Almost every day I learn something new. Today is was how to enter in income from property that you own that is managed by a property management company.
Rental Income $1000
- Property Management Fees $100
- Repairs this month $45
= Total Check (direct deposit) $855.00
Typically bookkeepers enter these 3 lines directly in the "Make Deposits" window in QuickBooks. Unfortunately, it won't appear connected to the customer in the customer center because QuickBooks is "forms based" software. A sales receipt is a form, so if you enter it there, instead of directly into the deposit screen, the data will be attached to the customer.
Your customer is the Property Management Company.
Add 3 lines items in the Products and Services List for each property.
1. Location Rental Income (default amount to rent), posts to Rent Income
2. Name of Property Management Company fees (default amount to their monthly fees), Posts to expense account Property Management Fees.
3. Location Repairs, Posts to expense account Property Repairs.
Every month, enter the deposit using a Sales Receipt with these 3 line items.
Location Rental Income is positive.
Name of Property Management Company Fees as a negative
If there are repairs, Location Repairs will be negative too.
The total of the Sales Receipt is the amount of the check.
Note on the accounting: While it may seem counter intuitive to post a negative line item to an expense account it works out perfectly, because a double negative is a positive, so your rent income is positive, and your expenses are positive on the P&L too.
Enter the check # into your Sales receipt. If the money is direct deposited, you can deposit it directly from the sales receipt. And it all shows up under the customer center!
This is a terrific solution, because I'm wondering if one property management company overcharged my client? Now I'll be able to show him clearly what happened and let him sort it out.
Isn't this the coolest solution ever?