Processing transactions through Loft automatically generates the accounting entries in QuickBooks Online. The following descriptions show you the results of Loft activities in your accounting records.

Deposits

When you post a deposit as a receipt in Loft you will see a bank deposit posted in QuickBooks Online. All Loft transactions will be posted with a link to the deal in the Loft application in the memo field so you can copy and paste the url to view the details for the deal.

If you choose to request the funds via invoice for the deposit Loft will then post an invoice to the contact name you enter on the deposit page. 

You are also able to track entries by the office of the Agent it is associated with if you're tracking by department or uses classes on each transaction line. 

This entry debits the bank account selected and posts the credit to the offset liability account you specify during the initial setup. Generally, for the Trust/Escrow funds the credit is allocated to the Trust liability account. For commission or general accounts the credit is allocated to commission payable. You will be able to reconcile the bank entry to transactions when it comes through the bank feed.

Transferring Funds From an Escrow or Trust Account

When you transfer money between your bank accounts in Loft, we create two entries. This will allow you to match the transactions to the bank feed transactions to reconcile your bank accounts. 

One, to record the transfer out of one account and the second, to record the deposit to the receiving bank account. The following screenshots show the entries made when transferring funds from a Trust account to a Commission Trust Account. You will need to transfer the actual funds through your online banking system. Loft produces a transfer report to show you the amounts transferred between bank accounts to summarize the activity.

1.We create a bill to be paid in the name of the Brokerage that will debit the liability account specified on set up.

2. We then create a bank transaction to record the deposit to the receiving bank account which will debit the bank account and credit the specified liability account. 

Payments to Outside Brokers or Internal Agents

Under some area regulations, payments made to external Brokerages or companies will be released from the Trust/Escrow account. Loft gives you the option of letting us know which bank account you would like to use for various payments. We’ll help you get it set up the right way during the initial onboarding.

As part of on boarding we will set up various deductions and split fees that apply to your agents. Each deduction type is set up with a corresponding general ledger account (s). You can also specify if a deduction is payable, Loft47 will create a bill for the amount to be paid out.

Agent Payout Details

Loft will record the following details in an Agent payout.

1. Total commissions earned and the associated expense whether it is an Outside Brokerage or your Agent getting paid those commissions. ** As a check and balance these two should always net to $0.

2. Each standard or income producing fee or deduction from commission will also post a credit to their allocated general ledger accounts.

3. Loft will post a debit, equal to the fee credited, to the mapped liability account that is credited when funds are deposited. (see bank deposits and transfers above ^^)

4. The net pay for the Vendor is then also debited from the mapped liability account which results in the AP balance payable to the Agent. 

Bill produced in QuickBooks

Corresponding pay stub in Loft

The bill posting will create the payable entry so you can pay via check or one of the many digital payment solutions that integrate with QuickBooks Online. You will find these transactions under the Expenses menu. 

TRANSACTIONS ASSOCIATED WITH THE AGENT PAYOUT

Automated Income Transfers

Loft will automatically move the portion of funds that is considered Brokerage income and or future liabilities of the company to the designated bank account in which income is held. This amount is generally the total of all the deductions taken from the Agents commissions. Once you post the Agents payout you will see the automated income paid payout and income earned payout. This transfer happens in the same way we post the regular transfers unless the bank accounts are the same and/or the liability accounts are the same. Generally you'll see one bill to be paid to mark the release of funds from one bank account and a deposit to the receiving bank. 

Deduction types and how they post to the accounting system

1. Income and Standard type fees will be included in the bill to the Agent. 

2. Payable type creates a new bill to be paid to the Payee assigned on the deduction page or in the master deduction, so you will not see that in the journal entry on the bill.

3. Paid at the Table creates a payable line in outgoing CDA correspondence, you will not see that journal entry on the bill. 

4. Credit type creates a credit memo to the Agent’s Customer contact that can be applied against their outstanding invoices. 

5. Reduce AR type fees do not post financial transactions, they simply reduce the expected AR (funds expected) and, thereby, reduce the commission payable for that transaction.