How to record costs for a property

This article explains how to record costs for a property that you’ve added to an unincorporated landlord account in FreeAgent.

Please note that the unincorporated landlord account type is currently only available if you work with an accountant who is a FreeAgent Partner. You’ll need level 7 access or above to your FreeAgent account to follow the steps below.

If you have an unincorporated landlord account type and rent out a property, you can record costs related to the property by either explaining a bank transaction as a ‘Payment’ or creating an out-of-pocket expense or bill. Please note that recording the cost using more than one method will result in your cost being double or triple counted. Before entering this data, it’s a good idea to familiarise yourself with the difference between an expense, a bill and a bank payment in FreeAgent.

If you have received rental income from one of your tenants, find out how to record rental income for a property.

Explaining a bank transaction

If you’re explaining a bank transaction instead of creating an out-of-pocket expense or bill, navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop-down menu.

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Choose the relevant bank account from the list.

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Select the transaction that relates to the property costs.

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Select ‘Payment’ from the ‘Type’ drop-down menu.

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Select the relevant cost category from the ‘Category’ drop-down menu. You can create custom categories if you need to.

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Select the property that the cost relates to from the ‘Properties’ drop-down menu.

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Select ‘Explain Transaction’ to complete the process.

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If you have more than one transaction that you need to explain to the same cost category for the same property, tick the checkboxes to the left of the relevant transactions.

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Next, select ‘Payment’ from the ‘Type’ drop-down menu, select the relevant cost category from the ‘Category’ drop-down menu and select the relevant property from the ‘Properties’ drop-down menu in the panel on the right-hand side.

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Finally, select ‘Explain [X] transactions’ to explain all the selected transactions in the same way. Remember to include an appropriate description for the selected transactions. If you leave the ‘description’ field blank, the transactions will automatically be given the original descriptions from the bank feed import or bank statement upload.

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A record of the bank transaction(s) being explained will appear in your Audit Trail report.

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Creating an out-of-pocket expense

If the property cost was paid for using personal funds and you’re creating an out-of-pocket expense instead of explaining a bank transaction or creating a bill, navigate to the ‘Expenses’ tab at the top of the screen.

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If you’re creating your first out-of-pocket expense in FreeAgent, select ‘Create your first expense’.

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If you’ve already created your first out-of-pocket expense in FreeAgent, select ‘Add New’ in the top-right and select ‘Expense’ from the drop-down menu to create a new one.

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If you haven’t added a property yet, you can enter the property details in the ‘Add a Property’ section.

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Complete the relevant details for the out-of-pocket expense, including selecting the relevant property from the ‘Property’ drop-down menu and the relevant cost category from the ‘Category’ drop-down menu.

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Once you’ve completed the relevant details, select ‘Create New Expense’ at the bottom of the screen to complete the process. Find out more about how to create an out-of-pocket expense.

A record of the out-of-pocket expense being created will appear in your Audit Trail report.

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Creating a bill

If you’re creating a bill for the property cost instead of explaining a bank transaction or creating an out-of-pocket expense, you will need to add the supplier as a contact in FreeAgent before creating the bill.

Add the supplier as a contact

To add the tenant, navigate to the ‘Contacts’ tab at the top of the screen.

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Select ‘Add New Contact’ in the top-right and follow the steps for adding a new contact in FreeAgent.

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Create the bill

Next, navigate to the ‘Bills’ tab at the top of the screen.

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If you’re creating your first bill in FreeAgent, select ‘Create your first bill’.

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If you’ve already created your first bill in FreeAgent, select 'Add New Bill' in the top-right to create a new one.

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If you haven’t added a property yet, you can enter the property details in the ‘Add a Property’ section.

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Complete the relevant details for the bill, including selecting the relevant property from the ‘Property’ drop-down menu and the relevant cost category from the ‘Category’ drop-down menu.

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Once you’ve entered the relevant details, select ‘Create and Finish’ to complete the process. Find out more about how to create a bill.

A record of the bill being created will appear in your Audit Trail report.

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Find out how to view a breakdown of the costs allocated to a property and its overall profitability.

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