Management Fee Automation

Q: Is the fee charged on rent billed or rent collected?

On rent collected — the money actually received on the property in the period. The Billed Amount you see on each line is the fee you've already billed for that property this period, which REDA subtracts so a re-run never double-charges. It's a guard, not an alternate basis, and there's no billed-versus-collected toggle to set.

Q: How is a fixed fee different from a percentage fee?

A Fixed agreement bills a flat Management Fee Fixed amount regardless of how much rent was collected, and the minimum and maximum don't apply. A Rent Percentage agreement bills the collected rent times the Management Fee %, then applies the Minimum (a floor) and Maximum (a cap) if they're set.

Q: What are the three documents, and whose books is each on?

The bill (fee revenue) is on your company's books, with the landlord as customer. The cost (fee expense) is on the landlord's books, with your company as vendor. The settlement (a journal entry that moves the fee cash from rent escrow to your operating account) is on your company's books.

Step-by-step Admin 14 min read Updated July 2026

If you manage property for other owners, you earn a management fee — usually a percentage of the rent each landlord's properties bring in. Doing that by hand every month, property by property and landlord by landlord, and then recording it correctly on two different sets of books, is exactly the chore REDA takes off your desk. When you run REDA Financials, a management-fee calculation reads how much rent was collected on each property, works out the fee your management agreement calls for, subtracts anything you've already billed, and then books all three sides for you: the bill to the landlord on your company's books, the matching cost on the landlord's books, and the settlement that moves the fee cash between your operating and escrow accounts. This guide is for your finance or owner-services team. No accounting or product background is assumed — we define every term as we go. By the end you'll be able to run a calculation, trace the fee on any property number-by-number, read every field on the result, and find each document it produces.

This is a configured capability. Management fee automation is installed and active, but no calculation has been exercised in the environment used to verify this article. Treat this article as a description of how the feature is built to work, and run a full calculation in a test workspace — confirming the on-screen labels, the fee terms, and the resulting documents — before you rely on it in production.

Getting there. Calculations run from the Management Fee Calculations tab. Open the App Launcher (the grid icon at the top-left of any page) and search for Management Fee Calculations; because where the tab appears in your menus is set up per workspace, ask your administrator for the exact path in yours.
Access you'll need. Running fee calculations is a finance-administrator task, because it posts to your ledger. If you can't reach the tab or the calculator, ask your administrator to grant the accounting access this feature requires.

How a fee run works, end to end

Before the detail, here's the whole run as a sequence. Everything later in the article is one of these six stages, expanded:

Configure once. Fee terms are recorded on each landlord's Property Management Agreement; your company and each landlord are set up as accounting entities with their fee defaults; and the rent and fee accounts are tagged as property-management accounts. This is the setup you do before your first run and rarely touch again.

Open the calculator. From the Management Fee Calculations tab, start a new calculation.

Pick the period and the scope. A Start Date and End Date (the window whose collected rent the fee is based on) and the landlord accounts to include.

Calculate. REDA previews one line per managed property — how much was collected, the fee it computed, and what's left to bill — plus any properties it had to exclude, each with a reason.

Review and post. Set the Invoice Date and a Batch Reference, check the lines, and post.

Read the result. Per landlord, REDA has booked the bill, the cost, and the settlement, and stamped the calculation record and its lines with status and links to every document.

The rest of this article walks each stage in order — but the heart of it is stage 4, the calculation itself, so we start there.

What the fee is charged on: collected rent

The fee is always computed on collected rent — the money actually received on a property's rent for the period, not what was invoiced. If a tenant is billed 1,200.00 but pays 600.00, the fee is worked out on the 600.00. "Collected" here means the rent recorded against that property's property-management revenue accounts, within the period you chose.

"Billed" is not an alternate basis. You may see a Billed Amount figure on each result line. That is not a choice of basis — it's the fee you've already billed for the property this period. REDA subtracts it from the fee it just computed, so re-running a period never double-charges. The basis is always collected rent; billed amount is only the double-bill guard. There is no billed-versus-collected toggle to set.

