Category for funds held by maintenance company for future repairs

Can someone please suggest how they would categorise a payment to a property lease management company which will be held by them to undertake future repairs?

The payment for the reserve is collected along with regular service charges and appears as one of the items on the management company’s semi-annual invoice. These repairs are likely to take place more than 2 years after the reserve payment, thus the funds will be held for a number of years. I am erring on the side of creating a new asset category and choosing ‘Property’ as the sub category. This is because I will not depreciate the asset and do not consider it to be a short term asset. The other sub-categories do not seem to fit. Choosing ‘Debtors’ presumably creates a new system account, as I cannot select that category from the drop-down when creating a new purchase.

Thank you in anticipation of your advice.

You are correct, although it would be better to set up a ‘New Holding Bank Account’ called ‘[Enter Property Management Name] - Repair Reserves’:

Payment to Property Lease Management Company:

Simply, tag any funds transferred/refunded to/from your Bank Account to/from the property management company as a transfer to/from the new holding account:

Deductions by the Property Lease Management Company for Repairs:

If you receive an invoice or statement from the management company showing any deductions from the repair reserves to undertake repairs, log the amount as a new purchase under the category ‘Repairs and Renewals’ and pay the invoice from the new holding account.

See the example below:

The new holding account, will now show on the Balance Sheet as an asset and you will be able to keep track of the repair reserve funds held as well obtaining detailed statements of charges made for repairs.

Thank you, Joe. I considered creating a bank account, although rather liked the idea that when categorising as property the asset appears at the top of the balance sheet. The immediate visual effect of pulling up a balance sheet snapshot with longer term assets appearing at the top might make more sense to clients not familiar with accounting processes. I am not sure which way to go - but it probably does not matter too much.