So we have just started out on a real estate agency business. We manage properties on behalf of landlords, including collecting rent and rent deposits. In turn, we receive a percentage commission that we deduct automatically at the end of the month from what we have collected, then send the balance to the respective landlords.
What am wondering is;
How do we pay ourselves in manager? Do we raise an invoice to the landlord then receive a payment into an income account? Or do we simply do a journal entry to an income account? Or perhaps do an inter-account transfer?
How do we pay the landlords, or transfer what we have collected on their behalf to them? Do we simply make a payment? If we do, will not the P&L statement and the BS show negative figures because what we pay is larger than what we receive?
Do any of you have a better way to structure such a business in manager?
Thank you in advance for your kind assistance.