Managing several accounting entities within the same legal entity.

Situation:

One association only, having 2 buildings and Operating for common areas.  It could be used for different situations.

The board wants to have the Balance Sheet, Revenue & Expense Statement, Budgets and reports independently

for all of them and global reports and financials also.

Operating

Building 1

Building 2

Global

To be able to produce such reports separately and globally, you must manage them separately and consolidate them into

a group of 'Accounting Entities'.  In the system, they will still keep the name 'Association' to maintain the same menus.

So, the 'Association' ''Building 1'' will be independent from the 'Association' ''Building 2" and so on… See them as

different companies.  Each transaction must balance within each accounting entity. You can't debit one and credit the other.

Best Method

You establish a budget for the global and its 'associations' will contribute regularly to the global as they do for their own building.

A pro-rata of the expenses that have to be split is established as a percentage of the global budget.

Example:

Building 1 contributes for 40% of the global needs.

Building 2 contributes for 60% of the global needs.

If the budgets for global needs is established at $100000, it means that the building 1 will have to contribute for $40000. Et.c

Establishing such percentages is a complex job but you will do it only once.  On the contrary, if you choose to split the

invoices one by one, you are going to do it all the times.

The contributions could be charged to each Building on a monthly, quarterly, semi-annually or annually assessment.

All global invoices will only be managed by the Global which has its own budgets and revenues.

This way, no need to complicate the bookkeeping.  Each accounting entity is independent.  You never split an invoice.

Everybody is charged for his common fees related to his building and has also a contribution to the global.

These contributions are established based on their rate of ownership within their own building (or any other way you want).

This is simple and you will have all reports and financials for each of the entity and globally if you want by creating a

group of associations what is very easy in the system.

Select the method you want.

If you do choose to split the revenues and expenses, we explain below how it can be done and what you must be aware of.

Numbering Accounts

We recommend to maintain (when possible) the same account number for the same kind of accounts.  When

consolidating, the system will consolidate all accounts having the same number in each of the associations being

part of the group.  So, use the same chart of accounts and number your revenue and expense accounts as

well as suppliers with the same number.

Examples:

Electricity expense account has the same name and account number in all accounting entities in the same group.

Maintenance Fees has the same name and the same account number in all accounting entities in the same group.

This way, they will be all consolidated together on the global reports.

All accounts having a different account number will be listed individually on reports and financials.

You could also have different numbers if you want them appearing on a specific line on the global reports.

However, the reports will be longer if you duplicate all kind of accounts (3 lines for electricity, etc.)

Don't forget that individual reports are produced also. There is no need to have them listed individually on global reports.

Bank Accounts

The best would be to have one bank account per association with a real bank account at the bank.

This will make the bank reconciliation a lot easier.

Budgets

All functions are the same for all associations.  Since you have a different association for each 'Building', they are

going to have their own budgets (revenues and expenses).  They are recorded in Financial Statements > Budgets.

Step 1

Create first the 'Operating' Association via the menu File > Association Management, then click on ''Add New"

Give it the name you want and click on the button ''Confirm''. The association will be created.

Answer 'Y' if you want to enter this new association immediately.

Use the menu File > Association Starting Wizard and creates all units, owners, tenants and other accounts.

Step 2

Create the other Associations ('Building 1' and ' Building 2'), using the menu File > Association Management.

After having clicked on ''Add New'', give the name you want to the new association (Ex. Building 1).

Then, select the option ''Create from Association'' and choose the association 'Operating' to serve as a model.

Step 3A (Executive version users, skip Step 3A)

PRO version

When choosing another association as a model, units and owners are not created automatically (PRO).

So, to benefit from units and owners and all other accounts already created in the 'Operating' :

After all the related associations have been created :

Go into the folder ''Operating'' (same place as all other Condo Manager association folders)

Right click and COPY the 'Operating.mdb' file (or the name you gave to this association).

Go to each of the other folders (Building 1; Building 2) :

- Delete the database file created automatically when creating the association. ('Building1.mdb'; 'Building2.mdb')

- Paste the file copied from the 'Operating' folder.

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