How to Keep Management Fees and Sinking Funds Clearly Separated

For MCSTs and managing agents, keeping management fees and sinking funds separate is critical for compliance and transparency. When these two are mixed, it can cause reporting confusion, inaccurate budgeting, and even regulatory issues. The good news: with a structured system, you can keep them clearly organized—without doubling your admin workload.

Here’s how to do it effectively:

1. Use Dedicated Accounts for Each Fund

The simplest but most important step: maintain separate accounts for management fees and sinking funds.

• Management fees cover daily operations—cleaning, security, maintenance contracts.
• Sinking funds are for long-term capital works—painting, lift replacement, or roof repairs.

With ccMonet, you can:

• Tag each transaction to the correct account automatically.
• Prevent cross-posting errors by using pre-defined chart-of-account categories.
• Generate separate statements for both funds instantly.

Result: No risk of overlap, and both funds remain audit-ready.

2. Automate Fee Collection and Allocation

Instead of manually sorting incoming payments, automation can allocate funds directly based on payment type or amount split.

With ccMonet:

• Set allocation rules (e.g., 70% to management fund, 30% to sinking fund).
• Auto-apply receipts to the correct account upon payment.
• Track overdue balances for each fund independently.

Result: Payments are organized from day one—no manual sorting or reconciliation later.

3. Separate Reporting and Budgeting

Keep financial tracking distinct for both funds to maintain clarity during audits and AGMs.

Using ccMonet’s dashboards, you can:

• View monthly expenses and balances per fund.
• Compare management vs. sinking fund health side by side.
• Export fund-specific reports instantly for council reviews.

Result: Every fund’s usage and balance is transparent and easy to explain to owners.

4. Link Work Orders and Expenses to the Right Fund

Avoid confusion over which fund pays for what by tagging all supplier invoices and work orders to their respective funds.

With ccMonet, MCST teams can:

• Assign fund tags when creating a work order.
• Auto-match vendor invoices to the correct fund.
• Review fund utilization in real time.

Result: Each repair, upgrade, or expense is correctly tied to its budget source.

Conclusion: Clear Boundaries, Clean Books

Keeping management fees and sinking funds separated doesn’t need to be complicated.
With automation and clear tagging through ccMonet, MCST and managing agent teams can maintain accurate, transparent records—ensuring compliance and clarity for every owner and audit.

Stay organized, stay compliant — simplify fund management with ccMonet.

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