Investment property

[OCPL]

@tony

Mortgage can be set up as a bank account, see - Set up a bank account | Manager

This is confusing to me, as wouldn’t a Bank be in Assets? whereas a mortgage/bank loan should be a Liability, this is where I just can’t visualise how it should all look, and searching for a template or guide.

To expand on this just a little more (and I’d be interested in any comments), as this is a personal investment for negative gearing against my income tax, there would of course be my personal bank account, which receives both my wages from my employer (just happens to be my micro-business) and the rent from the 2x property agents

This personal bank account services all four mortgages (2x properties x 2x bank loans each).

The personal bank also services any other payments like insurance, rates, repairs, etc.

Logically as this personal bank account is also used for everyday expenses (groceries, fuel, etc), I wouldn’t want to keep track of things unrelated to personal spending, nor need to reconcile the bank account (I think).

What would be of value is to be able to keep track of the 4x mortgages (reconcile these) and all expenses related to the property itself, such as to be able to produce a summary report to share with the accountant showing my own workings of the claimable’s.

This may capture the thousands in unclaimed deductions, which I discovered that they missed last time, only at the point of lodgement, instead of month/years later
.
Hope this makes more sense.

[Joe91]

It would make more sense, imho, to include all of your spending - record personal spending with as little or as much detail as you want eg one expense account Personal Spending

That way you can reconcile your bank accounts with the bank statements. This will ensure that you don’t miss any expenses, etc

[tony]

You can set up the loans in the same way as any bank account but instead of linking it to an asset control account you link it to a liability control account.

All personal expenses should be allocated to your capital account.

[OCPL]

Does this look correct?
How are you linking the 4x Mortgage Bank accounts to a Liability control account in Manager?

[Joe91]

See here Add custom control accounts | Manager

These two guides give a good overview of setting up accounts
Design a chart of accounts
Build a chart of accounts

[eko]

I do not think you should create a bank account for each mortgage. A mortgage is a loan and if you want to track them setup special accounts for each.

[Tut]

I agree with @eko. Financially, setting up a loan as a bank account would work, but the features associated with bank accounts are meant to apply to sources of funds. So a liability control account for a credit card is ideal. But you are not going to be disbursing funds from your loan. Those funds were disbursed to you and immediately paid over to the seller of the property when the deals closed.

I believe it will be more convenient to create a special account for each of the loans, all assigned to a liability control account named something like Property mortgages. Or, if you want balance-sheet-level visibility, create a control account for each loan—same difference.

[OCPL]

Thanks Joe, I have been reading these guides, not necessarily comprehending fully though.

Thanks eco & tut, I trashed the 4x bank ac for mortgage and made 4x special accounts.
Should they be debit or credit?
at this point I have no control accounts (haven’t use this before)
Do I need to link the Special Accounts to the Mortgage Loan Payable in Liabilities? if so how is this done?

[eko]

Did you set up a control account for the special accounts in settings? You can setup a control account for each specific Mortgage or just a single one for all of them. You then need to assign the special accounts (edit the special account) to the control account.

[OCPL]

@eko, no I haven’t done that yet, can you please guide me on this step please?

[Joe91]

Add custom control accounts

I would add that Manager is a software tool which you can use to accomplish an objective - in this case how to record and track monetary movements in a business in order to manage the business and submit tax and other returns as required

As with any tool, to gain the maximum benefit it requires an effort to learn how the tool works and how it can be applied to the problem efficently. An alternative route, is to subcontract this work out to competent specialists, if they can be found. The problem with competent specialists, is that they generally charge large amounts of cash for their expertise

While I do not begrudge them the fruits of their expertise and labour, keeping simple accounts is not beyond the ken of most people who only need to be able to add and subtract and to be able to think aboiut things logically. ANyone who runs a business, already has this ability whether they like it or not

[eko]

I am sorry @OCPL that I will not provide more assistance. I thought that you would dig into this and experiment yourself. It is really not difficult and the guides and forum are very clear. Also posts in this topic are clear.

From your longer posts I got the impression that you were learning and interested in learning more but now it feels somehow that you just want some pre-canned blueprint to help with your specific needs.

[clive]

@OCPL I have a very similar set up to your requirements. As I said earlier I have a “Personal Business”, which includes all my personal expenses (whether tax deductible or not), personal bank accounts, mortgages, other loans, credit cards, wages from my company (a separate business).
I have not set up any special accounts - there may be a reason for special accounts but I have not found a need for them.
So in the COA just set up your bank accounts - one each for personal account, savings, and credit cards. Then set up each property as a Fixed Asset. Then each mortgage must be set up as a separate liability.
On the expense side, you can separate personal expenses from property expenses so that, for example, all your expenses for negative gearing can be under the same heading.Do you want something like this?

[OCPL]

Morning, @eco, thanks for your earlier assistance, I think you may have misjudged me for failing to ‘dig in and experiment’, I have actually been working on this for most of the last three days, yesterday alone was 8am-1am, I’ve read the guides, some multiple times over, I’ve cross searched this forum and read discussions now 4-5 years old, I’ve done hours of similar cross searches in Google, YouTube, FaceBook, including FB bookkeeping groups (some groups expressly say no help to business owners), I’ve experimented with different ways on Manager myself, and trying to replicate some of the suggestions.

I’m sorry, I’ve never had to do this task before, I’ve never had the opportunity of being shown how to do this before, nor have I seen the structure setup before, and despite the bits and pieces (breadcrumbs) here and there which may seem blatantly obvious to those with more experience in this area, I have failed to grasp the concept of how this works and remained confused.

The recurring theme I’m hearing seems to be to go ask an accountant, but as I’ve already explained, in my lived experience here, the accountants here will NOT provide this advice, even when offered their hourly rate, instead they are only offering accounting services (as poor as that may be) and also they are strongly recommending ditching Manager for more popular alternatives.
None of this helps me in the slightest, so I’m reaching out here in desperation.

Yes I’d absolutely love to learn how this works, and I do want to understand how it works, I am prepared to work hard, but I need more assistance than just go read a guide which generically touches on one aspect, but does not tie these things together.

Honestly I’d value your ongoing support if you are willing to help.

[OCPL]

@Clive, thanks, I will try out this method too … I just goes to show that there are often many different ways to approach the same problem, and it is good to be able to openly compare and discuss the pros & cons of each way and to find better ways to use the software.

I’m by no means clear in my mind as to how this should look for me, still thrashing in the weeds so to speak, but appreciate any/all assistance.

[clive]

make a mortgage payment

Receive rent

See the changes to original screen

[OCPL]

@lubos Is it possible to get a guide on setup of Bank mortgages / Loans?
I note there are some guides on Bank and Cash accounts in Assets, and a guide on Credit Cards which can be either Asset (as a negative) or Liabilities

[clive]

@OCPL

Is it possible to get a guide on setup of Bank mortgages / Loans?

What more info are you trying to get, on top of the info that we have already given you? Have you tried using a Test business and setting it up ?

[OCPL]

Yes I’ve definitely been reading and experimenting quite a bit.

I’m reasonably proficient with Manager for my main business (virtual supply chain), in it I’ve done everything myself, designed the COA, it has dual currency AUD & USD (both reconciled to the cent), I can do my own BAS & STP, flawlessly … BUT my business doesn’t have/need any Bank Loans / Credit Cards or physical Assets like property or stock, so to date, I’ve not needed to add any of these in.

[clive]

Great , so you are an experienced user - more experienced than me it appears. I cannot provide you with any more assistance than that already given
What is holding you back?