How to Collect Money for Old Owners in FalconPro Real Estate Software

How to Collect Money for Old Owners in FalconPro Real Estate Software

Introduction

In real estate transactions, there are situations where property management companies collect money on behalf of previous property owners (old landlords) and later settle payments with them. FalconPro Real Estate Software simplifies this process by allowing businesses to track these collections accurately through the chart of accounts and receipt management system. This guide explains how to set up accounts, record collections, and process payments for old property owners using FalconPro Real Estate Software.

1. Setting Up an Account for Old Owners

To manage collected funds for previous property owners, you must create a dedicated account in FalconPro Real Estate Software.

Steps to Create an Account for Old Owners:

  1. Go to the Chart of Accounts
    • Navigate to Administration → Chart of Accounts.
    • Locate Creditors, which is at the same level as Suppliers.
  2. Create a New Account
    • Click on New.
    • Name the account (e.g., Collected for Old Owners).
    • Set this account under Liabilities, ensuring it tracks funds collected for old landlords.
  3. Save the Account
    • This account will be used to temporarily hold the collected funds until they are transferred to the old owner.

2. Creating a Fees Item for Old Owners

To properly categorize collections in contracts, FalconPro Real Estate Software requires creating a Fees Item linked to the newly created liability account.

Steps to Create a Fees Item:

  1. Go to Administration → Master Files → Accounts.
  2. Select “Fees Item” from the available options.
  3. Create a New Fees Item
    • Name it Collected for Old Owners (or a preferred name).
    • Set the Category as “Others”.
    • Link it to the “Collected for Old Owners” liability account created in Step 1.
  4. Save the Item
    • This ensures that when money is collected for old landlords, it is correctly categorized and does not mix with new property revenue.

3. Recording a Contract with Collected Amount for Old Owners

When creating a new contract for a building that had a previous owner, FalconPro Real Estate Software allows you to specify the portion of rent that belongs to the old owner.

Steps to Record the Contract:

  1. Create a New Contract
    • Set the Contract Start Date as the date the new ownership begins.
    • Define only the actual rent revenue that will be received by the new owner.
  2. Add a Line Item for Old Owner Collections
    • Select the Collected for Old Owners fees item.
    • Enter the amount collected on behalf of the old owner.
  3. Save the Contract
    • Now, FalconPro will separate the collected amount for old owners from the new rent income, ensuring financial clarity.

4. Processing Rent Collection and Allocating Payments

When collecting rent payments that include amounts for both the new owner and old owner, FalconPro Real Estate Software allows users to merge them in one receipt.

Steps to Collect Rent Including Old Owner’s Amount:

  1. Create a Receipt for Rent Collection
    • Go to Receipts and create a new entry.
    • Enter the total rent amount including:
      • The portion for the new owner (e.g., 15,000 AED).
      • The portion collected for the old owner (e.g., 3,000 AED).
  2. Specify Payment Mode
    • If the payment is made via a single check, enter the full amount under one check entry.
    • If multiple installments are received, specify them accordingly.
  3. Allocate the Collected Amount
    • Select Collected for Old Owners for the relevant portion.
    • Ensure that the new owner’s revenue is recorded under regular rental income.
  4. Save the Receipt
    • Once saved, FalconPro Real Estate Software will automatically credit the Collected for Old Owners liability account with the amount collected.

5. Settling Payments to Old Owners

After collecting money for old landlords, the next step is to transfer the collected funds to them. FalconPro Real Estate Software enables this via the payment module.

Steps to Pay the Old Owner:

  1. Create a Payment Entry
    • Navigate to Payments in FalconPro.
    • Select the Collected for Old Owners account as the payment source.
  2. Enter the Amount to Transfer
    • Match the amount collected (e.g., 3,000 AED) to ensure the account balance returns to zero.
  3. Save and Process the Payment
    • Once the payment is recorded, the liability account balance becomes zero, ensuring accurate financial tracking.

6. Financial Impact of Collecting Money for Old Owners

Tracking collections and payments using FalconPro Real Estate Software helps businesses maintain transparent financial records and ensures that:

  • ✅ The correct owner receives the due amount.
  • ✅ Rental revenue is correctly accounted for.
  • ✅ Liability accounts reflect accurate balances.
  • ✅ Payments made to old owners do not mix with business revenue.

By following these structured steps, businesses can avoid accounting discrepancies while handling ownership transitions smoothly.

Conclusion

FalconPro Real Estate Software provides an efficient solution for handling collections for old owners, ensuring proper financial management. By creating separate accounts, categorizing transactions correctly, and tracking payments, real estate businesses can ensure transparency and accuracy in their accounting practices.

FAQs

  1. Why do I need to create a separate account for old owners?
    A separate liability account ensures that collected funds for previous landlords are correctly recorded and do not mix with revenue.
  2. Can I use one check to collect money for both the new and old owner?
    Yes, FalconPro allows users to merge both amounts into one receipt, ensuring proper allocation.
  3. What happens if I forget to transfer the old owner’s amount?
    The collected amount will remain in the Collected for Old Owners liability account until it is paid, preventing incorrect reporting.
  4. Can FalconPro Real Estate Software generate reports on old owner collections?
    Yes, users can generate financial reports to track how much has been collected and paid to old landlords.
  5. How does FalconPro ensure financial transparency in ownership transitions?
    By keeping old owner collections separate from new owner revenue, FalconPro Real Estate Software maintains accurate financial records and ensures compliance with lease agreements.

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