How to manage advanced owner payments

In certain circumstances, it might be necessary to make an advanced payment to property owners. Here are a few scenarios and guidelines on how to handle these payments effectively.

Scenarios for Advanced Payments

Option 1. Guaranteed Rental Payment

This scenario involves pre-purchasing dates in a property for the year ahead. This guarantees the owner a fixed income and secures the availability of the property for your use.

Option 2. Early Payment Requests

An owner might require money urgently and request an early payment. This could be due to personal reasons or unforeseen circumstances.

1. Step-by-Step Instructions for Making a Guaranteed Rental Payment

IMPORTANT: When using guaranteed rental payments, it is always assumed that you have set your commission to 100% any income minus the guaranteed rental is your profit for that property.

1. Create a New Bill:

   • Navigate to the section where you can create a new bill.

2. Set the Supplier as the Owner:

   • In the supplier field, select or enter the owner's name. This ensures the payment is recorded under the correct owner.

3. Set the Date as the Payment Date:

   • Enter the date on which you are making the payment. This should be the current date or the agreed-upon date for the advance payment.

4. Bill Type 'Advanced Payment':

   • In the bill type or category field, select 'Advanced Payment'. This helps in identifying the nature of the transaction for future reference.

5. Add a Description:

   • In the description field, provide a detailed explanation of the payment. For example: "As agreed, payment in advance for the dates 1st June 2024 to 4th September 2024". This clarity helps both parties understand the purpose of the payment.

6. Record the Payment as a Credit:

   • The payment is considered a 'Credit' to the owner.
   • Enter the amount as a negative value to reflect that this is an advance payment. For example, if the total amount for the guaranteed rental period is £5,000, you would enter '-£5,000'.

Example Entry:

• Supplier: [Owner's Name]
• Date: [Payment Date]
• Bill Type: Advanced Payment
• Description: As agreed, payment in advance for the dates 1st June 2024 to 4th September 2024
• Amount: -£5,000

2. Step-by-Step Instructions for Making an advanced or early payment

1. Create a New Bill:

   • Navigate to the booking which you are going to make the early payment against
   • Click on the tab 'Management'
   • Click on 'Bill'
   • Click 'Add Bill'

2. Set the Supplier as the Owner:

   • In the supplier field, select or enter the owner's name. This ensures the payment is recorded under the correct owner.

3. Set the Date as the Booking Check In Date:

   • Enter the date on which the booking starts. This is CRITICAL to ensure the owner IS NOT paid TWICE

4. Bill Type 'Advanced Payment':

   • In the bill type or category field, select 'Advanced Payment'. This helps in identifying the nature of the transaction for future reference.

5. Add a Description:

   • In the description field, provide a detailed explanation of the payment. For example: "Payment made on the [date payment made] for BookingID: xxxxx ". This clarity helps both parties understand the purpose of the payment, remember this may flag up months in the future so it is important to be specific.

6. Record the Payment as a Bill:

   • The payment is considered a 'Bill' to the owner, as you do not want to pay the owner twice.  Imagine it is like a 'Journal' entry if you are used to accounting software.
   • Enter the amount as a positive value to reflect that you have already paid the amount and you want the statement to be balanced to zero. 

Step 4: Payment Execution

• Transfer the agreed amount using the standard payment method.
• Confirm receipt with the owner.
  • Send an email confirmation from within the iPRO booking, confirming that payment has been made and requesting that they confirm receipt.

Conclusion

Advanced payments to property owners should be handled with care and diligence to ensure transparency and mutual agreement. 

By following these guidelines, you can manage these exceptions efficiently and maintain a good relationship with property owners.