enter Bank Statement Details screen and can not therefore be presented.
When a payment is created:-
A manual CHQ payment with a cheque number is considered confirmed immediately.
A manual CHQ payment created without a cheque number is not confirmed but may be subsequently edited and the Cheque Number added and it will then be considered confirmed.
A manual CHQ payment created without a cheque number may be drawn into a "Generated Payments" batch by ticking "Include Manual Payments" and it can be confirmed as part of the generated batch.
A manual DC payment may be marked as confirmed when it is being created.
A manual DC payment which is not marked as confirmed when being created may be drawn into a "Generated Payments" batch by ticking "Include Manual Payments" and it can be confirmed as part of the generated batch.
Generated payments and manual payments drawn into a batch by having "Include Manual Payments" are confirmed in the Administration > Payments > Confirm Payments grid.
Any payment "Deleted" from the Administration > Payments > Confirm Payments grid, is completely eliminated from the system and will need to be created again when payment is to be made.
Fees and GST Payments