Understanding Ledgers and Transaction Types (Legacy)
This help article contains instructions for the Legacy Version of Rentec Direct. More information about the latest version of Rentec Direct can be found here: The Remodel | Rentec Direct’s Newest Software Update
Posting transactions are the heart of property management bookkeeping. Done correctly, ledgers and reports show the current state of that account at a glance. Good accounting practices is another way to communicate trust to your tenants and owners and keep you in compliance for state and local regulations and tax purposes.
The process of posting transactions in your software is very simple. However, there are some nuances and important information to know depending on the type of transaction to help towards bookkeeping success.
Throughout the software, every property, subunit, tenant, co-renter, owner (if using the PM version) and bank account has a corresponding ledger that tracks debits and credits.
With the exception of a tenants ledger, credit is typically an income and debit an expense.
Tenant ledgers are a bit different in that the debit column lists all the charges for which they owe payment, such as rent and late fees. The tenant credit column shows payments received.
Transaction Types Overview
There are three major transaction types that you and the system will post in the software:
- Tenant Related Transactions - rent charges, late fees, other charges, deposits, discounts, payments (income), payment failures, corrections, etc.
- Property Transactions - income (payments received from tenants), other income (such as rental applications), property-related expenses, refunds, tenant payment failures, corrections, etc.
- Bank Transactions - above transaction types where funds flow to or from a financial institution as well as credit card payments, bank fees, mortgage payments, etc.
As you can see, many of these transaction types will need to display on multiple ledgers simultaneously to keep track of tenant, property, banking, and owner balances. Because your Rentec Direct software was designed with this in mind, understanding ledger flow will help your bookkeeping success.
Transactions flow from ledger to ledger on a certain path depending on which ledger the transaction is initially posted. It is designed this way to save you time in data-entry and transaction edits.
Because of this, to have the transaction display on all the correct ledgers simultaneously, it's important before posting to take a moment to decide where to enter the transaction. Once familiar with the program, it will become second nature.
For example: if posting a payment from a tenant, you would go to Tenants to post that transaction which will automatically display simultaneously on the correct property ledger and corresponding bank ledger (and owner ledger if in the PM version).
Errors occur when choosing to post that tenant payment directly on the property because the transaction will not flow back to the tenant ledger.
System Advice: Until you are familiar with the program, double-check before posting that you are posting tenant income from the Tenant section and property expenses in the Property section.