Dear New Client
The financial statement called Operating Statement is a summary of all transactions which we have processed against your property account. It consists of dollars received and dollars spent on your behalf.
1. * INCOME * The items under this heading will be revenue collected on your behalf and added to your account. Remember that your account always being with the “Current Cash Balance” left over from the transactions of the previous month. Normally this amount will be 0.00 and hence will have no effect on the month’s transactions. A negative balance will show as bracketed. For example “Current Cash Balance”
($ 123.45). The net result is that this is the amount owing to Attaché - TMS Associates.
2. * EXPENSES * All items under this heading are broken down into the various types of expenses. If we have received a refund for, say, HYDRO it will appear as a negative amount (bracketed). Under this occurrence the amount is added to you account balance instead of being withdrawn. You will receive the original invoice or invoices with your statement, which you must retain for income tax purposes
3. If we pay your mortgage the mortgage payments are separated out from the other expenses, as they cannot be used in total for income tax purposes. As you know, only the interest on your mortgage can be deducted as an income tax expense item.
4. BANK DEPOSIT will always show as a negative amount (bracketed) because this amount is removed from your account and will appear in your bank account as a deposit with a notation to signify that it is the result of rental income.
Financial statements are formulated as per defined bookkeeping practices. The formula for calculating your statement is as follows:
Deduct the total OPERTAING EXPENSES (1) from TOTAL INCOME (2), the result will be your NET INCOME (3) now add the previous months Current Cash Balance, (see previous statement) (6) Then add any OWNERS ADVANCE (4) to this result. Subtract the BANK DEPOSIT (5) and you will come up with the Current Cash Balance (6) which is always the last line of your statement and generally zero.
If for any reason you are still having problems with the statement or you have any other suggestions which you feel will make life easier for you please do not hesitate to call, write, fax or email us your comments. We would be most appreciative to receive them.
The Staff and Management at Attaché-TMS