I have a real estate business so it's all service related and there's no inventory. For example, recording a monthly property management fee expense. How does one record that and expenses like that without a journal entry or is that the way to do it? He's used to Quickbooks and other software and was expecting to find a menu option, like Sales for income, to record expenses. Thank you.
1 01/25/2020 09:17:24 pm
Re: How to record admin expenses on accrual basis? (2 replies, posted in Banking and General Ledger)
2 01/24/2020 09:38:39 pm
Topic: How to record admin expenses on accrual basis? (2 replies, posted in Banking and General Ledger)
Hello,
I'm working with an accountant to use FA for my real estate business. He's learning his way around the system and asked me a question. He wants to know how to record admin expenses on an accrual basis besides using journal entries. I'd appreciate it if someone could help answer this for him. Thanks.
3 02/13/2019 07:03:05 pm
Re: No Equity class? (4 replies, posted in Banking and General Ledger)
Thanks. At the moment, I'm testing all this in a development install I have set up. Once I figure out if I can use FA, set up the right chart of accounts, and learn how to make the appropriate entries, I'm going to install FA into my production environment and use it for my brokerage and landlord property management accounting going forward. In order to keep accounting simple and to a minimum, I'm trying out dimensions instead of creating an account for each landlord/property.
Question: why do I need to create a (separate) payable account for the landlord? When I receive funds from a landlord, why should it be entered into this payable account? Thanks.
4 02/13/2019 06:12:02 pm
Re: No Equity class? (4 replies, posted in Banking and General Ledger)
Thanks for your reply. My understanding was that owner's equity includes what they put into a business. The accounting equation, Assets = Liabilities + Equity would have the owner's capital in the equity side, wouldn't it? That's how I'm reading the accounting docs I've looked at. I am keeping one account for landlord reserves which are used for repairs. I differentiate between the properties (and landlords) by using Dimension entries for each property I manage. This was recommended by someone in the Dimension topic. I have my own brokerage income/expenses and I also track them for landlords for the properties I manage.
Landlord send me funds which I use for repairs for their specific properties. These funds belong to the landlords and not to me. There is only one account for this. When I receive a deposit from a landlord, I debit the repair reserve account, which I have created as an asset account, and I was looking to credit another account but i couldn't figure out which one should be credited. I assume it should be owner's capital or something like that which would be an equity account? This is my confusion. Thanks.
5 02/13/2019 05:38:27 pm
Topic: No Equity class? (4 replies, posted in Banking and General Ledger)
I'm new to accounting and FA both of which i'm trying to understand so I can use FA for my accounting needs. I'd like to know why there is no Equity class and why Retained Earnings and Share Capital have class Liability instead of Equity? For my real estate and property management business, if I want to record funds received from landlords for repairs, for example, my understanding is that I would need to debit an asset reserve account and credit an owner equity (capital) account? However, there is no Equity class or accounts. I tried to create one and put an owner capital account in it but it doesn't look right in the balance sheet where any amounts in equity gets subtracted from assets. This is confusing. Thanks for any feedback.
6 02/07/2019 04:01:29 pm
Re: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
Thanks, I will play around with it and see what works. Question: if I want to have one dimension for the properties and another for my brokerage operations, do I have to create 2 dimensions or can I just use 1 for the properties, select it for related entries and not select any for regular brokerage transactions?
7 02/05/2019 07:29:00 pm
Re: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
I have one brokerage (company) for both property management and brokerage operations. The main common transaction is the property management fee I receive from each landlord each month. I also handle all the repairs from a reserve account where I hold funds from each landlord for his properties. So there is definitely interaction because it's part of my business. Unlike other management companies, rent doesn't hit my books but goes directly to landlord accounts so it needs to be kept off my books but tracked for the landlord PL statements, etc.
Another quick question about customers. I guess customers would be my landlord clients? I can add them and connect each to a dimension (property) but one landlord can have multiple properties. They send me one payment each month for all their properties if they have more than one. I send them one statement per property. Is there a way (or is it even needed) to connect landlords (customers?) to their properties? What about tenants? I wouldn't consider them customers but they are the ones paying the rent to the landlords.
Trying to understand how to map all this to my accounting system in FA. Appreciate the help.
