To manage your booking finances accurately, it's important to categorize and account for each financial type correctly. In Clearing, a financial type represents different financial items like cleaning fees, pet fees, and certain discounts. These are set up in your Property Management System (PMS) and can vary by user.
When your PMS sends booking data to Clearing, it includes a list of these financial items for each booking. To streamline this process and avoid manually updating each booking, Clearing captures all financial item types and assigns them to the appropriate categories you’ve set up. Each category in Clearing can then be managed differently using the accounting field option, which is detailed here.
Once you’ve set up your rules, Clearing will automatically categorize and account for financial items in new bookings according to the categories you've defined.
Access Rules By Type In Clearing
Go to Rules and then make sure to be in the On Bookings tab. Then select "By Type". Here, you will find two tabs:
Uncategorized: list of financial types coming from your Property Management System that need to be associated to one of your categories in Clearing.
Categorized: list of financial types grouped by category. Each category is mapped to a "Display group" and an accounting option. The Display group is a general categorization of your booking financials.
Categorize Financial Types
Your goal is to ensure that the list of uncategorized financial type is empty. You will get a notification under the "To review" button on the top right if you have any types to categorize. Choose a category that is either already used in the list of categories in the "Categorized" tab, or select a new category.
You can also select multiple types and click edit to assign a categories in bulk.
Ensure That Each Category Is Properly Accounted
Once all your financial types are categorized, you can move to the "Categorized" tab. In this tab, you will find all your types grouped by category and you need to make sure that:
Each category is assigned to a "display group"
Each category is accounted, either to owner, to management, to tax or exclude.
On the left, you will find the list of categories that have been attached to your booking financial types from your Property Management System. Click on each category to display the list of types matched.
The display group is simply a general categorization of booking financials. When you open a booking, you will find that financials are grouped by "display group". Any extra fees such as pet fees, community fees, extra guest fee can use the "Other fee" display group.
Here's a brief explanation of each accounting option. Review our detailed guide for more information about the different accounting options.
To owner: goes in the owner statement
To management: goes in the management statement, not in the owner statement.
To tax: tax that you collect in your bank account and remit on behalf of your owner.
Exclude: excluded from statements, use when the amount is not collected in the bank or you have custom rules.
Note that you can click on "Open" to quickly see the bookings that have this financial type. This will help you to better understand if this type should go to the owner, management, tax or exclude. Also, you can click on "Refresh count" to get the number of bookings where each financial type is present.
You can also easily filter categories that have not been accounted for to focus on them. Check the box on top "Categories to review".
Apply Rules
Once you are done categorizing your booking financial types, you can select each category and click on "Apply (x) selected rules". This will ensure that all your booking financials are properly categorized according to each type.
Note that this step can take several minutes as this runs on your entire booking database.
You can also apply each rule individually by clicking on the 3 dots and clicking "Apply rule on existing data".
Leverage Custom Rules for More Granular Rules
You might need to apply different accounting options based on other criteria, for example the channel. For airbnb, taxes might be remitted by them and in this case, taxes would be marked "to exclude". And for other channels such as direct bookings, you might want to mark them "to tax" because you collect them and need to remit them on behalf of the owner. This can be done using custom rules on bookings to overwrite what the main rule by type does by default. For example the rules by type would mark "exclude" all financials under the "Lodging Tax" category. Then a custom rule can be applied to certain channels to change the accounting option to "to tax".
Please review our detailed guide about custom rules on bookings for more information.
Conclusion
With the Rules by Type Setup completed, Clearing will now automatically categorize your booking financials and allocate them to the right entity.
Connect with us for a personalized live demo today and learn how Clearing can transform your property management financial operations.
Explore our comprehensive knowledge base today to dive deep into Clearing's features and embark on a journey to revolutionize your property management experience.
Clearing is a Financial Technology Company, not a bank. Deposit Accounts are issued by Evolve Bank & Trust, Member FDIC.