Self-managed portfolios tend to have two different scenarios:
This scenario is used where one owner entity owns all the units under management. This includes A landlord where all units are owned in their own personal name or a company name.
A/ Setting up Transactions for Income and Expenditure
Income
When setting up Arthur, ensure that all rents use transaction code Direct rent – you can make this a default setting. This means the system will assume the receipt of rent is as income and only creates transactions on the tenant statement. Additional income transaction types can also be set up.
Expenditure
In Arthur, any expenditure items will be payable by:
B/ Reconciliation of transactions
Arthur has two options to reconcile transactions against banking information.
If neither of these options is viable, users are also able to mark transactions as ‘received’ within the system manually.
C/ Reporting on Profit & Loss
Based on the information within Arthur, you are able to use the reporting area to run an Income vs Expenditure report across the whole portfolio.
This scenario is used where the units under management are owned by several different owner entities, all related to each other in some way with the rent being received into their individual bank accounts and still be considered an income. This includes A landlord where some properties are owned in their personal name and others in a limited company, A family portfolio managed centrally, but with units owned by different family members, an investment company where SPV’s and JV’s are used for purchasing units with all units being managed centrally afterward, etc.
Depending on your setup, there are three potential routes that can be taken:
In this scenario, all the units are managed by one ‘management brand’, almost like an agency. All rents collected into one client account and ‘remitted’ to each individual owner entity. Any invoices are sent in the name of the management brand.
Considerations
Upside
Setting up Transactions for Income and Expenditure
Income
When setting up Arthur ensure that all rents use transaction code Rent charge – you can make this a default setting. This means the system will assume the receipt of rent is a liability and must be remitted to the owner entity. The system will create transactions both on the tenant statement and the property owner statement. Additional income transaction types can also be set up.
Expenditure
In Arthur, any expenditure items will appear as bills to be paid either by the property owner or by the ‘management brand’. Transactions will be located on the ‘Contractor Statement’ and the ‘Property Owner Statement’. Where transactions appear on the ‘Property Owner Statement’, the money will be shown as a deduction before the money is remitted to each owner entity. Ensure that all payees are set up as contractors. Such as: tradesmen, utility companies, mortgage companies, white good suppliers, etc – regardless of whether they ‘complete work’ for you or are simply a supplier. Transactions can be added to both the ‘Contractor Statement’ and the ‘Property Owner Statement’ without a related transaction appearing on the other statement if required
Reconciliation of transaction payable and received with the bank account using Xero or Arthur`s live bank feed
If neither of these options are viable, users are also able to mark transactions as ‘received’ within the system manually.
How to remit to each owner entity
The ‘management brand’ will need to remit the money to the owner entities on a regular basis, this can be done in batch, with statements sending automatically
In this scenario, all the units are managed by one management brand’, almost like an agency. However, rents are sent directly to each owner entity’s bank account and any invoices are sent in the name of the owner entity.
Considerations
Upside
Setting up Transactions for Income and Expenditure
Income
When setting up Arthur, you should create individual transaction types for each owner entity. At a minimum, you should ensure that all owner entities have a rental transaction type that is considered an income. This means the system will assume the receipt of rent is as income and only creates transactions on the tenant statement. This is to ensure reconciliation and reporting can be completed accurately. It is also recommended that the user uses individual tenancy sub-types for each owner entity to further mark the portfolios as separate.
Expenditure
In Arthur, any expenditure items will be located on the ‘Contractor Statement’ and appear as bills to be paid. Ensure that all payees are set up as contractors. Such as: tradesmen, utility companies, mortgage companies, white good suppliers, etc – regardless of whether they ‘complete work’ for you or are simply a supplier.
Reconciliation of transactions
Arthur has two options to reconcile transactions in this scenario:
Reporting on Profit & Loss
Based on the information within Arthur, you are able to use the reporting area to run an Income vs Expenditure report across each portfolio.
In this scenario, whilst there is some form of relationship between the owner entities (usual people in common), each is treated as its own separate brand and is managed as such. Day-to-day management is completed under each owner entity name, rents are collected directly into the owner bank account and statements and invoices are created in the name of the owner entity. Setting up these additional accounts and using our global switch mean access is straightforward with a single login.
Considerations
Upside
Setting up Transactions for Income and Expenditure
Income
When setting up Arthur, ensure that for each account all rents use transaction code Direct rent – you can make this a default setting. This means the system will assume the receipt of rent is as income and only creates transactions on the tenant statement. Additional income transaction types can also be set up.
Expenditure
In Arthur, any expenditure items will be located on the ‘Contractor Statement’ and appear as bills to be paid. Ensure that all payees are set up as contractors. Such as: tradesmen, utility companies, mortgage companies, white good suppliers etc – regardless of whether they ‘complete work’ for you or are simply a supplier.
Reconciliation of transactions
Arthur has two options to reconcile transactions against banking information.
If neither of these options is viable, users are also able to mark transactions as ‘received’ within the system manually.
Reporting on Profit & Loss
Based on the information within Arthur, you are able to use the reporting area to run an Income vs Expenditure report across the whole portfolio.
Creating consolidated reports across all owner entity portfolios
When a user runs a report, if the report is able to consolidate data across all portfolios, the user will be asked which portfolios should be included in the report. Note, not all reports will be able to do this.
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