Recording Rental Mgmt company bills

[Cam Ellison]

Tuc at Beach House wrote:

>         Since I get the deposit before the guest stays (Thats the
> 1897.50 you see... The full rental is 3795.00. I think my comission
> fees are steep, but not THAT bad. ;) ) I wondered if I shouldn't carry
> it as some sort of liability since even though I got that money on
> Jan 1, 06, it was for a stay on June 10, 2006. I had an instance where
> they paid all the money, and then a hurricane happened and we had to
> refund them monies.
> 
>         I also wanted to try to figure a way to carry it all in the month
> it actually happened, so if I ran a monthly Income/Expense report I could
> see if I made/lost money on the month.
> 
>         Next I don't always end up with a $400 balance at the end of the
> month. The first 4 months I didn't set up auto-pay, and then one or two
> months they dipped into the "reserve". How would I know/record that
> the Receivable was dipped into, and/or replenished?
> 
>         Or am I trying to make things just too dang hard on myself and
> don't go by the invoices I get, go by when they throw the money in the
> account. If so, I still need to figure how to work out getting money
> in Jan for the stay in June and making sure it showed up on my June
> Income.

I see.  This is more complex.  You should show deposits as Liabilities, 
I think.  We rent dwellings mostly, but also our own house during 
vacation time.  We hold rental deposits, and that is straightforward: a 
credit to the chequing account, and a debit to the appropriate liability 
account.

If the accounting that is the source of your question refers to a 
deposit, then instead of it being revenue, it should go to the 
appropriate liability account.  When the guests have shown up and paid 
the outstanding amount, you can do another split transaction that moves 
the deposit from the liability account to the revenue account and shows 
the new money as revenue.  That transaction should also handle any other 
fees, etc., as well as the deposit.  Your "reserve" fund must be a 
receivable - it's your money, but held by someone else.  Now, when you 
do a month-end, you see only revenue that was actually received.  We 
tend to look at things quarterly, but mostly yearly - that presents a 
more realistic picture, because repairs get amortized over a longer 
period.  Replacing a hot water tank, for example, can make it look like 
a bad month, but that is not realistic.

HTH

Cam


-- 
Cam Ellison, Ph.D. R.Psych. #1417

Cam Ellison & Associates Ltd.
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