Hi,
I’m using the workflow described in the article “Bookkeeping for Landlords – Recording Letting Agent Statements and Fees (Standard Method)”.
For each letting agent statement I create a Sales Invoice containing:
- Rental Income (positive line)
- Letting Agents Fees (negative line, categorised to Letting Agents Fees)
I then record the net payment actually received against the invoice.
Example:
- Rental Income: £1,620.82
- Letting Agents Fee: -£30.00
- Invoice Total: £1,590.82
- Payment Received: £1,590.82
The Invoice Basis P&L reports:
- Rental Income £1,620.82
- Letting Agents Fees £30.00
which appears correct.
However, the Cash Basis P&L reports:
- Rental Income £1,590.82
- Letting Agents Fees £30.00
meaning the fee appears to reduce the income and also be shown as an expense.
Is this the expected behaviour for the Cash Basis P&L, or should the Cash Basis report still show the gross rental income with the letting agent fee reported separately?
Thanks.
Hi QFSteve,
Thanks for your reply.
I believe that is exactly the method I have followed.
My question isn’t about how to record the landlord statements, but about the resulting Cash Basis Project Profit & Lossreport.
Using the Standard Method:
- Rental Income line (positive)
- Letting Agent Fee line (negative)
- Net payment allocated to the invoice
the Invoice Basis report shows:
- Rental Income: £5,020.82
- Letting Agents Fees: £152.40
whereas the Cash Basis report shows:
- Rental Income: £4,868.42
- Letting Agents Fees: £152.40
As the Rental Income on the Cash Basis report already appears to be net of the letting agent fees, the fees also being reported as an expense seems to reduce the profit twice.
Is this the expected behaviour of the Cash Basis report, or should the Cash Basis report also show the gross rental income with the letting agent fees reported separately?
Many thanks.
I have asked the development team to take a look
When I hear back I will post to this thread for you
Hi @MrsRootsGardens
Thank you for your patience with this.
We have had a reply from our development team. The good news is, the Cumulative Update (ITSA) report would have accounted for this correctly. However, when you tested this last week there was an issue with the re-mapping of expense nominals on sales invoices.
It would still have appeared but as a negative amount, and therefore decreased actual expense totals.
We have since fixed this, so this now appears correctly.
Taking invoice #000007 as an example, you have this:
This is split over two nominal codes (Letting Agent Fees as an example, and Rent Income as income), like so -
On your Cumulative Report, you will see the income of £1,700:
And the corresponding negative line appears on the report, too:
This gives the overall net of £1,577.60 (matching the total on the invoice).
So this should now tally up.
However, if you have any questions or queries, please don’t hesitate to reach back out to us and we’ll try our best to assist further.
