Property Management company accounting
Asked Jan 2, 2008, 06:57 PM
My property management company manages different properties for various people. We collect rent from tenants but that rent is not considered our income because we have to pay it out to the people we manage property from. However we do take a percentage of the rent as income for our company as a property management fee. We also take money out of the rent we collect to pay for maintenance on those properties. My problem is this: When I am doing my bookkeeping, what account should I be putting rent in because it isn't an income? I have been entering it in accounts receivable in a subaccount titled rents receivable - then I take the rent out of accounts payable. But this doesn't show up correctly on the balance sheet because it shows my total assets as the total rent received even though it isn't income. I need a solution so that my bookkeeping is easy to understand and correctly entered in quickbooks.