BE THE MASTER OF YOUR DEDUCTIONS
In this article, you’ll learn how to set up common fees and deductions for your Brokerage; additionally, we’ll walk you through each type your Brokerage might utilize, and the three areas you will have to set up when adding your fee. So, let’s dive right in!
Deduction Settings - This is the backbone of every deduction. *The❗items need special attention.
G/L Settings - Map your deductions appropriately.
Level/Range Settings - These are the levels you’re looking for!
INCOME TYPE FEES - These fees contribute to a Brokerage’s income and reporting.
These fees are the most common fees set up in Brokerages. They can be as simple as a single $ or % amount or can be set up as several levels/amounts.
Split Fee - % An income percentage fee created with 3 separate cap-level ranges.
Transaction Fee - $ An income dollar amount fee created with 3 separate cap-level ranges.
Team Deduction Fee - % or $ An income fee deducted for all agents towards a combined team fee and/or cap.
STANDARD TYPE FEES - Deductions that do not contribute to Brokerage income.
These deductions & fees typically are used to cover items like coffee, printing, admin, and desk fees.
E & O Fee - % A trackable liability fee for Errors & Omissions Insurance.
Consumables Fee - % or $ fee to cover a coffee, printing, or admin fee.
PAYABLE TYPE FEES - These deductions will be paid out to an outside source.
These deductions & fees typically are used to track and pay outside sources eg., GST, non-licensed referrals, etc.
Franchise Fee - % A portion of an Agent's commission will be tracked in a Liability account and based on current brokerage commissions.
Gov’t Garnishment - % This deduction creates a payable to an income garnishment owed.
Non-Licensed Referral - % This deduction fee creates a payable referral from an Agent’s commission to an unlicensed or third party referral.
Mentor Fee - % A portion of an Agent's commission will be paid to a mentoring Agent or the Brokerage.
Advance Recoverable - % This deduction recovers money owed to an agent’s equity advance company.
CREDIT TYPE FEES - These deductions create a credit note against an invoice in Xero. Typically created to recover Agent’s expenses covered by a Brokerage.
A/R Recoverable - % This deduction recovers money owed to the brokerage based on an agreed percentage of commissions.
REDUCE A/R TYPE FEE - This deduction reduces the expected receivable funds on a deal. (still have to film this, waiting on this to be fixed)