The term "Budget" varies depending on the region. For our Asia-Pacific customers, it's often referred to "Budgeted Outgoings." European users will see it labelled as "Service Charge," while those in North America will find it listed as "Operating Expenses." The terminology used in the app adjusts based on your location. For additional clarity on regional vocabulary, please see our Glossary of Regional Terminology.
When you inherit the management of a property that has existing financial records from a previous agency, you might need guidance on how to accurately integrate these historical Budgeted Outgoings or Service Charge entries into Re-Leased. This article outlines the steps you should take to properly handle prior agency income and expenses, ensuring that your reconciliation reflects the necessary invoices and budget items, without resorting to manual adjustments. This article is also relevant to those moving onto Re-Leased midway through a budget period and the income/expenses are needing to be reflected that have been paid in a previous software.
Setup Requirements
- A Revenue Chart of Account Code named "Prior Agent Income" or a similar descriptor.
- An Expense Chart of Account Code titled "Prior Agent Expenses" or a similar descriptor.
Accounting for Prior Agency/Software Income
To account for any income generated by the prior agency/software, please follow these steps:
- Create a new Income Invoice for each tenancy using the correct Outgoings or Service Charge Tenancy Income Account Code specified in the Budget details.
- Issue an Income Credit Note using the "Prior Agent Income" account code detailed in the setup requirements above. You are able to use Credit Invoice directly from the invoice for efficiency.
- Allocate the Credit Note created in Step 2 against the Invoice from Step 1, thereby zeroing the remaining balance.
The Outgoings/Service Charge Income Report will accurately reflect the income without impacting the cash position.
Addressing Prior Agency/Software Expenses
For expenses incurred by the previous agency/software, a parallel approach is taken:
- Issue an Expense Invoice with individual line items correlating to each Budget Expense Code's total.
- Create an Expense Credit Note using the "Prior Agent Expenses" account code detailed in the setup requirements above. You are able to use Credit Invoice directly from the invoice for efficiency.
- Allocate the Credit Note from Step 2 against the Invoice from Step 1 to nullify the balance.
The Expenses will show correctly under the Outgoings/Service Charge Expense Report without impacting the cash position.
Adding Expenses as Actuals Against a Property Budget/Service Charge
This situation could be likened to an owner paying an expense out-of-pocket, which still needs representation in the Budget/Service Charge. The opposite or both scenarios may apply. It is crucial to add these expenses as actual figures within your Property Budget/Service Charge to maintain accurate financial records.
If you encounter any issues or require additional assistance with these procedures, please don't hesitate to reach out. Our support team is here to ensure your transition to managing new property financials within Re-Leased is seamless and efficient.