How to Refund Management Fees

Modified on Thu, 19 Mar at 1:48 AM

Method A: Agency Management Fee Refund from General Account

This method involves physically transferring funds from the agency’s general bank account to the trust account and receipting them in Cirrus8.

Step 1: Transfer Funds to Trust Account

Transfer the management fee refund amount from the agency general account to the trust account.

Step 2: Receipt Funds in Cirrus8 as a Supplier Refund

Navigate to Accounts Receivable > Receipts
Select Method as Property: Select Clearing Property from the drop-down menu
Lease/Debtor: Select MISC
Direct Deposit Name, Receipt Date, @Bank Date, Amount: Enter these details as per the trust bank statement
Click Add Credit / Sundry Receipts
Account Code: Select the Income Management Fee Code equivalent to the original Management Fee Expense Code
Description: Enter the relevant description as required e.g. Management Fee Refund - JUN 2025 [Property]
From Date and To Date: Enter the period the management fee refund applies to
Tick Sundry Receipt
Tax Rate: Same as original expense
Enter the refund amount in the Amount field
Click Add
Click Process Receipt

Step 3: Journal Funds from Clearing Property to Target Property

Always use the Management Fee - Adjustment account code

Go to Accounts Payable > Transfer Journals
Supplier: Select your agency company
Transaction Date: Date funds were received as per the bank statement

Transfer Expense From:

Property: Property entitled to refund
Account: Management Fee Adjustment Code e.g. 4672, 5672 or 6672 - see article: Understanding Management Fee Adjustment Codes
Description: e.g. Management Fee Refund – JUN 2025
Dates: Enter the dates the management fee refund period relates to
Gross Amount: Management fee refund amount
Tax Rate: Select the Tax Rate as per the original management fee expense

Transfer Expense To:

Property: Clearing Property
Account: Same as above
Description: Same as above
Tax Rate: Same as above
Click Process

Step 4: If the Management Fee Was Directly Recoverable

If the management fee that was refunded was a directly recoverable expense, then the lease that the management fee was originally paid by would need to receive a management fee credit.

Raise a management fee credit to the relevant tenant using the directly recoverable management fee income code e.g. 3671. See article: Create an Accounts Receivable Invoice and Credit
Leave the funds in the property for the tenant to:
- Request a refund, or
- Apply to another charge on the tenant's account

Method B: Raise a Management Fee Credit (Manual Agent Invoice)

This method creates a management fee credit that can be applied to future management fee charges.

Step 1: Raise the Management Fee Credit

Go to Accounts Payable > Invoices & Credits
Supplier: Select your Agent Company
Tick the Create Agent Invoice box. This will automatically allocate a tax invoice number when raised
Bank Details: Choose the bank details to appear on the PDF invoice from the drop-down
Enter the Invoice Date
Transaction Type: Credit
Select the Property entitled to the management fee refund
Account Code: Select the relevant Management Fee Adjustment Code e.g. 4672, 5672 or 6672 - see article: Understanding Management Fee Adjustment Codes
Enter the From Date, To Date and Due Date
Tax Rate: Select the tax rate as per the owner's tax status
Enter the Gross Amount as the management fee refund amount
Click Process
Click Complete

Step 2: Apply the Credit

Apply the credit to a future management fee charge when it arises via:

Accounts Payable > Credit Allocations
Select your Agent Company as the Supplier
Locate the relevant management fee credit transaction and click allocate against this transaction line
Enter the amount of credit to apply to the charge
Click allocate

Step 3: If the Management Fee Was Directly Recoverable