[GNC] GnuCash for a Letting Agency (holding client money)

[Stephen M. Butler]

Welcome aboard Oli.  In the recent past I owned an apartment complex and
utilized a property management company to sit between me and the tenants. 

In my case, I had the agency pay the utility bills and handle the
maintenance.  Don't know if you offer that service in addition to
collecting the rent.

Your CPA will be a big resource in setting up the specific Chart of
Accounts (CoA) that will work well for both you and he/her.   They may
want you to show all of the collected monies as Revenue and then show
payouts to the landlord as Expense.  In the interim between receipt of
funds and payout the money would sit in one of your accounts as an Asset
and he would also have a Liability (not a loan) to the landlord of the
portion due them.  If you covered other expenses (like utilities) for
the landlord, then the liability would be reduced by those amounts when
they were paid.

Again, your CPA is the best source for setting up the CoA.  You might
find a very small set of accounts will suffice depending on how much you
do for each landlord.

--Steve

On 2/21/19 10:34 AM, zcacogp wrote:
> Hi, 
>
> First message here. Be gentle - thanks! 
>
> First time user of GnuCash as well. AND, making things worse, I don't know
> much about accountancy either. Hence this post. 
>
> I run a small letting agency, and have always done my accounts on a series
> of spreadsheets. It's worked for a number of years but my accountant if
> getting fed up with what is effectively a very disparate bespoke system and
> asked me to start using a proper accounting package. GnuCash looks good and
> I'd like to make it work for my business. 
>
> I'm not an accountant and hence am not /au fait/ with accountancy
> terminology, but am learning fast. I think I've understood some of the
> basics of GnuCash (I've been playing with it all afternoon) but can see that
> setting things up correctly will be a major part of success or failure. My
> agency handles client money; a tenant will pay me their rent (£1000/month),
> I raise an invoice for my agency fees (£100) and pay the rest on to the
> landlord (£900). Am I best advised to set up each property as a separate
> account file or as a separate Account under "Current assets"? Bear in mind
> that of the rent payment above then only £100 of it is company money; £900
> belongs to the landlord from the moment the payment is made to me. 
>
> For what it's worth, my business has two bank accounts; one Clients Money
> Account (where the rent is paid into) and one Company Account (from which I
> pay bills from suppliers and so on). 
>
> Other posts on here suggest that I should treat the payment as being £100 of
> income for my company and £900 of loan, and I pay off the loan to the
> landlord who exists as a creditor of mine. I understand this concept but am
> not sure how to set this up on GnuCash. I am sure I can learn, but helpful
> tips would be welcomed. 
>
> Thanks in advance for any help. 
>
>
> Oli. 
>
>
>
> --
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-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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