[GNC] Using GC for Property Management

[Jediator]

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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