Your conversion balances are basically a snapshot of your company's accounts on the date that you start using ShowHouse. These will define the state of play in terms of the various accounting balances on the new start date, e.g. the money in your bank account, the rent and charges due from tenants, the client monies held for payment out to landlords.
If you are a new agency starting from scratch your conversion balances will be zero so you won't need to worry about this.
You can set your conversion balances in the Accounting module via Accounting Codes > Conversion Balances. These balances can be obtained from your old accounting system as trial balances at the end of the day before you start using ShowHouse.
There are two steps to the conversion balance process.
- Set the conversion balances for your chart of accounts, obtained from your old trial balances.
- Provide a breakdown of the payments due to and from the agency on the conversion date.
Store the conversion balances for your chart of accounts
Obtain the trial balances for your chart of accounts exported from your previous accounting system on the day before you start to use ShowHouse. Enter the relevant values into the debit and credit columns as appropriate.
You may wish to get the assistance of your accountant or book-keeper for this stage of your setup. Your balances in ShowHouse will not be accurate until the conversion balances have been set accurately.
Set bank account opening balances
Bank accounts are a special type of nominal code, and these are listed at the top of the accounting code list. For each account you can specify the opening balance as of the conversion date. Do not enter negative values; instead enter the balance as in credit or overdrawn.
Define the breakdown of money owed to and from the agency
Now that you have specified the totals owed to and from the agency you need to provide a full breakdown of the rent, charges and payments which comprise these balances.
For example, if you specify that £10,000 is due from tenants in relation to rent, you will still not be able to receive those rent arrears until you know exactly who owes what.
Navigate to Accounting Codes > Historic Balances to see which of these conversion balances do not have the required breakdown to fully account for the balance specified, i.e. those which need more details of what the balance comprises. Click an account label to see the activity which has been defined so far.
Add rent due before the conversion date
If rent is due on a tenancy from before the conversion date, you can add a manual rent adjustment for the historic rent arrears. Either add individual records for each period which is outstanding, or enter a single rent arrears record. This tenant (and tenancy) will now have rent balances which can be paid as normal.
For example, on 1st August the conversion balance for the rent control account is £1000 and this is made up of £500 rent due from a tenant for each of the 2 months immediately prior to the conversion date, June and July. You can decide to either enter a single rent adjustment of £1000 covering "2 months outstanding rent", or you can enter 2 rent adjustments of £500 each for June and July. Both are equally accurate.
Add charges due before the conversion date
If charges are due from a tenant or property (landlord) from before the conversion date, you can add the relevant charges with the actual charge date. The system will warn you that you are adding an entry on a date prior the conversion date, but that's ok - that's what you are trying to do. Either add individual records for each charge which is outstanding, or enter a single charge record with a general description. These charges can now be paid as normal.
Add landlord balances from before the conversion date
If funds are available to pay out to the landlord in relation to rent collected prior to the conversion date, you can add this credit as an opening credit to the property. This balance will now be available to pay out as normal.