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Managing financial aspects for Short-Term Rental property management companies can be complex, especially when dealing with multiple bookings and various fees associated with them. Property managers often face challenges in keeping track of different types of fees and ensuring that each one is appropriately applied per booking. Without a proper system in place, this can lead to inefficiencies, errors, and difficulty in maintaining transparent bookkeeping. This is where Clearing steps in, offering a streamlined solution that allows property managers to efficiently create and manage fees per booking, ensuring accurate booking financials and better organization.
Clearing introduces a feature specifically designed to simplify financial management by allowing property managers to create and manage fees per booking with ease. This functionality automates fee management, saving time by automatically adding fees for each booking based on pre-set rules. It enhances financial visibility by offering a clear and organized view of fees within the booking details, making trust accounting and bookkeeping more transparent. With this feature, property managers can enjoy greater accuracy in tracking revenues, better organization of booking line items, and overall improved financial transparency.
Simple Steps to Create & Manage Fees per Booking in Clearing
Step 1: Access the Rules â "On Bookings" â âFee per Bookingâ Section in Clearing
Log in to Clearing and navigate to the "Rules" section from the left-hand menu. Click on "On Bookings", tab and then choose the âFee per bookingâ option. This is where you will be able to create and manage rules related to your bookings.
Step 2: Choose the Type of Fee & Define Rules
Once in the âFee per bookingâ section, you can click on the âType of feeâ dropdown to select the type of fee that will apply to each booking. Clearing offers four different types of fee per booking:
Percentage based fee
Flat rate fee per booking
Fee per night per booking
Import from transactions
You can choose the fee type that best suits your booking financial need and proceed with defining the rules accordingly.
There are four main scenarios related to the âType of feeâ.
Scenario 1: Percentage Based Fee
A percentage-based fee charges a percentage of the total booking value.
Step 2.1.1: Select the Type of Fee âPercentage basedâ
In the âType of feeâ section click on the dropdown arrow and select "Percentage based" from the fee type dropdown.
Step 2.1.2: Name the Rule
Name the rule for identification.
Step 2.1.3: Define the General Rule Status
If you want this rule to work moving forward with all bookings, ensure the status is set to "Ongoing".
Step 2.1.4: Define the Criteria for when the Fee Applies
Think of this as an âIf this, than thatâ type functionality. The items that gets isolated on the âifâ side, drive the outcomes related to the âthatâ side of the functionality. In this case, the âthatâ side creates a new booking line under the booking details, filtered by the categories and metrics related to the âifâ side.
The following are criteria that can isolate and trigger the occurrence of a fee to be added to the booking details:
Category: Choose the fee category based on your Clearing categories and chart of accounts (e.g., Adjustments, Accommodation Fare, Cleaning, Maintenance & Repair)
Booking Status: Choose the specific status of the booking (e.g., Confirmed, Pending)
Asset: Define the asset for which the fee will apply (multiples can be chosen)
Owner: Specify the owner of the asset, if necessary
Channel: Select the channel through which the booking is made (Airbnb, Vrbo, etc.).
Asset Group: Apply this rule to an asset group if multiple assets are grouped together already
After Date: Define when the fee should start being applied (e.g., bookings made after a specific date)
Until Date: Specify the end date, if any, after which the fee will no longer apply
Step 2.1.5: Define the Criteria for the New Booking Line Item
After defining the criteria for when this will happen, move on to the booking line item and confirm the following outcome information:
Category: Choose the fee category from your Clearing chart of accounts this new booking line item will fall under
Booking Line Type: Set the new booking line itemâs booking line type. Under all bookings in the âBookingsâ section of Clearing, you can see the different booking line types. These are categorized based on the Property Management System (PMS) integrations and the âOn Bookingsâ > âBy Typeâ rules. Click the drop down and explore the âtypesâ ensuring to set the type as per what makes most sense for the fee (eg. Refunds, Tax, Discounts, Cleaning Fee Collected, etc).
Description: Add a booking line description, if desired.
Percentage: Input the percentage applied on the incoming's category amount (e.g., 5% of Host Fee). âHost Feeâ would be selected on the âifâ side or âcriteriaâ side of the functionality, and â5%â would be the percentage of the âHost Feeâ that should be used to create the new booking line item
Trust Accounting: Indicate if this fee should be billed to the owner, management, or marked for tax reporting (often times this is left blank: see article on the trust accounting field)
Scenario 2: Fee per Booking
The fee per booking creates a new booking line item that is a flat rate for each booking that the formula is applied to. Here, you'll also set the criteria to determine when the fee applies.
Step 2.2.1: Select âFee per bookingâ
In the âType of feeâ section click on the dropdown arrow and select "Fee per booking" from the fee type dropdown.
All other steps for defining rules and booking line items are similar to Scenario 1, but instead of a percentage, you'll be entering a flat fee that gets added as a booking line item to the booking. For example, maybe you charge a $50 service fee on every booking for accounting purposes, but not through the booking channel itself.
For all other steps, refer to the criteria and output details from Scenario 1.
Scenario 3: Fee per Night per Booking
The âfee per night per bookingâ, does exactly as the name implies. It adds a booking line item as a fee for every night the reservation includes.
Step 2.3.1: Select âFee per night per bookingâ
In the âType of feeâ section click on the dropdown arrow and select "Fee per night per booking" from the fee type dropdown.
All other steps for defining rules and booking line items are similar to Scenario 1, but instead of a percentage, you'll be entering a fee per night per booking which will show up as a new booking line item on the booking details.
For all other steps, refer to Scenario 1.
Scenario 4: Import from Transactions
In this case, you can manually import fees from existing transactions.
Step 2.4.1: Select âImport from transactionsâ
In the âType of feeâ section click on the dropdown arrow and select "Import from transactions" from the fee type dropdown.
The criteria setup is similar to the other scenarios, but instead of defining a percentage or amount, you'll be importing fees manually or from the transaction tab once the booking line item is created. For all other steps, refer to Scenario 1.
Step 3: Verify and Cross-Check Booking Details with the âFee per bookingâ Rule created
Once you've set up the appropriate rules for the fee type you chosen, the fees will show up as booking line items in the booking details, ensuring that they are reflected in your trust accounting and financial reports.
To see this go into âBookingsâ section in clearing, choose the particular booking you want to see, and click on âOpenâ option.
Now you will have a new window, scroll down to âBooking financialsâ where you can see the fee under the relevant âbooking line typeâ.
Step 4: Reset Rule Functionality
If at any time you want to delete booking lines created with this formula, you can click the âReset ruleâ button and it will remove each of them. Use caution when doing this. While you can always re-add the rule, it does take time to go through and create the rule or apply them.
Take advantage of Clearingâs powerful rule based automation to seamlessly create and manage fees on your bookings. Enjoy the benefits of automated fee management, improved financial visibility, and streamlined trust accounting.
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Clearing is a Financial Technology Company, not a bank. Deposit Accounts are issued by Evolve Bank & Trust, Member FDIC.