I figure I can record the full rents as always have, income, but how to I apply the rest; repairs and such?
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Record the actual amount received & and deposited.
Issue a Credit memo for any approved rental offset, or expenses
by the renter
While the way SkinnyRaven suggests will get the expenses in the correct GL
account. using the deposit screen.
By issues credit memos - you can track by the rentee or property, the credit or rental offset. Each invoice has a history button that show when and what was credit against the invoice. Plus there are some reports, select credit memos as the transaction. And see what is happening in that area.
A lot depends on what information will help you in managing your properties.
An example, you might find that the paint purchases by renters. is costing you more that what you would spend if you provide the paint. There are many different types, quality, a wide price range. Then again, you might not want to deal with buying the paint. It all depends on what is important to you.
I guess what I'm tripping over is the amount of rents, what really was deposited, and how that all interacts with downloading your bank transactions.
So lets make an example. Lets say the operation grossed $10,000 a month in rents, after repairs and agent fees the agents deposit $8,000 to my account. Now, I download the deposits of $8,000, then get the Owners statement a week or more later, so I then would record another $2,000 in rents, and issue a credit to the Vendors(?)/agents?
At some point I would not mind tracking it all the way down to each unit, but for the time being per agent is fine.
The peace Im having a hard time with is cash flow reporting and reconciling statements. I know reconciling statements I can just check the fake deposit off, however I still have the problem of the cash never really entering of leaving the account. So when issuing a credit is that something I setup with a Item or Class?
I need my P&L, Cash Flow, etc. all to balance out. So I know at all times what cash I really have and where the expense went before I was paid.
First I opened the ACH deposit and added the amount deducted for repairs/fees. Then I setup a customer, lets call it Unit 1, and I then added a invoice to the Vendor (Property Manager), set the customer job as Unit 1 and class [If your using a class] to the Unit as well. After that was completed I paid the bill and the P&L and Cash flow report balanced back out. The only downside to this fee is there will be extra transactions in the process of reconciling the account each month, could create some headaches...
related question -- if owner pays bill directly, notifies property manager so they can assess CAMS to tenants (let's say on a multi-tenant commercial bldg.), but then the property manager includes the owner-paid amount in the property management P&L which then also gets entered into owner's QB when net rent check arrives to owner, how do you fix the entries in QB so the line item doesn't appear to be DOUBLE when running a QB P&L?
You need to have the Check Expense including your fees as payable to the Property Management Firm, because they are acting as your Agent and means the activity is your Vendor Name. The costs are not related to the Tenant, but the Supplier of the goods and services = your manager.
You do this with a Clearing Bank account. Treat the revenue stream as Gross Rent deposit to that Clearing Bank. Use the Clearing Bank to Write Check and Pay the property manager listing their fees and your costs here. Now the Clearing bank has your Net. The real deposit to operating bank is "transfer" from Clearing Bank. Now Clearing Bank = $0, if you did this correctly.
Here's a mistake: "...but then the property manager includes the owner-paid amount in the property management P&L"
Anything this Property Manager is doing for other people's property is not supposed to hit their own P&L. The Rent is a Liability for the Property Management firm; any Costs paid for on those properties is Advance Costs as Other Current Asset, to be "repaid" from the owners either as New funds or by reducing the Collected Rent that is sent to the owner. The Amount sent to the owner would be:
Gross Rent, reducing the liability
Negative holdback for amounts owed to the Property manager
= Net Payout
And the Other Current Asset advanced costs for Plumbing repairs, etc, are invoices, which clears the Other Current Asset account. The only Income item here is the Management Fee. The only Expense incurred by the property manager is what they contract to cover under the terms of their Management Fee, such as "We pay for all yard care, snow removal, and parking lot striping."
"which then also gets entered into owner's QB when net rent check arrives to owner, how do you fix the entries in QB so the line item doesn't appear to be DOUBLE when running a QB P&L?"
There should never be double-anything. That is always an indication something either is entered twice, or is in the wrong place. Example: Using the credit card means the Credit Card Charge Expense details are already entered; the payment against the card is against that CC type of account in QB and never lists the spending details, here, because that would be Twice the office supplies.
So is the most efficient method as a landlord using an agent to manage the property to use a zero balance account (zba)? I set up automatic memorized monthly invoicing to track rent receivable from prop mgt firm. However, I used 'items' such as mgt fee, plumbing repairs, electrical repairs, as offsets in the invoice to get to the net deposit. It created P&L problems. Example: $1000 rent, $100 mgt fee, $50 repair expense. If I only collected 3 months of rent, the P&L still showed 12 months, or $1200, total for mgt fee expense using cash basis reporting (I don't understand why). Other problem is if 1099 is needed for prop mgt, 1099s don't work for customers (obviously, after the fact for me).
So, is the most efficient and accurate method to use memorized invoice for the gross rent amount, $1000, to the zba, memorized mgt expense $100 to the zba, and pay (false) checks for various repairs from the zba, then transfer the net check amount, $850 in the example, to the actual bank account? Uncertain about using false qb checks, or potential issues such as "To Be Printed" as I only use a checkbook. Need to learn more.
One other twist. Prop mgt retains a min cash balance for repairs, say $200. Easier to manage that in a separate account or use the ZBA account (no longer $0, now it would be $200)?
Quite a bit to do for one seemingly simple check deposit. On cash basis, manage a few rentals.
Thank you in advance.