Trust accounting is a method of accounting wherein cash owned by multiple people is kept "in trust" within a single bank account. When you enter opening balances in Buildium, it's very important to know which property or rental owner owns the money in the bank.
Trust accounting is most commonly used with security deposits; a property manager holds all of their tenant's security deposits within a single bank account.
When setting up your accounts, these two scenarios are common:
If your old system did not track money by property...
One of the great features of Buildium is that it will track balances by property. For example, let's say that Sam Smart owns two properties: 100 Main Street and 265 Beacon Street. You know that Sam has $2000 in the bank in operating funds, but you're not sure how that money is divided between Sam's two properties.
To set up your opening balances, Buildium will ask you to decide how the money is split. We recommend one of the following solutions:
Allocate the money equally. In this case, 100 Main Street gets $1000 and 265 Beacon Street gets $1000.
Allocate all of the money to a single property. For example, 100 Main Street gets $2000 and 265 Beacon gets $0.
Generally, this decision will only impact your first owner draw to Sam. The software will move money within a rental owner's portfolio to cover shortfalls. For example, if 100 Main Street was given all $2000, causing 265 Beacon to go into the red, Buildium will automatically shift funds between these two properties. see "Rental owner draws"
If you're not sure which property owns the money...
If you know that you have $2000 in the bank and you simply don't know who owns it, then allocate the funds to your company books.