Understanding financials

This will give a summary of Arthur financials on a basic level

Where can transactions be added

Any transactions added to Arthur will have a relationship to:

  • Property
  • Unit
  • Tenancy
  • Work order

How do transactions get created

  1. Manually (one-off transactions) 
  2. Automatically (recurring charges) 
  3. Via the contractor app to the workorder

Where do the created transactions reside

  • Tenant statement
  • Owner Statement
  • Contractor statement

What types of transactions are there

Transaction will fall under two main categories:

  • Charge
  • Reciepts

Charges

  • Debit the statement (charge the tenancy or owner)
  • Credit the statement (credit the tenancy or owner- negative charge)

Receipts

  • Credit the statement (receive money)
  • Debit the statement (pay money out of the statement)

How Arthur ditinguishes 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 manage i.e collecting the rent for themselves.
  • 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.

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 click here

 

 

How does hierarchy affect where transactions are located

Depending on the level you view the statement will determine what transactions you see

  • Property will show transactions =  tenancy + unit + property
  • Unit will show  transactions = tenancy + unit
  • Tenancy will show transaction =  tenancy only

 

 What is a remittance

Remittances are a collection of charges and receipts that result in a single payment (transaction) being made. Remittances are made to:

  • Tenants, on a closing statement
  • Property owner, when they are due funds. This is linked to how to apply management fees
  • Contractor, to pay their bills

Remittances payable to owner, tenant and contractor are the net figure paid to them. The remittance will generally be a collection of transactions.

​You must never void a remittance as it voids all the linked transactions within. To remove or add further tramsaction to the remittance the remittance must first be unallocated and then adjusted

 How does hierarchy effect how an agent remits to their property owner

  • By owner – This will include transactions across the whole portfolio on one statement
  • By property – This is used where a owner own a property and all underlying units and wants a statement by property
  • By unit – This will include all transactions on a unit

This is linked to th article how to set up you remittance preference

Where does Xero or QuickBooks fit in?

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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