Two figures therefore drive every line:

Figure	What it is	Its role
Collected Amount	Rent actually received on the property's property-management revenue, in the period	The basis the fee is calculated on
Billed Amount	Fee already billed for the property this period	Subtracted from the computed fee — the double-bill guard, not a basis

The calculation, number by number

Each property's fee is worked out in two steps. The first computes the fee from the agreement; the second nets off what's already billed.

Step 1 — the fee from the agreement

How the fee is computed depends on the Management Fee Type recorded on the landlord's Property Management Agreement:

Fee Type	Fee Calculated is…	Then clamped by…
Fixed	the Management Fee Fixed amount — a flat figure, regardless of collected rent	— (no minimum or maximum applied)
Rent Percentage	Collected Amount × (Management Fee % ÷ 100)	the Minimum Management Fee (a floor) and Maximum Management Fee (a cap)

For a Rent Percentage agreement, after the percentage is applied REDA checks the floor and cap: if any rent was collected and the fee came out below the minimum, it's lifted to the minimum; if it came out above the maximum, it's capped at the maximum. The result is rounded to two decimals. A Fixed agreement skips all of that and simply uses the flat amount.

Step 2 — subtract what's already billed

REDA then nets off any fee already billed for that property this period, and never lets the result go below zero:

To Be Billed = the greater of 0 and (Fee Calculated − Billed Amount)

To Be Billed is the amount that actually gets invoiced. On a first run for a fresh period the billed amount is zero, so To Be Billed equals Fee Calculated. On a re-run it's whatever you've already billed — which is what makes re-running safe (see below).

Tracing one property

Take Harbour Tower, managed by Meridian Properties for the landlord Continental Holdings. Its Property Management Agreement says Rent Percentage, 8%, minimum 100.00, maximum 5,000.00. This period, tenants paid rent totalling 12,500.00 on Harbour Tower, and nothing has been billed yet:

Figure	Value	Where it comes from
Collected Amount	12,500.00	Rent received on Harbour Tower this period
Fee Type / Fee %	Rent Percentage / 8%	The Property Management Agreement
Fee Calculated	1,000.00	12,500.00 × 8 ÷ 100 = 1,000.00 (above 100 minimum, below 5,000 maximum → unchanged)
Billed Amount	0.00	Nothing billed yet this period
To Be Billed	1,000.00	the greater of 0 and (1,000.00 − 0.00)

So Harbour Tower's fee for the period is 1,000.00. Now see how the floor and cap bite if the collected rent were very different:

If collected rent were…	8% works out to…	Fee Calculated (after floor/cap)
1,000.00	80.00	100.00 — lifted to the minimum
12,500.00	1,000.00	1,000.00 — within range, unchanged
100,000.00	8,000.00	5,000.00 — capped at the maximum

Why re-running a period is safe

Say you post Harbour Tower's 1,000.00 fee, then run the same period again — perhaps a few more rents came in and you want to catch up. On the second run the billed amount is no longer zero; it's the 1,000.00 you already billed. So:

To Be Billed = the greater of 0 and (1,000.00 − 1,000.00) = 0.00

With nothing left to bill, Harbour Tower shows a To Be Billed of zero and is excluded from the run (its exclusion reason reads "Zero or negative fee amount"). Only genuinely new fee gets billed. This is why you can re-run a period as often as you like without ever double-charging an owner.

The three documents a run books

Once you post, REDA books the fee as real accounting documents — three of them per landlord, because a management fee is genuinely two events on two sets of books that then have to be settled in cash. For each landlord in the run:

#	Document	On whose books	Counterparty	Amount & lines
1	The bill — a Receipt-type Sales Invoice (the fee as your income)	Your company's	Customer = the landlord	One line per property, each at its To Be Billed
2	The cost — an Expense-type Purchase Invoice (the fee as the landlord's expense)	The landlord's	Vendor = your company	One line per property, each at its To Be Billed
3	The settlement — a Journal Entry that moves the fee cash	Your company's	—	Total fee for that landlord, moved between two banks

The bill and the cost are mirror images: the same fee, recorded as income on your books and as an expense on the landlord's, with each naming the other as its counterparty. The settlement then moves the actual cash: it takes the earned fee out of the rent escrow (where tenants' money sits) and into your operating account. Booking all three together, in one run, is what keeps your books and the owner's in step without anyone reconciling them by hand.

