Introduction

Mohamed Hussein, Frisco Miranda, Tyler Guthrie, Todd Smith

Presentation Team

Approximately 1 hour

Webinar Length

AppFolio Year-End Success!

Content

Agenda

1 Understand AppFolio End-of-Year

2 Review & Update Information

3 Report & Prepare to Close the Books

4 Answer FAQ’s

Please ask questions anytime!

Use the Questions section

of the GoToWebinar panel

On right of desktop

FAQ:

• Is this Webinar being

recorded, will I be able

to watch it again

later?

• More FAQ’s Later in

the Presentation

• Yes! This is being recorded and everyone will

receive a follow up email tomorrow with a link

to the recording.

• Please feel free to share the link with anyone in

your organization who could benefit from this

information.

Polling Feedback

What Actions Have You Taken to Prepare for Year-End?

• Checked Tax Settings for Owners, Vendors and PM Company

• Reviewed my GL Accounts for 1099 Reporting

• Reviewed Properties for Ownership & Who Pays Vendor 1099’s

• Run Financial Reports to Verify Owner Income & Expenses

• Nothing Yet

What Happens at Year-End?

At the end of the year AppFolio will automatically close the books and return

revenue and expense account balances to zero in order to start the new year.

• Starting with zero balances in the revenue and expense accounts each year

enables you to track revenues, expenses, and withdrawals and compare them

year-to-year

• This will be done after the month chosen as the “Fiscal Year End” on the property

page.

As part of the automatic closing process AppFolio:

• Closes the revenue and expense accounts to zero ($0.00)

• All revenue and expense accounts are closed into an account/line item called

Calculated Prior Year Retained Earnings on Trial Balance and Balance Sheet

Reports showing the profit or loss of the operating activities

How AppFolio Calculates 1099’s

• Based on Gross Income

(not Net)

• Does not take into

account Expenses or

Owner Disbursements

• Can mark GL account as

exempt from 1099 if not

taxable

• Can adjust filter setting

for minimum income for

Owner

Suppressed Fees & Vendor Adjustments

Suppressed Fees: How suppressed fees will show on

cash flow if not zeroed out in the same month:

• Should be paid by end-of-month to show net change of 0.00 in

GL accounts. If they have not been paid out each month, they

will show on 12-Month Cash Flow and Cash Flow reports

• Can be marked as exempt from 1099 reporting

Vendor Adjustments: How Vendor Discounts/Markups

will reflect on Cash Flow:

• Vendor Discounts and Markups will display on Cash Flow

reports

• Reminder: Additional Fees and Vendor Discounts/Markups are

only suppressed from the Owner Statement

Manage Mid-Year Migrations for 1099 Reporting

• For Owners: Ensure prior

income and expense was

brought into AppFolio;

otherwise the 1099 will

need to be done in the old

system and AppFolio

(prior and AppFolio)

• For Vendors: If the

vendor 1099 is paid by

owner or portfolio, it will

need to be done from

both systems (prior and

AppFolio)

Ensure Data is Accurate

• Vendor & Owner Tax Settings

• Property Management Company Tax Settings

• GL Accounts for 1099 Reporting

• Who Pays Vendor 1099

• Verify Ownership

Vendor & Owner Tax Settings

Need to verify and if needed

update information on Owner

and Vendor Record Pages:

• Taxpayer Name

• Taxpayer ID

• Send 1099? - Checked

• For Vendors:

• If paid by the management company you will want to ensure balance forward financial information is brought it into the system (not applicable if paid by owner or portfolio)

• Only if went live this year –you will need to use both systems if you migrated to AppFolio mid-year

Property Management Co. Tax Settings

Ensure accurate company tax

information is set on the

Company Settings Page:

• Company Phone Number

• Taxpayer Name

• Taxpayer ID

• Transmitter Control Code (for

FIRE file only) (instructions

for obtaining this can be

found here)

• Contact Name (for FIRE file

only)

• Access by going to Settings in the top

menu bar, and selecting Company

Settings

• Access to these settings are

managed by user roles

Ensure Accounts in 1099 Reporting

• Verify that all accounts to be

included in the owners taxes

are not set to be 'Exempt from

1099 reporting’

• Functionality is found in

Accounting > GL Accounts

• Please note that access to this

functionality is managed by

login permissions

• Account names and numbers

can be edited here if

necessary

Update 1099 Vendor Payer on Properties

• Setting is configured on

the Property Page in the

“Owners and Financials”

section

• Can be set as either the

management company,

the property owner, or the

portfolio owner

• If 1099 Payer is set to be the

owner, you will see multiple

1099s for some vendors

Verify Ownership

If you have had any mid-year

ownership changes:

• Balances are attached to the

Property, not the owner, so

simply “changing owner

name/info” on property will

not transfer balances

• Ensure that you use the “New

Ownership” Feature to

accurately represent an

ownership change throughout

the year and to properly

report 1099 figures (if you

need the ownership effective

date changed, please contact

support@appfolio.com)

Reporting & Data Verification Process

Report, Re-verify, & Repeat Till Accurate

Rerun reports and re-verify all data is accurate

Clean up Data as Needed

Update Owner, Vendor Settings & Financial Data as Needed

Run Reports & Verify Data

Owner, Vendor & Financial Data

1

2

3

Reports to Verify Financial Information

• There are three reports that can help understand the

tax situation:

• December Cash Flow Report (includes YTD totals)

• 12 Month Cash Flow Report

• The “Cash Flow” and “Cash Flow – 12 Month” report

provide owners with complete amounts for income and

expenses

• Use the filter options to run the report by Property, Group,

Portfolio or Owner

• Be sure to “Show All Properties” to ensure you are also

reporting on any properties that may be hidden

1

Use “Send Owner Packet” Process

Use “Send Owner Packet” to

run for all owners at once

1.Select desired date range

2.Leave Owner and

Properties selection blank

3.Select to “Show All

Properties”

4.Select desired report

5.Click Search

6.Click “Preview” links on

results, then print the PDF

1

2

3

45

6

1

Ownership Changes – Sending Owner Packets

• Because AppFolio reporting is property based, the “Send Owner Packets”

function will not reflect ownership changes that happened throughout the

year.

