Re: [GNC] Using GC for Property Management
I think the difficulty is that in the gnucash structure at present, a transaction does not have a vendor or customer identity associated with it direcctly. It is the invoice/bill structure which provides the link between a customer/vendor and the particular associated transactions. There is an identification of receipt of payments and the making of payments which also ties back to the invoice/bill structure. I don't know whether that is a separate data structure from the invoice/bill data structures or whether it is a part of that structure. I suspect that it is a separate structure which ties the transaction Id to the invoice/bill Id. Derek may be able to enlighten us here. If it is a separate structure then perhaps a separate field which identifies it as a payment associated with an invoice/bill or a cash payment can be added. In the latter case the link could point perhaps to a customer/vendor id directly rather than to the associated invoice/bill id. If that is possible then a modification to the process payment dialogues to allow a cash payment option which connects the vendor/customer links rather than the invoice link may be a possible route. On Mon, 2023-09-25 at 16:44 -0400, Jediator wrote: > 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 > > > >
Re: [GNC] Using GC for Property Management
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
Re: [GNC] Using GC for Property Management
Yeah, AI is not presently a danger, precisely because it doesn't exist. That's just marketing hype. The danger is that people *think* it exists and are trusting those algorithms as if it does. Like any tool, the danger lies not in the tool itself, but with the user who doesn't understand what it can and cannot do. Regards, Adrien On 9/25/23 2:52 PM, Stan Brown (using GC 4.14) wrote: +1 This has been widely publicized, and it's kind of scary there are people who don't know it. Until someone pointed it out publicly, AI would cheerfully give information abut the recordholder for walking across the English Channel. And a lawyer was disciplined for submitting a brief with multiple citations of cases that were completely fictitious. You guessed it: they were generated by an AI. And that's without even getting into the moral implications of using AI. Frex: Theft of intellectual property is a major cause of the Hollywood writers strike, and a lawsuit by several well-known literary authors. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Using GC for Property Management
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
Re: [GNC] Using GC for Property Management
On 2023-09-25 12:40, Adrien Monteleone wrote: > ChatGPT cannot give you an answer. > > It is designed to spit out sentences that plausibly sound like a human > answered your question. > > There is a universe of difference between the two. > > One implies accuracy, the other is B.S. that appears accurate to those > who don't know better. +1 This has been widely publicized, and it's kind of scary there are people who don't know it. Until someone pointed it out publicly, AI would cheerfully give information abut the recordholder for walking across the English Channel. And a lawyer was disciplined for submitting a brief with multiple citations of cases that were completely fictitious. You guessed it: they were generated by an AI. And that's without even getting into the moral implications of using AI. Frex: Theft of intellectual property is a major cause of the Hollywood writers strike, and a lawsuit by several well-known literary authors. Stan Brown Tehachapi, CA, USA https://BrownMath.com ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Using GC for Property Management
"to those who don't know better" Bit eye roll there. On 9/25/23 12:40 PM, Adrien Monteleone wrote: ChatGPT cannot give you an answer. It is designed to spit out sentences that plausibly sound like a human answered your question. There is a universe of difference between the two. One implies accuracy, the other is B.S. that appears accurate to those who don't know better. Regards, Adrien On 9/22/23 2:56 PM, Mark at Lorimark wrote: well... I don't know how to answer your question, but considering what I would do if I were asking the same questions... I went to ChatGPT and asked the big AI. Here is what it said; ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Using GC for Property Management
ChatGPT cannot give you an answer. It is designed to spit out sentences that plausibly sound like a human answered your question. There is a universe of difference between the two. One implies accuracy, the other is B.S. that appears accurate to those who don't know better. Regards, Adrien On 9/22/23 2:56 PM, Mark at Lorimark wrote: well... I don't know how to answer your question, but considering what I would do if I were asking the same questions... I went to ChatGPT and asked the big AI. Here is what it said; ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Using GC for Property Management
Also, https://lists.gnucash.org/pipermail/gnucash-user/2023-June/107567.html would probably readily adapt for commission. > ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: [GNC] Using GC for Property Management
Thanks Mark for your response. Very interesting answers. Nice try Mr. ChatGPT. This seems to be a typical ChatGPT response, overwhelmed with words (no picture), mixing different subjects together (accounting workflow and management workflow), and not answer the questions specifically to GC. One credit I do have to give to ChatGPT is that it makes sense to set up the Rental Receivable under asset instead of under income. Other than that, all CPAs can feel relieved that they don't have to worry about job security for a long time. After several tries, I realized that I had to do the renter invoice with split of rental passthrough and management fee, instead of do the split on the owner's bill part (as a matter of fact, it is impossible to do the split on the bill). Other than that, the workflow will be the same. Giving the current GC features, I do have to create both renter invoices and owner bills individually. It seems there is no other easier ways to do that, unless someone can help me understand the SQL needed to create an automation script to streamline the workflow... -- JC On 9/22/23 3:56 PM, Mark at Lorimark wrote: well... I don't know how to answer your question, but considering what I would do if I were asking the same questions... I went to ChatGPT and asked the big AI. Here is what it said; My Prompt (from you): 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. write a workflow to process that. ChatGPT Setting up a workflow for a small property management business involving Renters, Property Owners, and Property Managers requires careful consideration of the steps and interactions between these actors. Here's a workflow to help you process rent payments and management fees: Workflow: Rent Payment and Management Fee Processing Renter Pays Rent: On a monthly basis, the Renter