Where the postings themselves live. This article covers what each document is and whose books it lands on. The debit-and-credit mechanics behind a Sales Invoice, a Purchase Invoice, or a Journal Entry — how each hits the general ledger — are accounting territory, documented in the REDA Financials help center.

Which books each document lands on

Getting the routing right is the whole point, so it's worth stating plainly:

Document	Books it's on	Why
The bill (fee revenue)	Your company's entity	The fee is income you earned
The cost (fee expense)	The landlord's entity	The fee is an expense the owner incurred
The settlement (cash move)	Your company's entity	The earned fee moves from rent escrow to your operating account

The defaults these documents draw on live on each entity and are set when the account is activated: your company's entity supplies the Management Fee Revenue Product and the Management Fee Settlement Bank; the landlord's entity supplies the Management Fee Expense Product; and your company's operating and rent-escrow banks are what the settlement moves cash between. If any of those is missing for a landlord, that landlord's documents can't be built and the property is excluded — see Activating a Client Account as a Financial Entity for the full checklist. The finished documents also carry the property reporting dimensions, which is what makes property-level profit-and-loss possible (see Property Dimensions in Financial Reports).

One landlord, several properties

A run groups by landlord. A landlord with three managed properties gets one bill with three lines, one cost with three lines, and a single settlement for the total — not three of each. Each line names its property and carries that property's To Be Billed, so a single invoice still shows you the fee per property.

Setting it up: the prerequisites

A run only works for landlords that are configured for it. This is the one-time setup from stage 1. Confirm each of these:

Tag the rent and fee accounts. The rent-income accounts and the fee-expense accounts must be flagged as Property Management GL Accounts. This is the master switch: it tells REDA which money counts as collected rent and which as billed fee. If no rent-income account is flagged, the run won't even start.

Activate your company as an entity with a Management Fee Revenue Product, a Management Fee Settlement Bank, and its operating and rent-escrow bank accounts. This is where the fee revenue lands and where the settlement moves cash.

Activate each landlord as an entity with a Management Fee Expense Product. This is where the fee expense lands.

Set each property's owner and manager. Every managed property needs its Owner Account (the landlord) and its PM company recorded, so the run knows whose fee is whose.

Record the fee terms on a Property Management Agreement. Each landlord needs an agreement whose status is Closed (the signed, active agreement) carrying the fee terms below, valid for the period you're billing.

Match the currencies. Your company's entity and the landlord's entity must use the same currency — the run won't calculate a fee across two different currencies.

Where fee terms live: the Property Management Agreement

The fee terms sit on the landlord's Property Management Agreement. These are the fields the calculation reads:

Field	What it drives
Management Fee Type	Which formula is used: Fixed or Rent Percentage
Management Fee %	The percentage of collected rent (Rent Percentage agreements)
Management Fee Fixed	The flat fee amount (Fixed agreements)
Minimum Management Fee	A floor — the fee is lifted to this if the percentage falls short
Maximum Management Fee	A cap — the fee is held to this if the percentage runs over
Management Fee Calculation Notes	A note that appears alongside the property in the review grid

Running a calculation

With the setup in place, the run itself is quick:

Open the Management Fee Calculations tab and start a new calculation.

Set the period. Choose a Start Date and End Date — the window whose collected rent the fee is based on. The end date must be on or after the start date.

Choose the landlords. Select the landlord accounts to include from your list of active management clients.

Calculate. REDA previews one line per managed property — its Collected Amount, Fee Calculated, and To Be Billed — and lists any excluded properties with their reasons. Nothing is booked yet; this is a preview.

Set the Invoice Date and Batch Reference. The Invoice Date is stamped on every document the run produces; the Batch Reference is your own reference, copied onto each document, and it's required.

Post. REDA books the bill, the cost, and the settlement for each landlord in the background, stamps each line with its status and links, and records the date of the last fee calculation on each landlord's account. You'll see a confirmation along the lines of "Management Fee Calculation record has been created for [N] properties. The batch process is now running in the background to generate and post Sales Invoices, Purchase Invoices, and Settlement Journal Entries."

