$800 rent,

   $80 mgt fee,

   $20 (haha) repair expense,

   $200 balance retained by property mgt co.

(1) Create memorized, Prop Mgt Co_customer rent receivable using rent income item for $800.

(2) Record a GROSS rent payment $800 by the Prop Mgt customer and post against the invoice depositing and deposit to Undeposited Funds on the Customer Payments window.

(3) Create a Petty Cash bank account.  In the Banking Deposit window, select the pmt, then deposit to Deposit $800 gross check to Petty Cash bank account, select your bank account on the Cash Back Goes To box and enter the net check amount, $700 ($800-$80-$20).

(4) Create Prop Mgt Co_vendor.  Use Petty Cash bank account register and pay $80 mgt fee and $20 repair fee to Prop Mgt Co_vendor, which nets out the $100 deposit and leaves the $200 petty cash balance (assuming it started with $200).

(5) If ending Petty Cash balance reported by Prop Mgt Co differs from Petty Cash account, verify and enter additional payment to Prop Mgt Co_vendor so ending balance matches Prop Mgt Co reported ending Petty Cash balance, $200.

Questions:

(1) Is the approach descibed above the best and most efficient method to account for a net check received from a property management company (or other similar business situations)?

(2) Any cautions/suggestions about having one company as both as customer and vendor (_c and _v)?

(3) Why does a negative amount entered in an invoice shows up on a cash basis P&L when there has been no pmt applied to the invoice?  Mgt fee appears in both the Rent income line and Mgt Fee expense line on the cash basis P&L.  Maybe this is an improper way to use invoices.