Once created they will go onto the recipient’s statement:
4. What types of transactions are there
The transaction will fall under two main categories:
Debit the statement (charge to be paid by/to tenancy, owner or contractor)
Credit the statement (credit to be paid to tenancy or owner- negative charge)
Credit the statement (receive money from the tenant)
Debit the statement (pay money out to the tenant, owner, and contractor of the statement)
5. How Arthur distinguishes between self-managed portfolios and 3rd party management
Identifying your management type in Arthur’s ‘Financials’ is a fundamental step to ensure that your set up reflects your business. This is especially important if you intend to integrate with cloud accounting software later on.
Two types are available;
Direct rent– used by those that self manages i.e collecting the rent for themselves. Direct rent assumes the receipt of rent remains as income on the tenant statement and outgoings are costs to contractors. Together these will show on an income and expenditure report.
Rent charge – used by those who manage on behalf of 3rd Parties e.g agencies who deduct fees from the rent before passing it on. The balance on the property owner statement is a current liability. Rent charge assumes the receipt of rents will go across to a property owner statement to be paid out.
Some Arthur clients are a mixture of both so we suggest setting your default position to the most common management type. To set you default position on rent type
6. How does the hierarchy affect what transactions are visible
Depending on the level you view the statement will determine what transactions you see. This is linked to understanding hierarchy
The property level shows = property-related transactions + unit/s related transactions + tenancy/s related transactions
The unit-level shows = unit related transactions + tenancy related transactions
The tenancy level shows = tenancy related transactions
7. How does hierarchy affect what is seen on an owner statement
Viewed at owner level – This will include all transactions across all properties/units/tenancies in the portfolio on one statement
Viewed at property level – This will include all transactions related to that property/unit/tenancy = tenancy related transactions + unit related transactions + property related transactions
Viewed at the unit level – This will include all transactions related to that unit/tenancy = tenancy related transactions + unit related transactions
There are many advantages to using the two systems. One of the most important is the avoidance of having to manually record the same data across multiple software/spreadsheets. Another advantage is that it complies with new regulations for Making Tax Digital. One of the best features is the bank feed and reconciliation process. In short, Arthur is responsible for tenant, owner and contractor statements and Xero or QuickBooks is responsible for your business. This gives users the best of two worlds.
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