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Posting property maintenance

Posted: 04 Feb 2015, 11:29
by Geordie613
Hi, I'm a newbie on here. I'm a newly practicing bookkeeper in Bury, Greater Manchester.

I've got a new client who has a single property. It is managed by a local agent who has provided him with income & expenditure statements.

Income is rental income; in this case two months rent of £350 each. The expenditure is an 8% management fee with VAT, taken by the agent and an invoice for a gas service which has no VAT. The balance is remitted by the agent to my client's current account.

The client does not require, at this stage at least, specialist property management software, and I would like to use SAGE 50 for this task. But I am tearing whatever hair I have left out trying to get my head around this.

Firstly, who is the customer? The managing agent or the tenant? Or is the agent a supplier? Is the gas repairman a supplier, or should I just record it as an invoice from the agent?

Then, when the tenant pays his/her rent, 8% of that goes to the agent, a chunk goes to the gas man and the balance hits my client's 1200 current account. How is this all properly recorded?

I'm sure once I've done it once I'll be able to replicate it. I'm thinking the least complicated, if not easiest way is via an excel batch journal entry of DRs and CRs until everything is balanced.

I would appreciate any input that people may be able to offer, thank you.

Re: Posting property maintenance

Posted: 04 Feb 2015, 12:46
by brucedenney
The Tenant is the customer.
The Agent is a supplier of management services
The Gas company is a supplier

This is how I would do it. (You might find it easier to go in the demo company and actually post an example to follow this through)

Set up a bank account called "Managing Agent"

Enter the rent income into the Managing agent bank account, this could be a BR or a SR depending on if you are issuing invoices to the customer.

Enter the Agents Fees as a supplier invoice and pay it from the Bank account as a SP (or maybe just to a BP)
Do the same with any other deductions.

Then transfer form the Managing Agent Account to the Main Bank account, the amount the agent passed over.

Hope this helps


Bruce
(P.S. My sister live in Bury.)

Re: Posting property maintenance

Posted: 05 Feb 2015, 11:37
by Geordie613
Thank you very much Bruce.

I had to experiment a bit with the nominal codes and and the 'bank account' settings, but I've got it working now and I think everything is showing in the right place.

Many thanks again.
(p.s. Whereabouts? I'm in the Prestwich edge of Bury)

Re: Posting property maintenance

Posted: 05 Feb 2015, 16:33
by brucedenney
She is lives in Whitefield, near Stand golf club.

Re: Posting property maintenance

Posted: 23 Feb 2015, 11:06
by Geordie613
It's been a bit of time, but I'm still dealing with the company mentioned above.

I've received a copy of the previous year's trial balance. It includes a Trade Debtors amount in the debit column of £371.50. I have been told that this is a figure owed to my client by the management company.

I don't know how the previous accountant set up the company. The problem is, the way I have set it up now, is that the management company is a supplier as suggested above. So, when i entered the amount owing, (Tools/Opening balances/Enter opening balances for your suppliers; and under Type I used Credit) it shows up as a debit under N/C 2100 Creditors Control Account.

I'm not sure if this is a major problem, as a negative Creditor is like a Debtor, but I would like it to be uniform and easy for my client to understand.

Could anyone offer me some wisdom please.

Re: Posting property maintenance

Posted: 23 Feb 2015, 11:51
by Geordie613
I'm just thinking... How would it appear if I added that amount as an Uncleared transaction in the bank account created for the Managing Agent? It would show as a debit balance, but obviously not show in Debtors Control.

Re: Posting property maintenance

Posted: 23 Feb 2015, 12:01
by brucedenney
The fact that it appears as a part of Creditors as a negative balance is a minor issue. The major issue is that it still exists. If the management company owe it, they should repay it and it should disappear.

The risk is that this is not money owing, that the Management agency does not acknowledge it and it is bunk or that actually it is a "deposit" that is held by the management company as surety or something.

I would focus on resolving the anomaly rather than how it is showing in the accounts.

The bottom line is that is is an anomaly and if it shows as a negative Creditor rather than a positive Debtor is semantics.