One run at a time; failed lines can be reprocessed. Because a calculation posts in the background, REDA lets only one fee run process at once — if you start another while one is still working, it tells you "A Management Fee batch is already running. Please wait for it to complete." If a calculation finishes as Completed with Errors, you don't re-do the whole run: reprocessing re-attempts only the lines that errored, once you've fixed the setup gap they name.

Do the month in order. Because the fee is based on collected rent, record your rent receipts for the period before you run the calculation — otherwise the run sees an incomplete picture and bills less than the owner owes. If more rent lands afterward, just re-run the period: the already-billed subtraction means only the new fee gets billed.

Reading the result

After a run, open the calculation record. The header summarises the run; the lines hold the per-property detail.

Field	What it tells you
Calculation Number	The run's own reference
Status	Where the run stands — one of New, In Progress, Completed, Completed with Errors, or Failed
Start Date / End Date	The period whose collected rent the fees are based on
Invoice Date	The date stamped on the bill, the cost, and the settlement
Batch Reference	Your reference, copied onto every document
Total Lines	How many property lines the run produced
Total Amount	The sum of To Be Billed across all lines — the total fee revenue expected
Succeeded / Failed	How many landlord groups posted cleanly, and how many errored
Journal Entry	A link to the settlement entry the run created

The calculation lines (one per property)

Field	What it tells you
Property	The managed property this line bills
Landlord Account	The owner — the customer on the bill
PM Company	Your management company — the vendor on the cost
Landlord Entity / PM Entity	The two sets of books involved
Collected Amount	The basis — rent received on this property in the period
Billed Amount	Fee already billed this period, which gets subtracted
Fee Type	Fixed or Rent Percentage, as taken from the agreement
Fee Percentage	The percentage used, on Rent Percentage lines
Fee Calculated	The fee before the already-billed subtraction
To Be Billed	The amount actually invoiced — the greater of 0 and (Fee Calculated − Billed Amount)
Sales Invoice Line / Purchase Invoice Line	Audit links into the bill and the cost this line produced
Status	Pending, Completed, or Error for the individual line

From any fee figure you can trace forward into the ledger — each line links the invoice lines it produced, and the header links the settlement — and from any posted amount back to the run that created it.

When a property is excluded

The preview lists any properties the run couldn't bill, each with a plain-language reason. These are the reasons you'll see, and what to do about each:

Reason shown	What it means & the fix
"PM Entity not configured" / "Landlord Entity not configured"	Your company or the landlord isn't set up as an accounting entity. Activate the account.
"Entity missing: …"	An entity is missing one of its fee defaults (a fee product, the settlement bank, or a bank account). Add the listed defaults.
"Currency mismatch (PM: …, Landlord: …)"	The two entities use different currencies. A fee can't be calculated across currencies — align them.
"Zero or negative fee amount"	Nothing left to bill — usually because the fee was already billed this period. Expected on a re-run.

If every property is excluded, the run tells you so and points you at the excluded list; if only some are, it flags how many and lets you expand the detail. Either way, the fix is almost always a setup gap on the entity or the agreement.

Worked example: Meridian bills Continental Holdings

Your company, Meridian Properties, manages Harbour Tower for the landlord Continental Holdings. The Property Management Agreement is Rent Percentage, 8%, minimum 100.00, maximum 5,000.00. This period, 12,500.00 of rent was collected on Harbour Tower and nothing has been billed yet.

The calculation. Collected 12,500.00 × 8% = 1,000.00 (above the 100.00 floor, below the 5,000.00 cap, so unchanged). Billed so far 0.00, so To Be Billed = 1,000.00.

The bill. A Receipt Sales Invoice for 1,000.00 on Meridian Properties' books, customer Continental Holdings, with one line for Harbour Tower.

The cost. A matching Expense Purchase Invoice for 1,000.00 on Continental Holdings' books, vendor Meridian Properties, with one line for Harbour Tower.

