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How To Leverage the Rule "Fee per Booking" On Booking Financials To Automate Your Trust Accounting
How To Leverage the Rule "Fee per Booking" On Booking Financials To Automate Your Trust Accounting

Discover how to manage fees per bookings in Clearing, enhancing financial visibility and streamlining trust accounting Short-Term Rentals.

Corey Reid avatar
Written by Corey Reid
Updated over a month ago

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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 → "On Bookings" → “Fee per Booking” 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 “Fee per booking” option. This is where you will be able to create and manage rules related to your bookings.

Access the rules "On Bookings" section and choose "Fee per Booking"

Step 2: Choose the Type of Fee & Define Rules

Once in the “Fee per booking” section, you can click on the “Type of fee” dropdown to select the type of fee that will apply to each booking. Clearing offers four different types of fee per booking:

  1. Percentage based fee

  2. Flat rate fee per booking

  3. Fee per night per booking

  4. Import from transactions

Choose the type of fee and define the rule

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 “Type of fee”.

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 “Percentage based”

In the “Type of fee” section click on the dropdown arrow and select "Percentage based" from the fee type dropdown.

Select the type of fee "Percentage based"

Step 2.1.2: Name the Rule

Name the rule for identification.

Name the rule

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".

Define the general rule status

Step 2.1.4: Define the Criteria for when the Fee Applies

Think of this as an “If this, than that” type functionality. The items that gets isolated on the “if” side, drive the outcomes related to the “that” side of the functionality. In this case, the “that” side creates a new booking line under the booking details, filtered by the categories and metrics related to the “if” 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

Define the criteria for when the fee applies

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 item’s booking line type. Under all bookings in the “Bookings” section of Clearing, you can see the different booking line types. These are categorized based on the Property Management System (PMS) integrations and the “On Bookings” > “By Type” rules. Click the drop down and explore the “types” 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). “Host Fee” would be selected on the “if” side or “criteria” side of the functionality, and “5%” would be the percentage of the “Host Fee” 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)

Define the criteria for the new booking line item

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 “Fee per booking”

In the “Type of fee” section click on the dropdown arrow and select "Fee per booking" from the fee type dropdown.

Select "Fee per booking"

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.

Define the amount of the fee

For all other steps, refer to the criteria and output details from Scenario 1.

Scenario 3: Fee per Night per Booking

The “fee per night per booking”, 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 “Fee per night per booking”

In the “Type of fee” section click on the dropdown arrow and select "Fee per night per booking" from the fee type dropdown.

Select "Fee per night per booking"

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.

Define the amount per night for the fee per night per booking

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 “Import from transactions”

In the “Type of fee” section click on the dropdown arrow and select "Import from transactions" from the fee type dropdown.

Select "Import from transactions"

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 “Fee per booking” 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 “Bookings” section in clearing, choose the particular booking you want to see, and click on “Open” option.

Verify and cross-check booking details with the "Fee per booking" rule created

Now you will have a new window, scroll down to “Booking financials” where you can see the fee under the relevant “booking line type”.

View the booking details to confirm the fee

Step 4: Reset Rule Functionality

If at any time you want to delete booking lines created with this formula, you can click the “Reset rule” 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.

Reset the rule functionality

Take advantage of Clearing’s 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.

Are you ready to take your financial management to the next level?

Sign up for a personalized demo and discover how to create and manage a fee per booking in Clearing.

Explore our comprehensive knowledge base today to dive deep into Clearing's features and embark on a journey to revolutionize your financial management experience.

Clearing is a Financial Technology Company, not a bank. Deposit Accounts are issued by Evolve Bank & Trust, Member FDIC.

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