Can we use Palace to handle our Sales Trust?

Question:

Can we use Palace to handle our Sales Trust?

 

Answer:

Palace is primarily a property management trust accounting system. Where a user has a small amount of sales transactions to be processed through the same or a separate trust account as the property management transactions, the following notes apply.
Please Note: If you do a large turnover of sales transactions, then Palace is generally not recommended.
Limitations
 Palace cannot send sales listings to websites for advertising purposes
 Palace has no report showing sales listings available

There is no automatic check on how long deposits have been held before settlement, however a reminder can be set up in the property diary when settlement date has arrived.
Remember: you also need to Reconcile the Trust Account at least monthly and you must roll your month off.
These instructions are found in Help Files called Bank Reconciliation and Month End.
Setting

Using Palace to handle Sales Transactions

Palace is a property management trust accounting system. Where a user has a small amount of sales transactions to be processed through the same trust account as the property management transactions, the following notes apply. If the user has a separate trust account for sales transactions, Palace is not recommended.

Sales Listings

To list a property for sale:

  • Add a new Owner record and place it on Hold to ensure this owner is not included in rental payment batches.
  • Add a new Property record and set the Fee %’s to zero to ensure no commission is applied to receipts. The property record has a data field for Market Value of the property.

 

Limitations:

  • Palace cannot send sales listings to web sites for advertising purposes
  • Palace has no reports showing sales listings available.

 

When an agreement is signed

  • Add a Tenant to the property as the purchaser - use a zero rent rate and set the end date to the paid to date (one day less than the start date)
  • Process a transaction “Charge Tenant Debit” to raise a charge to the purchaser for the deposit amount.

 

When purchaser gives a deposit

  • Use transaction “Receipt Tenant Other” (comment to include “Deposit on purchase”). The receipt will show the money coming from the purchaser (tenant), and is held in the owner’s account.

 

To print a settlement tax invoice

  • Owner Diary – Correspondence
  • Use template “PALS - Tax Invoice for Deposit less Commission” (This relies on the purchaser having  being entered as a tenant under the property)
  • Enter commission and GST amounts as well as the amount due.
  • Print

 

When deal is settled.

  • Raise a transaction “Charge Admin Fee” using a Ledger account called sales commission
  • The Amount of the charge excludes GST, but must be the LESSER of deposit or total commission amount (including GST)
  • If owner still has a balance, Payment Owner can be used to pay out the balance to owner’s solicitor.

 

When the sales commission amount is to be drawn from the trust account

  • Check the commission amount and GST amount entered on the tax Invoice diary entry
  • Use Transaction “Payment Ledger” from the Commission Ledger for the commission component
  • Use transaction “Payment Ledger” from the GST Ledger for the GST amount.
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