Scenario 1. Use the Deduction Fee called Third Party Payment. Fill in the Payee field with the name of the Advance Company to be repaid. When the deal is closed and paid out, Loft will generate a payable in Xero.
Scenario 2 - Advances provided directly to the Agent by your Brokerage.
There are 4 steps to take to complete an Agent advance.
- Create a bill for the Agent so you can pay the advance to them and assign the expense back to the Agent.
- Create a new invoice from the assigned expense to record the receivable from the Agent.
- Add an A/R deduction to the deal it relates to in Loft which will create a credit note to apply against the Agent's invoice in Xero.
- Apply the credit note to the invoice.
Step One: Go to Accounts / Purchases or Add New Bill.
Select or enter the following;
- Address of deal for reference
- Use Item number 1
- Enter the $ amount of the advance
- Click on the Assign expenses to a customer
Open the “Assign Expenses to a customer” option and select the Agent’s name.
Select 'Ok' and Approve the Invoice.
You can then cut a check or post a payment to this bill.
Step Two: Go to Accounts / Sales or Add new Invoice (You may create the Invoices to the Agents when the deals close or right away to see the outstanding balance as receivables)
In a few minutes, when you add the Agent's name to a new invoice, it will show you that there is an outstanding billable expense that can be added.
This link will also show in the draft version of the Agent's bill if you’d rather enter that line.
Click on that link.
Select the advance bill and select Add
If the account code does not show up in the invoice, re-add the item and it will refresh the account codes.
Enter the due date, a reference and confirm the amount. If you’d like to add the Advance Fee, you can add it as a second line with the item number XX.
You will see that the billable expense has been applied under the description.
Step Three: Add the deduction to the deal.
Go to the deal deduction page and add the deduction for Agent Expense Account. This will create a credit note for the $ amount you enter.
Step Four: Apply credit to the outstanding invoice for the advance or if you have added it to the general invoice apply it to the related invoice.
If the invoice is already created, then simply open the credit note, go to options and allocate credit. This will allow you to allocate to the O/S Balance.
If you have not yet invoiced, you can see a list of Items billed to Agents that have not yet been invoiced. You click on those links to create the invoice that you can apply the credit note from Loft.