AccountingConsiderations

Before you can start collecting data and entering it into the system there are some decisions that must be made up front.

What do you want from the system?

Determine your financial reporting needs. Do you want consolidated, summarized or very detailed statements? You may wish to discuss your reporting requirements with Spectra Support either by phone, 866-718-2345 or you can submit a ticket by email at: Support@Spectra.ca

Will you be using the sample Chart of Accounts supplied?

The first thing you must decide on is a General Ledger Chart of Accounts. SPECTRA is pre-loaded with a sample chart of accounts. You may modify the sample or create your own sample chart of accounts.

In SPECTRA each property or building has its own Chart of Accounts. These do not all have to be the same, although we think it is to your advantage to design a company-wide G/L Chart of Accounts, and then just use the account numbers required for your residential or commercial buildings. Here are some rules and suggestions:

• Charges to tenants are done using Accounting Codes, and the G/L account numbers for these Regular Charge codes should be the same in all buildings. E.g. If you charge tax to your tenants, whether it be federal, state/provincial or city, the G/L account # must be the same for all buildings that tenants are being charged tax.
• Do not mix G/L account numbers of a different number of digits and do not start any account numbers with zero. If you decide on using a 4-digit account number, all account numbers for that building must have 4-digits. If you use a 5-digit chart of accounts, all account numbers must have 5-digits, starting with 10000. Do not mix 4- and 5-digit account numbers in the same building.

Control Codes

The G/L Chart of Accounts and Control Codes work together. The Accounts Receivables in SPECTRA is based on Accounting Codes. Each time you make a tenant transaction you will be asked for an accounting code. There are Regular Charge codes, Payment codes, and Vacancy codes. Each code is linked to a GL account number. For example, let’s say you have a Regular Charge code called "Residential Rent" and the code is linked to G/L account number 3000. Each time you use this charge code the system knows to credit G/L account 3000 in the G/L. There are some standard control codes already set up and linked to the supplied sample chart of accounts. Some Tenant Receivable reports will print a summary by code at the bottom of the report.

What accounting method will you use – cash or accrual?

Cash accounting records a tenant’s rent as income when the tenant has actually paid the rent. Accrual accounting records the rent as income when it is charged to the tenant. If you are unsure of which accounting method to use, ask your accountant. This question will be asked when you are in the Property Wizard setting up your properties. The only way this can be changed after the fact is as a billable service through Spectra Support.

Will you be using Trust Accounting?

It is important to emphasize here that we are talking about individual bank accounts, not the physical location of the bank. If you have 20 accounts with the National Bank to manage 20 buildings, then you are not doing trust accounting. If you have one account (for which you receive one bank statement) to manage those 20 buildings, then you are using trust accounting. Please refer to the help file on Trust Accounting.

Are your current records up to date?

Are your current records up to date and accurate? With whatever method you currently use (manual books or accounting software), the more current and accurate your records are, the better organized you will be for starting SPECTRA.

What will be your starting date?

You may want to consult with your accountant as to what starting date to use for your SPECTRA implementation. If your starting date will be September 1st, you will need:

• General Ledger account balances – by building – as of August 31st
• List of Receivables by tenant as of August 31*
• List of Payables by supplier as of August 31*
• List of Tenant Security Deposits plus accumulated interest by tenant as of August 31

* If you are using Cash Accounting, you will need the individual details of each balance outstanding.

Taking the time now to determine exactly how you want your system set up will go a long way in ensuring a successful implementation of SPECTRA.