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Managing booking financials is a critical part of vacation rental property management. Ensuring accuracy in booking reconciliation is essential to maintain trust with guests, owners, and amongst Short-Term Rental property management companies. However, challenges like mismatched transactions, incorrect reporting from the property management system (PMS), and unexpected adjustments often create obstacles. These issues can lead to discrepancies in payouts and financial imbalances within trust accounting.
To address these challenges, Clearing provides an effective solution: booking financial adjustments. This feature allows property managers to correct discrepancies, align financials with matched transactions, and maintain accuracy in their records. By offering flexibility and precision, Clearing empowers users to overcome financial discrepancies efficiently.
Clearingâs booking financial adjustments enable Short-Term Rental property managers to address financial mismatches with ease. With this feature, users can lock/unlock bookings, edit incorrect amounts, and ensure alignment with matched transactions in their bank accounts and ensure expected, accurate owner payouts. The ability to modify accounting fields, apply adjustments to categories, and leverage financial automation rules such as fees-per-booking or percentage based adjustments, makes Clearing a powerful tool for vacation rental financial management.
Additional options, like automating recurring financial tasks with rules, streamlines financial operations and minimizes the manual effort on property managers. With features like commission recalculation and the ability to refresh bookings, Clearing ensures financials are always accurate, transparent, and reconciled efficiently.
Steps to Manually Adjust Booking Financials in Clearing
Step 1: Access the Bookings Section in Clearing
Login to your Clearing account and navigate to âBookingsâ section in the left hand menu.
Here, you can pull up the booking that requires adjustment. This is often necessary when there is a transactional mismatch or if the bank account transaction doesnât create a full in-bank match in the booking reconciliation report.
Click âOpenâ button to go into the details of booking.
Once open, make sure the booking is unlocked to allow changes.
Step 2: Examine and Update Booking Financials
Once the booking is unlocked, review the booking financials, including guest charges, or channel service fees, etc. If the property management system has reported incorrect amounts, or some fee calculations are not able to be done in the PMS, you can manually (or automatically with rules âOn Bookingsâ) rewrite the financials to reflect the accurate values.
Ensure that the updated amounts align with the matched transactions and the expected payout to maintain consistency. You can confirm this in the booking reconciliation section shown below.
Depending on the reconciliation status, the colour and text will change. Green means it has been paid in full and the booking financials match the transaction financials. Yellow means there is a partial payment or partial match. Red means no transaction financials have been matched to the booking financials, or no payment has been received. For more information on how to match booking financials to transaction financials, see our article: How to Reconcile Bookings Revenue with Bank Deposits in Clearing?
Step 3: Adjust Accounting Fields & Commission Details
Use the accounting field to allocate expenses or revenues accurately. For instance, you can change who receives a specific payout, such as assigning a portion to the management company or send them to the property owners which will be reflected on the owner statements.
You can also manually change the percentage commission applied to specific booking financials. This value, by default, is based on the commission set up in the âRules on Bookingsâ section of Clearing which automatically calculates this value for each relevant booking (Learn more about here: How to Automate Your Management Commission Calculations with Clearing).
If manually adjusting commissions, make sure to click the âCalculate Commission Manuallyâ button to apply the correct percentages that were placed alongside each line item on the booking - this will trigger the recalculation for the âManagement commissionâ sectionâs results shown below.
Step 4: Add Booking Line Items Manually, If Desired
At any point in time, you can manually add whatever booking line item you desire to the booking record. To do this, find the booking line item category you would like to place the fee under, and click the â+â button beside the title.
Once selected, the line item will appear and can be adjusted as desired. You can also delete any line item desired, by clicking the trash can icon directly.
Step 5: Apply Adjustment Categories
In cases where additional fees or credits are needed, use the adjustment category feature to create balanced entries. For example, if you need to charge an owner fee while compensating the management company, input positive and negative values to achieve a net-zero effect on the booking financials update.
