Contract Journal Voucher (JV) Steps in FalconPro Real Estate Software: Complete Accounting Workflow
Introduction
Accurate contract accounting is fundamental for real estate businesses to ensure financial transparency and compliance. FalconPro Real Estate Software streamlines this process with a robust system for managing contract journal vouchers (JVs), revenue recognition, collections, and discounts. This guide details the step-by-step workflow for handling contract JVs in FalconPro Real Estate Software, ensuring property managers and accountants in the UAE can maintain precise records and generate reliable financial reports.
Understanding Contract Journal Vouchers (JVs) in FalconPro Real Estate Software
Contract JVs are the backbone of lease accounting in FalconPro Real Estate Software. They automate the recognition of unearned and earned revenue, track customer balances, and ensure every transaction is accurately reflected in your accounts.
Step-by-Step: Contract JV Workflow
1. Creating the Leasing Contract and Initial JV
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Activate the Contract:
After creating a leasing contract, activate it in FalconPro Real Estate Software. -
Preview the Voucher:
Click “Preview Voucher” to review the accounting entry. The system will show:-
Debit: Customer account (total contract value)
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Credit: Unearned revenue account (total contract value)
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Post the JV:
Once verified, post the JV. This locks the entry and sets the foundation for subsequent revenue recognition.
2. Monthly Revenue Recognition
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Automated Revenue Posting:
Each month, FalconPro enables you to transfer revenue from unearned to earned (rent revenue) accounts. -
Process:
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Go to the rent revenue module at the start of each month.
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Review the suggested vouchers for the period.
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Select and post the vouchers, which will:
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Debit: Unearned revenue
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Credit: Rent revenue
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Note:
This process is independent of actual rent collection; it is based on the contract’s timeline and ensures monthly revenue is recognized correctly1.
3. Collection and Receipts
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Recording Payments:
When a tenant makes a payment (cash, cheque, or transfer), create a receipt voucher. -
Accounting Impact:
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Debit: Cash/Bank account (or relevant payment method)
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Credit: Customer account
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Result:
The customer’s balance is reduced. When all payments are received, the customer account reaches zero, reflecting full settlement1.
4. Handling Additional Fees and Contract Fees JVs
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Other Fees (e.g., commissions, admin, security):
If collecting fees not tied to main rent installments, use the “Contract Fees JV” option. -
Process:
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Preview the voucher to confirm:
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Debit: Customer account
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Credit: Relevant fee or VAT account
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Post the JV to record the obligation, regardless of payment status.
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5. Applying Discounts
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Discounts at Contract Start:
If a discount is granted upfront, FalconPro handles it as part of the customer account, but revenue recognition remains unchanged. -
Discounts During Contract:
For mid-term discounts or waivers:-
Use an “Adjusting Receipt” with payment type set to “Adjusting.”
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Select the discount account (under expenses) for the debit side.
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Enter the amount and remarks (e.g., “discount”).
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Save the receipt.
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Result:
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Debit: Discount expense account
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Credit: Customer account
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The contract shows as paid, but the discount is tracked separately1.
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Alternative (Not Recommended):
You may, if required, reduce revenue directly by debiting the property revenue account and crediting the customer account, but best practice is to use the discount account for transparency.
6. Merging and Adjusting Payments
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Merging Installments:
If multiple installments are settled together, select and merge them in the receipt screen. -
Adjusting Receipts:
Choose “Adjusting” as payment type, specify the discount or other adjustment account, and process as above.
Best Practices for Contract JVs in FalconPro Real Estate Software
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Always review and post JVs after contract activation and before recognizing revenue.
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Use the rent revenue module monthly to ensure earned revenue is recognized on schedule.
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Track all discounts through the discount expense account for clear financial reporting.
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Avoid reducing revenue directly unless required by specific accounting policies.
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Maintain a clear audit trail by entering remarks for all adjustments and discounts.
Conclusion
Contract journal voucher management in FalconPro Real Estate Software is designed for accuracy, compliance, and efficiency. By following the outlined steps-creating and posting JVs, recognizing revenue monthly, recording collections, and handling discounts-you ensure your real estate accounting remains robust and auditable. Leverage FalconPro’s automated workflows to streamline your contract accounting and deliver reliable financial insights to your stakeholders.
Frequently Asked Questions (FAQ)
Q1: What is the purpose of the contract JV in FalconPro Real Estate Software?
A: It records the total contract value as a receivable (customer debit) and unearned revenue (credit), forming the basis for future revenue recognition.
Q2: How is monthly rent revenue recognized?
A: Each month, unearned revenue is debited and rent revenue is credited, reflecting the portion of revenue earned for that period, regardless of collection.
Q3: How do I handle discounts given to tenants?
A: Use an adjusting receipt with the discount expense account. The contract will show as paid, and the discount will be tracked separately.
Q4: Can I merge multiple installments into one payment?
A: Yes, select the installments and merge them in the receipt screen, then process the payment or adjustment as needed.
Q5: Should I reduce revenue directly when granting discounts?
A: Best practice is to use the discount expense account for transparency; direct revenue reduction is not recommended unless required by policy.