Letting Agent Accounts

Options
bigmuggsy
bigmuggsy Registered Posts: 92 Regular contributor ⭐
in General accounting discussion
Hi

Got a client who is a letting agent, limited company. Have done the accounts however do I treat the difference between what they have received from tenants and paid to the landlords as turnover or is it simply a case that the turnover is the whole amount received.

As an example client receives £600 from tenant, retains £100 as the fee and pays £500 to landlord. Is the turnover therefore the £600 received or the £100 fee retained?

Any help appreciated.

Thanks

Comments

  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
    Options
    Well,

    I would say the fees generated i.e the £100 is the turnover,

    Depends though i suppose on who the contract lies with the agent or the landlord, if the contract lies with the agent the £600 is due to the agent not the landlord and there is a seperate contract between the agent and the landlord for the transfer of the rest of the rent, which would effectivly be a cost of sale..... not 100% sure that is correc though.
  • lorraine
    lorraine Registered Posts: 404 Dedicated contributor 🦉
    Options
    slackda wrote: »
    Well,

    I would say the fees generated i.e the £100 is the turnover,

    Depends though i suppose on who the contract lies with the agent or the landlord, if the contract lies with the agent the £600 is due to the agent not the landlord and there is a seperate contract between the agent and the landlord for the transfer of the rest of the rent, which would effectivly be a cost of sale..... not 100% sure that is correc though.

    I would have said £600.00 is the t/o and then less the £500.00 which is a cos leaving £100 as gross profit.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Options
    I have never known a letting agent to act as principle rather than agent so I would agree with Slackda's first assertion.

    The £100 is the turnover.
  • lorraine
    lorraine Registered Posts: 404 Dedicated contributor 🦉
    Options
    Okay, sorry I misunderstood!
  • bigmuggsy
    bigmuggsy Registered Posts: 92 Regular contributor ⭐
    Options
    Thanks for your help, much appreciated

Categories

Privacy Policy