Not exactly. If using QuickBooks in which you can assign a transaction
to a vendor/customer, I don't have to create invoices and bills just for
the sake of tracking the payment sources and targets. So the workflow
does depend on the tool you are using...
On 9/25/23 4:08 PM, Adrien Monteleone wrote:
This is an accounting question more than a GnuCash question, but I did
notice something that trying to do this in GnuCash, may help with the
caveat that you need to discuss this with a local CPA. This is not
accounting advice, but a starting point for questions to ask the CPA.
I'll make inline notations below, but with Debit(Dr.) & Credit (Cr.)
labels as those are more traditional and easier to follow, especially
using GnuCash.
Regards,
Adrien
On 9/22/23 1:36 PM, Jediator wrote:
Dear GC users,
I am trying to set up GC for a small property management business.
There are three actors involved: Renter, Property Owner, and
Property Manager. Renter pays rent on a monthly basis to property
management, and the manager pays the property owner after taking out
certain percentage of management fee. Here is the workflow I came up
with:
Renter(Customer) --> Invoice --> Accounts Receivable
This should be:
Dr. Assets:Accounts Receivable
Cr. Income:Rent
Rent Payment ---------------> PM Escrow (Income Account)
------------------
Usually you'd involve a bank or cash account here and AR, but since
you have a pass-through collector for you (the property manager),
you'd use an intermediary asset account, perhaps:
Dr. Assets:PM Escrow
Cr. Assets:Accounts Receivable
This credits the Renter's AR balance due and shifts your asset from AR
to the funds being held by the Property Manager. (which at this point,
would be a liability on their books)
Think of that similar to a bank account. The funds are legally yours,
but you don't physically possess/control them. (yet)
Check to Owner
Issued↓
Owner(Vendor) ------> Bill -------> Acct Payable (Rental
Passthrough) ------> Rent Passthrough (Expense Acct)
| (split)↓
-----------> Acct Payable (Commission)
--------------> PM Commission (Income Acct)
If you know the commission in advance, I'd create vendor bill as soon
as possible. (maybe the same time as the rental invoice)
That bill would look like:
Dr. Expenses:PM Commission
Cr. Liablities:Accounts Payable
When the Property Manager remits a check for the balance minus their
commission, you'll have this transaction:
Dr. Assets:Undeposited Funds
Cr. Assets:PM Escrow
This reduces the amount owed to you via that escrow account, by the
Property Manager.
You can then 'pay' the vendor bill from the Escrow account:
Dr. Liabilities:Accounts Payable
Cr. Assets:PM Escrow
and then deposit the remainder to say, Checking:
Dr. Assets:Checking
Cr. Assets:Undeposited Funds
Note, you *could* combine two of those, but that is more difficult to
do with the business features. You can't do it via the 'pay bill'
dialog. You'd have to create the transaction or import it, and then
'assign as payment' on the relevant split. The combined transaction
would look like:
Dr. Assets:Undeposited Funds
Dr. Liabilities: Accounts Payable
Cr. Assets:PM Escrow
The first Debit is for the balance remitted to you, the second is to
cover the Commission bill (the one you'd assign as payment) and the
third clears out the Escrow account balance. (for that period invoiced)
I'm sure there are plenty of other options for Escrow/Holding accounts
and the transactions would be slightly different if you do any direct
deposit from that property manager.
Could anyone please comment on if this is workable? Creating both
invoices and bills every month is kind of tedious. Any suggestions
of how to simplify/optimize the process?
I really wished that GC would have the option to link Vendor/Customer
to a transaction without creating a bill or invoice. Any future
development plans for this feature?
I don't think there are any plans to bypass the Business Features to
facilitate other workflows.
You do have some options though:
1. Import bills & invoices, via CSV.
This will save some clicks and maybe typing, especially if the
documents and amounts don't change except for dates. You could just
re-import the same CSV each month and increment the invoice/bill numbers.
2. Use the Duplicate Transaction feature.
This would be handy for the payments and depositing transactions and
of course, you can easily update the transaction date, num, and
amount(s) but it gives you a 'template' type of effect to save some
typing and remembering which splits to include. Of course, you still
need to 'assign as payment' as needed.
3. Use Scheduled Transactions
Similar to the Duplicate function, but it can fire on a schedule, with
or without prior 'approval' by you and can include formulas for
amounts that can use variables that you get prompted to input when
they fire. This doesn't relieve the 'assign as payment' step, but
might be more robust than simply duplicating a previous instance.
4. Some combination of #2 and/or #3, forgoing the Business Features
entirely, and crafting your own special Saved Report Configurations
where needed. (the Transaction Report has robust filtering ability
that can likely duplicate most of what is in the Vendor/Customer Reports)
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