Here’s the scenario… “Company A” manages rental property, some owned by Company A and some owned by other business/person. All rental income is received by Company A, and then paid out monthly (minus management expenses) to the business/person that owns the other property. All rental income is collected by credit card through Company A’s merchant account, so it all gets recorded daily as lump sum deposits to the main business checking account. Each daily batch might include rental income that belongs to the Company A for the property they own, and some might be for a different property owned by someone else.
How best to record each income transaction to account for the fact that some is actually rental income, and some is “payable” to another entity? Is it just a matter of creating a liability account and splitting the transaction? Then when a check is written to the other person to disperse their rental income, that would get recorded against the liability account rather than being recorded as an expense?
I don’t want for Company A to record that money as rental income when it’s really not. It is income for another business/person, and Company A is just collecting it and holding for a bit.
Thanks Tut, I’ll look for that example in the guides. I’m trying to keep things as simple as possible. We get at least one credit card batch every day, and I import those from our bank into Manager. Rather than having to edit & split every transaction, I was thinking of waiting until the end of the month and maybe doing a journal entry to remove the proper amount from the Rents Receive income account and move it over to a payable account. Then write checks to those other businesses/people and record those against the payable account. Does that sound like a reasonable solution?
Does the batch come as one lump sum or with renter/properties details. If it comes with details then you can use Bank Rules to allocate the receipts appropriately.
Properties owned by the company would get posted to the P&L and properties owned by others to there respective Special Account.
Each batch is just a lump sum. I could go into our booking system to figure out how each batch breaks out, but that would be a pain in the backside and I’d like to avoid that.
OK, I created a new Balance Sheet control account called “Rents Payable” and grouped it under Liabilities. Then I made a Special Account for each property not owned by the main company. I still think I’d rather do a monthly journal entry for each one, rather than split every daily transaction to remove funds from rental income and allocate to rents payable. I can easily run a monthly report out of our booking system to get the total income for each property.
You don’t need to do a separate Journal for each property, just create a “master” journal which includes all properties. Then you can Clone the last one for the subsequent month - just change the month end date and the property income values.
