Cash Basis P&L appears to double count letting agent fees using the new landlord workflow

Accounting
1

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.

2

Hello @MrsRootsGardens

The process of recording rent and paying agent should be recorded as per the below articles

Bookkeeping for Landlords - Recording Letting Agent Statements and Fees (Standard Method)

Bookkeeping for Landlords - Recording Letting Agent Statement and Fees (Alternative Method)

3

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.

6

I have asked the development team to take a look

When I hear back I will post to this thread for you