Markup on Vendor Expenses

There are some property management companies that operate as a vendor liaison. The property management company contracts with vendors and pays them directly from their own property management operating account. 

In those cases, the property manager might add a mark-up on those vendor expenses to compensate for their time and coordination. 

For example: If you receive a $90 invoice for plumbing work from ABC Plumbing and you have a $10 mark-up fee for every invoice, the total cost to the owner would be $100. To accomplish this, follow the three steps below. 

STEP ONE - Bill the Property the Marked-Up Expense

In your Rentec Direct account: 

1. Click Properties.
2. Right-click on a Property and choose Post Expense.
3. Add the full charge to the property (vendor invoice + mark-up = $100 in this example).
4. Select the Bank account the funds are to be pulled from if you are paying out this expense to your management company as the payee. Or, leave the Bank account as NONE if the funds are to stay in your operating account.
5. Add the expense Category for repairs.
6. List your management company as the Payee.
7. Add the name of the vendor performing the work in the Memo line.  
8. Click Post Expense to save. 

STEP TWO - Track the True Vendor Charge 

Now that you have charged the property for the marked-up expense, you will need to track the actual vendor expense ($90 from the example above) and you'll do so to your business account at a company level.  

Information to access a simple solution for tracking company income and expenses separate from property/owner expenses within the Rentec Direct software can be found here: Tracking Business Income & Expenses

Once that business ledger has been created you'll post the actual vendor expense on that ledger. 

In your Rentec Direct account:

1. Click Banking.
2. Choose the bank account ledger you created to track your business income and expenses. Right-click and choose -Post Expense.
3. Enter the details of the vendor payment (amount, payee, category, etc.).
   
   Note: You are able to print a check to mail to the vendor by selecting Print Check from the payment type. 
4. Click Post Expense when finished. 

STEP THREE - Track Your Vendor Markup Income 

You'll now post an income transaction to that same ledger for the amount you billed ($100 in our example above) in STEP ONE.  

In your Rentec Direct account: 

1. Within that same business ledger click +Post Income
2. Enter the total Amount of income you received (mark-up plus vendor cost). 
3. Choose the Income Category you wish to use. 
   
   System Advice: It is highly recommended that you create a separate set of categories dedicated to tracking your property management business income and expenses. This will allow you to pull reports of those categories separate from property expenses and tenant income. Instructions on setting up new categories can be found here: Setting Up Categories | Chart of Accounts
4. Add a Memo to track the details of the payment. 
5. Click the Post Income button to save.