I let out a property for £530 pcm
This is through an agent who charges me £35 pcm.
I therefore receive a payment from the agent of £495 pcm into my bank.
Option 1:
I can create an invoice monthly for the rent as follows:
Nominal Rent Incom: rent for property £530.
Nominal Ren income: Minus agent fee -£35.
Total invoice £495
Then tag my bank payment received to that.
The issue i see is that it artificially shows my rental income as less and my agent fees as £0.
When i put in a line on the invoice, i can only choose a few categories as a minus figure.
How do i do this so i can show an invoice for the rent as rental income, and then agent fees? i only receive one payment into my bank but id rather account for it properly
Do i somehow create one invoice for the rent as sales, one invoice for the agent as purchases, then somehow link them together with the £495 payment?
Yes, there’s an article in the knowledge base about contra invoicing (which is essentially what’s happening in this situation) - you use another bank account in QuickFile to log payment in full on both the rent invoice and the agent fees purchase, then the money you receive from the agent is treated as a bank transfer.
Another way may be to use a holding account. There is a guide for letting agents here: Bookkeeping for Letting Agents which you may be able to adjust to suit your needs?
I get charged a fee of £35 per month from the agent.
at one point, the agent has sent me a refund of £105 for 3x months of their fees.
i couldnt class this as a refund though it wouldnt let me.
what i had to do was change 3 separate monthly fees into one to make that £105, then issue a refund to that.
what would have been a better was of treating the £105 refund?
Sorry, I could have sworn it was there somewhere. Anyway, the principle is very simple - create a new “bank account” in QuickFile called something like “Contra invoicing holding account”. Now whenever you have one of these payments to process you create:
a sales invoice for £530 for the incoming rent
a purchase for £35 for the outgoing commission
both of these could be done using the recurring invoice/purchase mechanism if they’re the same every month. When the £495 payment lands in your current account, tag that as a bank transfer from the contra account, and then at the same time log payments in full on both the invoice and the purchase against the same contra bank account. The net result is that both the invoice and purchase show as fully paid, the £495 in your current account is tagged, and the contra account balance is zero.
You can create a new “purchase” for minus £105, which becomes an ad hoc credit note not attached to the original purchases. Alternatively if you want to maintain the full audit trail then you could credit the three original purchases separately into the contra bank account, then tag the £105 money in on your current account as a transfer from there.
you can create a new “purchase” for minus £105, which becomes an ad hoc credit note not attached to the original purchases
what do you do next?
Alternatively if you want to maintain the full audit trail then you could credit the three original purchases separately into the contra bank account, then tag the £105 money in on your current account as a transfer from there.
when crediting them, how do you do that bit where you credit it to the contra account?
There is no “next” - when you save an ad hoc credit note it will prompt you which bank account to refund to, and it will create a pre-tagged money in transaction on the selected account at the date of the credit note. If you have an untagged duplicate transaction that came from a bank feed then you can just delete that.
In this case because you’re creating a credit note derived from an existing purchase it will give you the choice to refund or to hold the funds on account for use against future purchases - select the refund option, and choose the contra bank account, and again it will create a pre-tagged money in transaction on there, there’s nothing further you need to do.