8 02/04/2019 02:29:33 pm
Re: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
Thanks for this very helpful advice! I will test this out on my development site first. I think dimensions may be the answer for me instead of 2 books. A bookkeeper I was talking with was telling me the problem is that the rents would be reported on my books even though I am not collecting them but am only recording them for the landlords accounting. That's why she said I may need to maintain 2 sets of books. I'm all for keeping things simple and straight forward but I'm not sure accounting is like that. 
I do have a question. If I want to give a bookkeeper access to and control of the accounting for the property management side only, ie. the statements which go to the landlords for their properties, and not the brokerage operations, is it possible to do this keeping just one set of books but using dimensions?
Braath Waate wrote:
Quickbooks classes are the same as FA dimensions.
Tags were introduced for filtering G/L accounts on reports. They could work for you by using separate G/L accounts (or sub accounts) where transactions are posted and tagging each G/L account . Every property transaction would need the correct G/L account. Support for tags is limited. Tagging would be useful if you need to examine profitability of groups of properties.
Simpler would be to assign a dimension to each property. Every property transaction would need a dimension.
FA supports two levels of dimensions. You can have a single company with two dimensions (brokerage and property management). The property management side can have property dimensions. Then you can generate separate P/L statements for the brokerage and property management side, as well as separate P/L for each property.
You are better off with using dimensions than creating two sets of books in most cases. That is because bank accounts and expenses can be shared within a single company. For example, if you have a single credit card and pay for expenses for both sides of the company, reconciliation is simple if both sides are part of the same company but impossible with two sets of books.
You should experiment by creating a company and trying out your ideas and look at the P/L statements. Run those by your accountant or bookkeeper and see if they make sense. You will save yourself and others time if you set up a system that everyone is comfortable with.
Try to keep the number of G/L accounts/dimensions to a bare minimum. The more you have, the more complex is the transaction data entry. For example, if you pay for some item and it is not clear which property it is for or is shared between multiple properties, that bogs down data entry. You may find that keeping data entry separate for each property is a nightmare and not worth the effort in tracking profitability.
9 02/04/2019 02:25:03 pm
Re: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
Thank you. I will look through them. I have gone through the forums and documentation and I continue to do so. Thanks for your assistance.
apmuthu wrote:
The Wiki lists all resources needed and searching the forums would be a start.
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GL Account Groups Post
GL Sub Ledger Post | Alternative Post
10 02/03/2019 02:38:43 am
Re: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
Thanks for your reply. I researched sub ledger and that could be useful. Would I need to create an account for each property then? By somehow using tags or dimensions, if appropriate, I was hoping to have one account and just assign entries to the tag or dimension which I still don't understand.
One thing to note is that I don't actually collect rent from tenants. Rent payments go directly to landlord accounts and they pay me management fees separately. The rent does not hit my accounts. I just have to record them for the landlord statements. Should I create 2 different companies or do everything in one?
Where would I find the repos you're referring to and what would I be looking for? Thank you.
11 02/02/2019 12:26:07 am
Topic: New user: understanding dimensions and tags (10 replies, posted in Dimensions)
Hello everyone,
I'm a real estate broker with an IT Unix/Linux background. I recently installed FA and am evaluating it to see if I can use it for my production accounting needs. I am partial to open source software and try to use it wherever I can because of my background. I have less than a basic accounting knowledge and that's what I'm now trying to change. I do all my numbers on spreadsheets and I'm trying to transition to a proper accounting system.
I have my brokerage operations: sales, leasing and I also do property management. I've been looking for a bookkeeper who is willing to look at anything other than Quickbooks and that's been a challenge so far. I realize I'll have to do some or a lot of the work myself. One bookkeeper has told me to create 2 sets of books (or companies), one for the brokerage side and one for the property management side. I'm not sure if this is the way to do it but I'll try it.
I'm trying to understand how I can use dimensions and account tags to track income and expenses for each property I manage. Is this equivalent to the Quickbook "classes" for those of you who know Quickbooks? Do I create each property as a dimension, using its street address for the name, or do I use tags for this purpose? There will only be one income account and one expense account instead of creating one for each property so I'd like to be able to differentiate transactions for each property I manage. If someone can give me some basic guidance I'd really be grateful. Thank you in advance!