I have a few questions on how to account for several items in Quickfile to which I have not been able to find an answer on the forum.
We are using Quickfile to run the administration of the finances of a Block of 6 flats which has been set up as a LTD Residential Management Company on Companies House and of which (beside being a flat owner and consequently a customer from Quickfile point of view) I act as the Secretary.
We opened our own Bank Account uploading the statements on Quickfile on a regular basis.
We overtook the management of our freehold block and dismissed the previous Managing Agent.
The previous Managing Agents have transferred to our new Bank Account the accrued Service Charge monies which was previously paid into their Bank Account (held in Trust for our Block of flats) and which belong to our Company.
We now have a transaction, basically a transfer of our own monies, which we do not know how to account for (Tag) as it is not invoiceable.
It cannot be allocated to the Bank Reserve Account as it will be in red.
It cannot be allocated to a Directors Loan as it is not a Directors Loan.
Manual Adjustment maybe?
We have naively paid 5 invoices to a Gardener in one single payment instead of a payment for each invoice. How to allocate those five invoices to the single payment in order to Tag it?
A Director have mistakenly used this account to pay for personal items and refunded the amount to himself.
I have allocated it as Directors Loan and Refund to Directors Loan and allocated it to the Directors Loan Account in order to bypass an invoice.
A Director have refunded himself £13 for payment to Companies House made with his personal private Bank Account. How do I Tag this?
Please be aware that Directors and Secretary and other flat owners are “customers”, from the point of view of Quickfile, even if in actual fact are Flat owners, Shareholders of the Company.
Thank you for your help.
I can’t help with the first question but I’ll try the others:
If you’re starting from an untagged bank transaction then tag as payment to a supplier, “pay down multiple invoices”, enter the supplier name and you should be able to select the five invoices for the one payment. If you’re not using a bank feed then go to the supplier summary page for the gardener, view all their purchases, then tick the ones you want and there should be an option at the top to pay them all in one payment.
That sounds exactly right to me - the director borrowed some money from the company and subsequently paid it back. Exactly what they used the borrowed money for is not relevant to the company’s accounts, it’s simply a loan taken and then repaid.
Good question, I’d wait for one of the accountants on here to chime in as I’m not sure what’s the status of incorporation costs - can they be an expense of the company when the company doesn’t exist prior to incorporation?
You need to be very careful that you keep the “service charge accounts” separate from the company’s statutory accounts. The money transferred to you as you rightly say is held on Trust by the company, on behalf of the leaseholders. It therefore doesn’t belong to the company, and shouldn’t be included in their accounts. Generally speaking, the accounts filed at Companies House will contain very little, and may even be dormant.
The service charge accounts will show the monies held in trust, the receipt of service charges each year, and the costs which have been incurred on the maintenance of the building. This is where the monies transferred should be shown.
There is no set format or reporting standard for service charge accounts, but there is a technical release (03/11) drawn up by the accounting bodies in conjunction with RICS. It is worth having a read of that before you start. Here’s the link to the ICAEW version - hopefully you can access it as a non-member. https://www.icaew.com/-/media/corporate/files/technical/technical-releases/legal-and-regulatory/tech-03-11-residential-service-charge-accounts.ashx
thank you for your answer and for the link.
I think you misunderstood the bodies involved and therefore my first and fourth questions have not been answered.
We are not a Managing Agent with its own Company name and number “MMAA” which keeps someone else’s monies (ie: Leaseholders of a Block of Flats named XXXX) in a dedicated Bank Account in the name of MMAA but held in Trust for XXXX.
We are a Right to Manage Company KKKK named after the Block of flats KKKK formed by our own Shareholder/Leaseholders which accounts for our own monies held in our own Bank Account named KKKK. Therefore technically Service Charge monies belong to both the Company KKKK and its Shareholders/Leaseholders.
My questions was how to account in QuickFile for a repaiment of funds received from MMAA. Funds belonging to KKKK but held by MMAA for us in Trust, until we requested them back,
Yes, we do know that Service Charge monies must be accounted for separately from the Company Statutory Accounts, however the past Accounts filed on Companies House are showing Assets (Cash at Bank), Creditors, Debtors, Capital and Reserves (which include our own Share of Capital of the Company) as being taken form the Balance Sheet produced by the previous Managing Agents MMMAAA
We are using QuickFile right for that purpose IE: accounting for Service Charge income and expenditure and relative invoices allocated and tagged, and have a Balance Sheet at the end of every financial year which will be passed on to the Leasehoders/Shareholders and the Accountant for preparing and filing accounts.
I suggest you actually read Technical Release 03/11 - below is the excerpt relating to service charge monies in the hands of Right to Manage Companies (RTMCo)
“1.2.1 Where the landlord is an RMC or RTMCo or similar, service charge monies are subject to a statutory trust. Trust monies do not belong to the RMC/RTMCo amd so should not be included as an asset in the statutory accounts of the RMC/RTMCo”
The previous accountants may well have included them, and other assets, in the statutory accounts, but this does not mean it is correct. I suggest you take advice from an accountant with experience of these type of accounts.
Service charge monies do not belong to company KKKK, but only to the leaseholders. If you are preparing service charge accounts for the funds (not statutory accounts for KKKK Ltd) using QF, then you recognise the monies transferred in as Leaseholder Funds or General Reserve -whatever you are calling the service charge fund. But they are not company funds and you cannot include them in the statutory accounts for the RTMCo statutory accounts.
Mamaging agents are not usually accountants (although some are) and usually do not understand the intricacies of preparing both service charge statements and statutory RTMCo accounts.
In regards to Q4, any transactions between directors and the company are tagged to the directors loan account. I assume the £13 is the annual filing fee, so is correctly a transaction in the limited company’s accounts, not the service charge accounts.
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