Accounting Entries for Brokerage Other Income
Until July 2nd, 2019, if your Brokerage was in receipt of income designated as 'Other Income' on the allocations page, Loft would post two entries for accounting requirements to record the transfer of Other Income from one account to another.
From July 3rd onwards we will be updating that default to a single bill as most of our users are not transferring these funds between bank accounts. If you do use a commission trust account and would like to continue using the two entry system to automate the entries to record the other income transfer you can head to the settings page under the Brokerage Menu.
Just click the option called "Other Income Transfer" on the settings page under the Brokerage menu.
TWO POST ENTRIES - USED WHEN YOU PAY OUT FROM ONE BANK ACCOUNT AND NEED TO TRANSFER THE OTHER INCOME TO A GENERAL ACCOUNT
Bill Awaiting Payment: this would allow you to issue a check or payment if the funds were being moved to another bank account. This transaction clears the commission payable liability for the company that would have been set up on the deposit of the funds.
Receive Money Transaction: to record the 'Receive Money' transaction into the bank account, in order to reconcile the deposit against a transaction. This entry also records the credit to the revenue account you mapped to 'Other Income' in Loft.
We have received feedback that the Other Income is not regularly handled this way so we've cleaned up the journal entries for you. As long as you use the default Brokerage name when you create the allocation line for Other Income, Loft will post a single entry to record the reduced liability and the credit to your specified Other Income account.
We hope this helps keep your books as clean as possible :)
SINGLE POST SYSTEM - USED WHEN YOU DO NOT NEED TO TRANSFER FUNDS
Post July 3rd, 2019, Accounting Entries for Brokerage Other Income
A single bill will post in the Brokerage name that will not be payable, as it will post the debit to the commission liability but also the credit to your revenue line. This creates the correct accounting entries and automatically moves the bill from awaiting payment to paid. No intervention required!
*** Please note, if your deposit is received separately from the commission deposit, just go ahead and enter the deposit on the deal "Add Deposit" menu item.