Propertyware Knowledge Base

• As of 5/12/2012, the Retained Earnings account allows for true GL account activity in addition to virtual account activity. It presents a virtual "current year earnings" account, then looks for GL account transactions to that account and adjusts the displayed balance by the amounts of those transactions. This functionality has been implemented in the following areas of Propertyware:

• Balance Sheet Standard
• Balance Sheet Detailed
• Trial Balance

• Also as of 5/12/2012, the General Ledger report now displays all detailed transactional account activity to the Retained Earnings account.

Retained Earnings Reporting in Propertyware

Retained Earnings represents the accumulation of net income that is not paid out to owners.  While our existing Income Statement and Balance Sheet display accurately for specified dates, it is not always possible to match those balances to the General Ledger.  This is because currently, the General Ledger maintains an ongoing balance in the Income and Expense accounts from year to year, not showing the accumulation of the retained earnings. To implement an improvement in our GL account reporting, you will see the following changes:

• Income accounts will automatically close to a zero balance on the first day of a new fiscal year. This will be done with an automated entry that will debit the income accounts and credit the Retained Earnings account.
• Expense accounts will automatically close to a zero balance on the first day of a new fiscal year. This will be done with an automated entry that will credit the expense accounts and debit the Retained Earnings account.
• You will be given an option in the Chart of Account setup for Equity accounts such as Owner Draws and Owner Contributions, to be zeroed out with an automated entry at year end. 

These journal entries will not be visible when running the GL report within a fiscal year, but if the date range crosses the fiscal year start/end date, you would see a “Xfer to RE” journal entry as of the first day of the fiscal year to zero out the year-end balance.  

Other related changes to the General Ledger, Trial Balance, Balance Sheet and Cash Flow reports will  ensure that Propertyware delivers data you can count on to meet all your accounting needs,  even the less common accrual basis with non-calendar fiscal year.    

Q:  Does this create an actual journal entry?

A:  No.  This is only a view on the report that pulls data for the date range selected at the time you run the report.

Q: What happens when you receive a payment in one month and apply it to a charge in the prior month?

A:  This transaction will not be impacted by these reporting changes.  You will have the option of viewing reports on either a cash or an accrual basis, which will change the report results.  In a cash basis, the income from the prior month will not be reported as income until received (the actual month).  In an accrual basis, the income will show when the charge was due (the prior month).  This is only a reporting option and does not impact the actual transactions.

Q:  Will the equity account adjustments be applied automatically?

A:  This is an option but you would have to set it up in the Chart of Accounts.

Q:  Will these changes affect prior years reporting?  

A:  Yes, but again, you have control over how you want to view the reports.

Q:  Does this affect syncing with QuickBooks?

A:  Nope, it is business as usual with your sync.