Accounting Part 7: Trust Accounting

Modified on Thu, 2 Oct at 10:28 AM

Introduction

Welcome to the Trust Accounting Tutorial!

While the Owner Statement offers a monthly snapshot of what an owner is owed or owes, it does not reflect the actual movement of money, whether payments have been made or received. Furthermore, and perhaps most importantly for compliance in many regions - just how much of an owner’s money you the property manager are holding at any given time. That’s where Trust Accounting comes in.

Located under S > Owner Management, Trust Accounting provides a real-time, detailed view of all cash flow activity. It tracks every transaction between you and the property owner, ensuring transparency and accuracy in managing owner funds across one or multiple properties.

Trust Accounting tracks every payment, credit, and deduction at the owner level—ensuring transparency, compliance, and confidence in your financial operations.

With Trust Accounting, you can:

View real-time balances across all properties owned by an individual
Record and manage both incoming and outgoing payments
Set and maintain retainer reserves for emergency expenses
Ensure accurate remittance calculations

All of this integrates directly with the Owner Remittance Dashboard, helping you turn detailed financial data into smooth, actionable payment workflows.

Let’s get started!

Trust Accounting is a key component of the GuestWisely Owner Management module. Learn more about the Owner Management module here.

Managing Owner funds

Trust Accounting is designed to track owner funds through separate ledger accounts, ensuring transparency and accurate balance management. You can find this feature in the left-side menu under Solutions > Owner Management > Trust Accounting.

Trust Accounting enables property managers to monitor an owner’s account at any time, tracking income received and payments made. This functionality acts as a financial checkpoint, offering a clear overview of cashflow between the property manager and the owner; therefore, unlike property-specific financial tracking, Trust Accounting operates at the owner level.

If an owner has multiple properties, the system consolidates revenues and cashflow for all properties under their name, rather than displaying them individually. Key details include:

Owner Statement Balance: The Owner Statement Balance reflects the financial position of an owner's account monthly.

A credit indicates the manager owes money to the owner.
A debit means the owner owes money to the manager.

Trust Accounting Balance: This is the total amount owed to the owner based on the rental income received, minus any expenses or deductions. It reflects the owner’s overall financial standing in the system at a given time.
Retainer: This is a reserve fund set aside by the property manager to cover unexpected expenses, such as emergency repairs, or as collateral during the termination notice period. The owner provides this amount in advance, and it remains held until needed. While it doesn’t immediately reduce the owner’s overall balance, it does reduce the portion of funds available for payout. In practice, the retainer is subtracted from the Balance to determine the Remittance.
Remittance: This is the amount transferred to the owner after accounting for the balance, retainer, and any deductions, i.e., the payout amount for a given period.

To determine the Remittance, the system subtracts the Retainer from the Balance:

The Trust Accounting dashboard (partially shown above) enables property managers to efficiently add incoming or /and outgoing payments and notes while maintaining a clear view of owner financial data. It also allows users to download or share reports via email directly from the interface, without navigating away from the interface. You can also give your property owners real-time access to Trust Accounting or any other report via our Owner Login solution, if you so choose.

Retainer requirement

The Retainer requirement refers to a reserve fund held by property managers to cover unexpected or urgent expenses. For instance, an owner may be required to provide $1,000 as a reserve, which can be used for emergency repairs like fixing a leaking roof or broken appliances without having to wait for the owner to transfer money.

To add a Retainer requirement, follow the below steps:

Navigate to Solutions > Owner Management > Trust Accounting..
Enter the retainer amount in the Retainer requirement field and click on Save.
A pop-up box will prompt you to confirm the retainer for a single owner, all owners, or selected owners. If an owner owns multiple properties, be sure to increase the retainer amount as needed.
Click on Confirm to apply the retainer.

For accurate record keeping the Retainer Amount is stored and managed in Trust Accounting. It is then also displayed on the Owner Remittance Dashboard (Solutions > Accounting), and optionally on your Owner Statement for your owners. The Retainer Amount has no correlation with the Balance amount.

Trust Accounting Breakdown

The Trust Accounting Dashboard provides a structured and transparent way to track financial transactions, ensuring accurate management of owner funds. Every calculation follows standard accounting principles to maintain clarity and consistency.

The process begins with the Owner Statement balance from the previous month and adjusts based on credits and/or debits:

Starting Balance (Owner Statement): The report begins with the balance carried over from the previous month (or the initial balance if it's the first report).
Adding Income: Any revenue or credits for the month are added to this starting balance. Those inputs can be made through the Incoming payment button, at the bottom of the page.
Deducting Expenses: Any debits, such as expenses or deductions, are subtracted using the Outgoing payment button, at the bottom of the page.
New Balance: The final amount after these adjustments becomes the updated balance for the current month.
Ongoing process: This cycle repeats each month, with the new balance serving as the starting point for the next period.

Example Calculation (Feb 28, 2025):

Previous Balance: €3,000 (from Jan. 31, 2025)
Credit: €1,500
Debit: €200
New Balance: €3,000 + €1,500 - €200 = €4,300

Final Calculations:

Final Balance: The balance on the most recent date (Feb 28, 2025) is the final balance (€4,300).
Retainer: The retainer amount (€500) is subtracted from the final balance.
Remittance: The difference between the final balance and the retainer is the remittance (€4,300 - €500 = €3,800). This is the amount the property manager owes to the owner.

Ensure your Trust Accounting balance is up-to-date

If Trust Accounting has not been used for certain owners, balances may appear significantly high. This reflects cumulative amounts owed over time, without recorded offsetting payments to the owner. Therefore, you need to:

Review the total balance for each owner.
Click on the Outgoing Payment button.
Enter an opening balance as an outgoing payment to reset the balance.

Once updated, you'll be ready to fully utilize the Owner Remittance Dashboard.

Streamlining payments with the Owner Remittance Dashboard

The Owner Remittance Dashboard is a powerful tool built on your Trust Accounting data. It transforms real-time balances, retainers, and owner payables into a clear, actionable payment workflow, saving you time and reducing manual effort.

From a single screen, you can:

View the trust account balance, retainer requirements, and amounts due to each owner
Process manual payouts or use the QuickBooks/Xero integration for seamless payment automation
Adjust, pause, and reconcile payments as needed
Maintain accurate records through automatic updates to Trust Accounting

Whether handling payouts manually or integrating with accounting software, the dashboard helps streamline the full remittance cycle from calculation to confirmation.

Please refer to the full Owner Remittance Dashboard tutorial here for more details.

Trust Accounting is a key component of the GuestWisely Owner Management module. Learn more about the Owner Management module here.