I’ve read the article on Bookkeeping for Letting Agents, and note the instructions on transferring receipts to the Loan / Property Holding Account. However my receipts are already tagged against rent Invoices sent to tenants. It is therefore not allowing me to tag these receipts as transfers to the Property Holding Account. Any ideas how can I achieve this? Surely it must be possible to keep track of rents due/received from various properties, and be able to allocate them to the correct Landlord via the Property Holding Account system?
Of course it’s possible. But if you’ve done it another way to begin with then you’ll either need to untag everything and do it the other way or start from now.
From your post it sounds as if you want to do it both ways which isn’t going to work.
If I untag the receipt for the invoices, will the invoices then show as being unpaid / outstanding?
I don’t know. Maybe best to wait for admin to reply.
The article you’re referring to is written on the basis that you don’t send QuickFile-generated invoices to the tenants for their rent, as the rent payments are not considered to be your sales - you’re just acting as a middle-man receiving rent from tenants, charging fees to your landlords, and paying them the net. The only bit that counts as turnover for you is the fees you charge to the landlord.
You can adapt the procedure in that guide to work for your case:
- create a holding bank account for each property or landlord
- find each of the holding accounts in the “chart of accounts” view, edit its settings and tick the box to allow the account to be used on sales invoices
Now when you create an “invoice” to the tenant for their rent you can use the cog wheel icon to set the invoice line to the relevant property holding account instead of “general sales” (and if you’re VAT registered then mark the invoice as “out of scope”). This should immediately appear as “money out” on the holding account as soon as you create the invoice. The corresponding debit is on the debtors control account, and when you receive the rent payment that will balance out on there (this is the difference from the procedure in the article - working this way your holding account shows the rent when it is due, not necessarily when it was paid).
The rest of the procedure is then the same as in the guide - your fees to the landlord are a (true) sales invoice which is paid into the holding account, leaving the account overdrawn by the net amount due to the landlord, and your actual settlement payment to the landlord is then just a bank transfer from your current account to the holding account to return it to zero.
Many thanks for the helpful info Ian, very much appreciated.
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