• You will need to send reports individually to any owners involved in an

ownership change in order to provide accurate figures.

• Creating a property group for all properties that did not go through a change

in ownership will allow you to use the “Send Owner Packets” function for

these properties.

1

Reports to Verify Owner & Vendor Info• Owner and Vendor 1099

Summary Reports

• Reporting Tab > Tasks “1099s,”

Reports section on next page

• Reports may include hidden

owners and vendors with activity in

the current processing year

• Review for completeness and

accuracy

• Check for missing Tax ID numbers

(these are required by the IRS)

• Check for missing addresses

• Validate the send 1099 flag

(vendors)

• If inaccuracies are found, update

information and refresh report

1

How to Account for all Properties (Inc. Hidden)

• Ensure report filter is set

to “Show All Properties”

• Filter can be adjusted by

clicking the Filter button

at top of report page

1

Make Adjustments & Re-Verify

• Make any needed

updates to add missing

or incorrect information

2

Rerun Reports for Owners & Venders

Rerun reports again to ensure

everything is correct

• For Financials:

• December Cash Flow Report

(includes YTD totals)

• 12 Month Cash Flow Report

• Owner and Vendor

Information

• Reporting Tab > Tasks “1099s,”

Reports section on next page

• Reports may include hidden

owners and vendors with

activity in the current processing

year

3

FAQ:

• Why doesn’t my 1099

match my Cash

Flow/Income

Statement?

• Make sure that you have selected “Show All Properties” on your Cash Flow versus “Show Active Properties”.

• If you have changed ownership at the property, make sure you filter the Cash Flow report for that property for the appropriate date range.

• Remember that some income accounts may be exempt from 1099 reporting, and you will need to add Prepaid Rent to all income not exempt to find the total amount on your 1099.

FAQ:

• Why are there multiple

1099s for some of my

vendors?

• In the “Owners and Financials” section of

each property’s page, there is the option to

specify the owner or management company

as the “Vendor 1099 Payer”.

• If each property lists the management

company here, each vendor will receive one

1099.

• However, if owners are listed as the vendor

payer on some properties, the vendor will

receive a 1099 for each of these owners as

well.

FAQ:

• I began using

AppFolio midway

through the year. How

can I edit the amount

generated by the

system?

• You cannot edit the amount on 1099s

generated through AppFolio.

• Best practice is to send one 1099 from

AppFolio and one from your previous

solution.

FAQ:

• Why am I seeing

suppressed GL

accounts like

Application Fees and

Late Fees on my Cash

Flow report? Are

those included in

1099s?

• Suppression only affects the Owner Statement, the Cash Flow shows all GL accounts that have activity.

• The amount displayed should be zero if these fees are accurately collected by the management company, and a zero balance will not affect the owner’s 1099 balance.

• If you have not yet paid out all of these fees and you see a balance on your financial reports, you can mark the accounts as Exempt from 1099 Reporting to ensure that your owners are not taxed.

FAQ:

• What do you mean by

zeroing out income

and expense

automatically?

• That means that those accounts are reset to a

$0 balance at the end of the year and the

funds in them rolled onto Calculated Prior Year

Retained Earnings line item on the Trial

Balance and Balance Sheet Reports.

FAQ:

• Do I have to file by e-

File and if so, how do I

obtain a transmitter

control code?

• The IRS requires anyone submitting more

than 250 forms to submit by e-File (FIRE

file)

• The Transmitter Code (TCC) must be

requested by the IRS at www.IRS.gov

• Approval can take up to six weeks so don’t

wait

• Will also need to setup account with the

FIRE file system at www.fire.irs.gov

Summary

1 Understand AppFolio End-of-Year

2 Review & Update Information

3 Report & Prepare to Close the Books

4 Answer FAQ’s

Polling Feedback

When will you prepare for End-of-Year?

• Will Get Started Right Away

• By End of November

• By Mid December

• By End of December

• Not Sure

Tips for Success

• Start Early: Don’t wait till you are right up against due

dates to begin the process, this will lead to heightened

stress and mistakes. Begin when you still have plenty of

time and you will then be able to work through any issues

without excessive stress.

• Set Aside Dedicated Time: Don’t try to manage your end

of year activities while also trying to handle your day to day

responsibilities. Inevitably you will get distracted and

frustrated making the process more difficult.

• Report Early to Owners & Vendors: Send owners’ and

vendors’ “draft” versions of reports to have them review for

any issues, questions or concerns to avoid last minute

changes and stress during 1099 reporting.

Who do I contact about Accounting Questions?

Please contact an Accountant

or CPA

Action Checklist

Action

Start Now – Don’t Wait, Time Flies! ☐

Run Owner & Vendor Summary Reports – Review for Missing/Wrong Info ☐

Add/Fix Info– Tax Information on People & Property Management Co. ☐

Run and Review Financial Reports

• Cash Flow Report for December

• 12 Month Cash Flow Report

• Year End Owner Statements

☐

Add/Fix Info– Financial Information in Income & Expenses ☐

Run, Print and Mail Draft Owner’s & Vendor’s Reports ☐

Relax and Enjoy the Holiday’s, Knowing you are Prepared for Year-End! ☐

More Info:

Search “1099”

help.appfolio.com