Forum Message

Landlord, agent, tenant triangular accout process.

I am a landlord renting property and usining an estate agent to collect rent. I invoice the tenant for his full rent. The agent receives rent from the tenant & deducts his commission, fees & VAT. The agent then sends the net rent to my bank account less the above commission etcetera. How can I record this payment method tracking all transactions of the payment. I need to ensure that the tenant has fully paid his rent and that both the agent's and tenant's accounts are fully accounted.


Posted by Paul Kopik on Jan 4, 2011 12:01 PM GMT

Hi Paul,

Create a new asset account called 'Collected Rent Held By Agent'. This account represents the money owed to you by the estate agent. When your tenant pays the agent, record an Invoice Payment deposited into this account, then record a Money Paid Out transaction paid from this account to record the agent fees. Finally, when the agent pays you record a General Transaction from the 'Collected Rent Held By Agent' account to the Cheque Account.

Note that this approach is similar to the way that PayPal transactions are recorded:
http://www.solaraccounts.co.uk/help/how-to-record-paypal-sales-fees.php

Regards,


Posted by Mark McLaren (Solar Accounts) on Jan 4, 2011 1:53 PM GMT

Mark, using this method, should the Collected Rent account balance to zero ?

Thank you


Posted by Colin on Nov 9, 2011 4:57 PM GMT

Hi Colin,

Yes, after the agent pays what you are owed the balance of the 'Collected Rent Held By Agent' should be zero.

Regards,


Posted by Mark McLaren (Solar Accounts) on Nov 10, 2011 11:29 AM GMT

I would concur that Solar appears well suited to a property company.

Having been a slave to Intuit for many years and getting more and more dissatisfied, we broke with them a couple of years ago, having found another accounts package that would do (just!). Trouble is, this program like many others forbids negative line entries in either purchases or invoices, thus all rent statements from agents have to go through the nominal ledger.

Solar allows accounting for the rental income, less commission and other expenses that can all be entered onto one form. The only downside is that there is no department code on each line, so each property needs its own rental and expenditure sub-accounts - but these only need to be set up once.

There is also a feature to open an existing form and copy it, thus if your form has a dozen or so lines, it's just a matter of changing the amounts and adding or deleting the odd line.

Still on the trial version at the moment, but with the above it's looking good to come on board


Posted by David Abbott on Mar 19, 2012 4:47 PM GMT