Step 6: Lock the Booking
After completing the adjustments, turn on the âFully lockedâ button to secure the changes. This prevents accidental overwrites by the PMS, which could revert the booking to its original state.
Step 7: Utilize Financial Rules - With Examples
Clearing also offers several rule-based options to automate financial adjustments. To leverage these rules navigate to the "Rules" section in Clearing. Click "On Bookings" and then choose the âFee per bookingâ, âOther formulaâ, or explore the other options to find what fits your goal best. âFee per bookingâ and âOther formulaâ rules are generally the most effective rules for adjusting booking financials with automation.
Step 7.1: âFee-per-Bookingâ Rule
The âFee-per-Bookingâ rule enables you to apply specific fees automatically to bookings based on criteria you define.
Think of this as an âIf this, than thatâ type functionality. The items that gets isolated on the âifâ side, drives the outcome related to the âthatâ side of the functionality. In this case, the âthatâ side creates a new booking line item for âcleaning fee actually paidâ under the booking details, filtered by the categories and metrics related to the âifâ side.
For example: If your property management system (PMS) does not capture an owner cleaning fee for bookings from the channel defined as "Owner Block Off", you can create a rule, choosing that channel name on left, and defining the outcome details on right. Here a new fee will be added to that booking based on the details applied in the âthatâ side of the transaction. In the case of adding a cleaning fee, this would have a category of Cleaning and an amount as defined by your owner agreements.
You can also create a matching duplicate entry that allocates this fee as income for the management company payout, ensuring accurate financial records.
For more detailed guidance, refer to our article: How To Leverage the Rule "Fee per Booking" On Booking Financials To Automate Your Trust Accounting.
Step 7.2: âFee-per-bookingâ - Import from Transactions
This option is ideal for aligning booking financials with actual transactions.
For instance, Stripe fees, such as those charged when the property management company is the merchant of record (Vrbo, Booking.com in some cases, Direct Bookings, etc), can be automatically linked to the booking financials. When a transaction categorized as a Stripe fee is matched at the transaction level, this rule creates a corresponding entry in the booking financials. This ensures that the booking financials remain balanced with the matched transactions, addressing any potential transactional mismatches.
There are other options for âFee-per-bookingâ types that can be used, but the two discussed above are common when dealing with booking financials. See other options below.
Step 7.3: âOther formulaâ Rules âOn Bookingsâ
For more complex scenarios, you can use formulas to combine multiple categories and calculations. This derives new line item data out of existing data, based on the formula that is established as per your business processes.
A common example includes breaking down the âlodging taxâ from OTAs that make the property manager the merchant of record into individual tax rates for that jurisdiction. Another example includes adding the Vrbo commission into the booking financial details. In these cases, if the PMS doesnât account for the exact commission structure of Vrbo (e.g., 5% of the accommodation fare plus other charges) - or if you are working with Vrbo set up to pay the total commission for all bookings monthly - you can create a rule to calculate and add this transaction to each bookingâs booking financials accurately and automatically.
By combining formulas, you can generate booking line item adjustments that aggregate all relevant adjustments and runs the formulas based on priority ranking, ensuring seamless updates to the booking financials.
Step 7.4: Consider Other Options Within Rules âOn Bookingsâ
There are various rules that can be utilized to help with automaton of booking financials and more are always being added. Rules âOn Bookingsâ âBy Typeâ for example, allow you to adjust how the fee structures defined in the PMS can be matched to the categorization system in Clearing. Be sure to check the different rules available and learn more about them through our knowledge base. Also, follow along with our product updates to learn more about how Clearing is improving these capabilities over time.
Take control of your booking financials with Clearing's booking adjustment tools. Whether you need to fix transactional mismatches, correct incorrect reporting from a PMS or OTA, or streamline financial processes using transaction bookkeeping automation rules, Clearing has you covered.
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Clearing is a Financial Technology Company, not a bank.