The settlement. A Journal Entry on Meridian Properties' books that moves 1,000.00 from the rent escrow into Meridian's operating account — the fee cash, earned and swept.

The stamps. The calculation record reads Total Amount 1,000.00, and Continental Holdings' account records this run as its last fee calculation.

If you re-ran the same period after posting, Harbour Tower's billed amount would now be 1,000.00, To Be Billed would fall to 0.00, and the property would be excluded as "Zero or negative fee amount" — nothing double-billed.

A completed Management Fee Calculation record, MFC-00527, status Completed with Total Amount 288.00

A completed Management Fee Calculation, MFC-00527. The highlights read Status Completed and Total Amount $288.00; the Results section confirms Total Lines 1, Succeeded 1, Failed 0, and links out to the Audit Log and settlement Journal Entry. The Calculation Lines tab (top) holds the per-property fee figures that roll up into this total.

The fee Sales Invoice raised by the run, status Posted, total 288.00, on the PM company's books

One of the run's output documents — the fee Sales Invoice on the property manager's books (Entity Meridian Properties, Customer Continental Holdings). Its Invoice Summary panel shows the green POSTED badge, Total $288.00 and Balance Due $0.00. The run also writes a mirror Purchase Invoice on the landlord's books and a balanced settlement Journal Entry that moves the fee cash between banks.

Reference: the run at a glance

Stage	What you set / see	Result
Configure	Fee terms on the agreement; entity fee defaults; tagged accounts	The run has everything it needs
Period & scope	Start Date, End Date, landlord accounts	Which rent, for whom
Calculate	Collected, Fee Calculated, To Be Billed per property; exclusions	A preview — nothing booked
Post	Invoice Date, Batch Reference	The bill, the cost, and the settlement per landlord
Read	Header status & totals; per-line detail & links	A full audit trail from fee to ledger

Where to go next

Activating a Client Account as a Financial Entity — where the fee products, settlement bank, and operating and escrow accounts are set.
Owner Draws & Owner Statements — the companion owner-side run; the fees you bill here reduce what an owner can draw.
Bank EFT / NACHA Processing — paying fees and settlements electronically.
Property Dimensions in Financial Reports — how fee documents feed property-level profit-and-loss.
How REDA Works with REDA Financials — the whole accounting seam these documents sit inside.

Frequently asked questions

On rent collected — the money actually received on the property in the period. The Billed Amount you see on each line is the fee you've already billed for that property this period, which REDA subtracts so a re-run never double-charges. It's a guard, not an alternate basis, and there's no billed-versus-collected toggle to set.

Yes. REDA subtracts what you've already billed, so a second run bills only the new fee. A property that's fully billed shows a To Be Billed of 0.00 and is excluded with the reason "Zero or negative fee amount". Re-run as often as you need after more rent comes in.

A Fixed agreement bills a flat Management Fee Fixed amount regardless of how much rent was collected, and the minimum and maximum don't apply. A Rent Percentage agreement bills the collected rent times the Management Fee %, then applies the Minimum (a floor) and Maximum (a cap) if they're set.

The preview shows the reason next to it — usually an entity that isn't configured, a missing fee default, a currency mismatch between the two entities, or nothing left to bill after the already-billed subtraction. Fix the setup gap it names, then run again.

Almost always because no rent-income account has been flagged as a property-management account. REDA tells you: "No Property Management GL Accounts found with Type = Revenue. Please flag rent collection GL Accounts as Property Management GL Accounts." Ask your administrator to tag those accounts.

A management fee has to be recorded on both your books and the landlord's, and both must be in the same currency: "The Landlord Entity and PM Entity must have the same Currency ISO Code. Management Fee calculations cannot be performed across different currencies." Align the two entities' currencies and re-run.

The bill (fee revenue) is on your company's books, with the landlord as customer. The cost (fee expense) is on the landlord's books, with your company as vendor. The settlement (a journal entry that moves the fee cash from rent escrow to your operating account) is on your company's books.

Each calculation line links to the invoice lines it produced, and the calculation record links to the settlement entry — so you can trace any fee figure into the ledger and back. The debit-and-credit mechanics behind each document are covered in the REDA Financials help center.

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