pays their rent to the Property Management company. Rent can be paid through various methods, such as bank transfers, checks, or online payment portals. Rent Receipt and Acknowledgment: The Property Management company issues a rent receipt or acknowledgment to the Renter upon receiving the rent payment. The receipt should include details like the payment amount, payment date, property address, and a unique reference number. Record Rent Payment: The Property Manager records the rent payment in the property management system or accounting software. Ensure accuracy in recording payment details for future reference and reporting. Deduction of Management Fee: After receiving the rent payment, the Property Manager calculates and deducts the agreed-upon management fee percentage. The remaining amount represents the net income from rent. Payment to Property Owner: The Property Manager initiates a payment to the Property Owner for their share of the rent income. This payment is typically done through bank transfers or checks, and it should include a breakdown of income and deductions. Monthly Reporting: Prepare monthly financial reports for both the Property Owner and the Property Manager. The report should detail rent collected, management fees deducted, and any expenses incurred on behalf of the property owner. Reserve Fund Allocation (Optional): If agreed upon, allocate a portion of the rent income to a reserve fund for property maintenance and repairs. Maintain transparency by documenting the allocation and use of these funds. Communication with Property Owner: Keep open lines of communication with the Property Owner regarding rent payments, property maintenance, and any issues that require their attention. Ongoing Property Management: Continuously manage the property, address maintenance requests, and ensure the property is well-maintained to retain tenants. Annual Financial Statements and Tax Reporting: Prepare annual financial statements and provide necessary tax documentation to Property Owners for tax filing purposes. This workflow ensures a systematic and transparent process for handling rent payments, management fees, and property owner payments. It helps maintain good relationships with both Renters and Property Owners while ensuring financial accuracy and accountability. Additionally, consult with legal and financial professionals to ensure compliance with local regulations and tax requirements. My Follow-up Prompt: User can you express those elements as they pertain to accounting steps ChatGPT Certainly, let's break down the workflow into accounting steps for your property management business: Accountin
Re: [GNC] Using GC for Property Management
well... I don't know how to answer your question, but considering what I would do if I were asking the same questions... I went to ChatGPT and asked the big AI. Here is what it said; My Prompt (from you): 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.write a workflow to process that. ChatGPT Setting up a workflow for a small property management business involving Renters, Property Owners, and Property Managers requires careful consideration of the steps and interactions between these actors. Here's a workflow to help you process rent payments and management fees: Workflow: Rent Payment and Management Fee Processing Renter Pays Rent: On a monthly basis, the Renter pays their rent to the Property Management company. Rent can be paid through various methods, such as bank transfers, checks, or online payment portals. Rent Receipt and Acknowledgment: The Property Management company issues a rent receipt or acknowledgment to the Renter upon receiving the rent payment. The receipt should include details like the payment amount, payment date, property address, and a unique reference number. Record Rent Payment: The Property Manager records the rent payment in the property management system or accounting software. Ensure accuracy in recording payment details for future reference and reporting. Deduction of Management Fee: After receiving the rent payment, the Property Manager calculates and deducts the agreed-upon management fee percentage. The remaining amount represents the net income from rent. Payment to Property Owner: The Property Manager initiates a payment to the Property Owner for their share of the rent income. This payment is typically done through bank transfers or checks, and it should include a breakdown of income and deductions. Monthly Reporting: Prepare monthly financial reports for both the Property Owner and the Property Manager. The report should detail rent collected, management fees deducted, and any expenses incurred on behalf of the property owner. Reserve Fund Allocation (Optional): If agreed upon, allocate a portion of the rent income to a reserve fund for property maintenance and repairs. Maintain transparency by documenting the allocation and use of these funds. Communication with Property Owner: Keep open lines of communication with the Property Owner regarding rent payments, property maintenance, and any issues that require their attention. Ongoing Property Management: Continuously manage the property, address maintenance requests, and ensure the property is well-maintained to retain tenants. Annual Financial Statements and Tax Reporting: Prepare annual financial statements and provide necessary tax documentation to Property Owners for tax filing purposes. This workflow ensures a systematic and transparent process for handling rent payments, management fees, and property owner payments. It helps maintain good relationships with both Renters and Property Owners while ensuring financial accuracy and accountability. Additionally, consult with legal and financial professionals to ensure compliance with local regulations and tax requirements. My Follow-up Prompt: User can you express those elements as they pertain to accounting steps ChatGPT Certainly, let's break down the workflow into accounting steps for your property management business: Accounting Workflow: Rent Payment and Management Fee Processing Renter Pays Rent: Debit: Rent Receivable (Asset Account) Credit: Rental Income (Revenue Account) Rent Receipt and Acknowledgment: Issue a rent receipt with details of the payment, including the rent amount, payment date, property address, and reference number. Record Rent Payment: Debit: Bank Account (Asset Account) Credit: Rent Receivable (Asset Account) Deduction of Management Fee: Calculate the management fee as a percentage of the total rent received. Debit: Management Fee Expense (Expense Account) Credit: Rental Income (Revenue Account) Payment to Property Owner: Debit: Management Fee Expense (Expense Account) Credit: Owner's Equity or Due to Property Owner (Liability Account) Issue a payment to the Property Owner, including a breakdown of income and deductions. Monthly Reporting: Prepare monthly financial reports, including an income statement and a balance sheet. Include details of rent collected, management fees deducted, and any other property-related expenses.
