Adding Referrals for Non-licensed Third Parties

Adding Referrals for Non-licensed Third Parties

If a referral is made to a third party that is not a licensed Agent or Brokerage you will be using the "Payable" deduction accessible through the deductions menu. 

Most users set this up as a payable type and name it "Third Party Referral". This will distinguish it from the workflow for licensed parties. 

Licensed Agents or Brokers need to be added to the people page and given an allocation of the commissions for the transactions. See This article for details. 

To add an pay out a third party follow these steps;

  1. Ensure there is a Brokerage template deduction set up for third party referrals. - The screenshots below are provided as examples.



















2. On the deductions page in the deal select "New" and "Third Party Referral"

3. Enter the name of the payee, the dollar or percentage applied and hit UPDATE to recalculate the balance payable to the agent. 

You can either pay directly via Payload or process the payout to the agent as usual under the Payout Commissions tab.

If you choose to send the payout through to the accounting side, you will see two resulting “Bills Awaiting Payment” in Xero or QBO — one for the agent and one for the payee listed in the deduction line.

You can then pay the third party using your preferred method, such as issuing a cheque or any other payment method you normally use.


Q: How do I handle a referral fee where the tax portion is remitted by the brokerage instead of the agent?

A: Scenario

A Canadian brokerage pays a $4,000 referral fee to a non-tax-collecting recipient. The associated GST/HST amount (for example, $200) could be remitted by the brokerage rather than by the agent.

Solution

Create an additional Standard Deduction on the deal's deduction page (for example, "Company Tax for 3rd Party Referrals").

Configure this deduction to map to your brokerage's GST/HST Payable (or tax collected) GL account in your accounting system. This allows the tax amount to be retained by the brokerage while the referral recipient receives only the referral amount.

Example

  • Referral Fee: $4,000

  • GST/HST Portion: $200

  • Additional Standard Deduction: $200

  • GL Mapping: GST/HST Payable (Tax Collected) Account

Once the deal is paid, the $200 tax deduction will be posted to the designated GST/HST payable (tax collected) GL account. This ensures the tax portion is retained by the brokerage and tracked separately from the referral payment, making it available for remittance as part of the brokerage's regular GST/HST filing process.

For detail Manual Monthly Journal Entry Adjustment - Quickbooks Online - https://support.loft47.com/portal/en/kb/articles/quick#Step_1_Pull_Report

Accounting Consideration

The deduction records the tax liability in Loft. Your brokerage will still need to complete the appropriate accounting entries and include the amount in its regular GST/HST filing process (monthly, quarterly, or annually, depending on your filing schedule).