This page covers how to investigate positive and negative balances in reconciliations from a troubleshooting perspective. For a more general guide, click here.
The full reconciliation breakdown is accessed from Financials > Reconciliation, then clicking Reconciliation PDF in the top right.
It is advised to review any unknown negative and positive balances, using this article as a first step in troubleshooting. This will help to establish why these may show and how to resolve them.
Before proceeding, users should check that the reconciliation total matches the balance in their bank account as of the date this is being completed.
Users can expand sections on the reconciliation table by clicking the heading and clicking either:
The house icon to see balances against individual properties
The bank lines icon to view all transactions assigned to this section across the system.
Each section shows a total for all Client account bank lines and balancing payments (internal movements of funds), which have been assigned to the relevant subcategories.
1. Deposit balances
This section reflects anything assigned to the subcategories Deposit in and Deposit out.
If a deposit is received for a property and is assigned to Deposit in, it will show a positive balance for the value received. When paid out of the Client account, the debit is assigned to Deposit out, and the balance will be reduced to zero.
If positive balances are present, this indicates a balance is still in the Client account.
Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit associated with the deposit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the deposit funds can be reassigned by following these steps
If negative balances are present, this may mean that:
A transaction has been assigned to Deposit out against the incorrect property record.
Users can check the reference and date to establish if this transaction has been assigned to the property record in error. Users can then locate and edit these bank lines as outlined above.
The Deposit out transaction is for a larger amount than the Deposit in transaction.
Users should first check the total expected deposit amount. If they have transferred too much to the scheme, they can contact their deposit scheme provider or access their insured account to recoup the additional amount paid in error.
Users should check if the tenant has paid too little as a deposit and contact the tenant to pay the additional balance if required.
Users can check the tenant’s ledger to determine whether a portion of the deposit is assigned to holding funds error. They can then follow this process and transfer the balance out of holding funds.
Users can check the tenant’s ledger to determine if part of the deposit was assigned to rent in error. Then, they can follow this process to recoup the funds.
2. Float balances
This section reflects anything assigned to the subcategories Float in and Float out. These are float balances held on behalf of landlords.
If funds have been assigned as Float in against a property, the float balance section will show a positive balance. If this float is later released to the landlord to cover invoices or used directly to pay for invoices registered as float deductions, the debiting transactions will be assigned as Float out and the balance will reduce to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit associated with the float and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the float funds can be moved using a double entry
If negative balances are present, this may mean that:
A transaction has been assigned to Float out against the incorrect property record.
Users can check the reference and date to establish if this transaction has been assigned to this property record in error. They can then locate and edit these bank lines as outlined above.
The Float out debits are larger than the Float in credits.
Users can check to see if the total funds taken from the float are in excess of the initial float received. They will then need to retain a further float balance from the landlord to cover the excess.
Users can check the landlord’s ledger to see if the initial Float in payment has been incorrectly assigned to a different subcategory. If this is the case, they can edit the bank lines pertaining to the float payment as outlined above.
Users can check if a deduction has been registered on the Float deductions page in error. If the deduction has not yet been paid to the contractor, the user can delete this and repost it in the appropriate section. If the deduction has been paid, users will need to retain a further float balance from the landlord to cover the excess.
3. Landlord balances
This section reflects the total net income received for a landlord and paid out to them. It contains transactions assigned as bank lines to Landlord other income, Landlord other income (tax applicable), Offset rent and Rent in minus any deductions, fees and payments made to the landlord as Rent out.
If a transaction is assigned to Rent in against a property, it will show a positive balance for the net rent value after the management fee. When the landlord is paid, the debiting transaction will be assigned to Rent Out, and the balance will be reduced to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If negative balances are present, this may mean that:
The landlord has been paid too much on a previous payment run, which should also show as a negative balance on the landlord's ledger viewed in Lettings properties > Property balances.
The user can follow these steps to resolve this when the landlord is next paid.
Deductions in excess of the landlord’s available income have been purposefully included on the landlord’s ledger and have drawn this into a negative balance.
Users can contact the landlord to arrange payment to cover the outstanding negative balance or wait for the next rent payment to clear the negative balance.
A user has chosen to enable a feature that allows credit card or cash payments to be made to the landlord immediately upon receipt and before they are deposited in the Client account. If the user has not opted for this feature to be enabled, this cannot occur.
The user must ensure that all credit card or cash bank lines assigned to Landlord other income or Rent in are matched to corresponding client lines. This can be checked by clicking the pencil or padlock icon on the bank line and checking if the Matched ID section is populated with a bank line ID number. If these are not matched, the user will need to check their bank statement to establish if the funds did clear and, if so, if these have been assigned elsewhere in error.
4. Contractor balances
This section reflects anything assigned to the subcategories Landlord repayment of expense and Landlord expense and pertains to landlord deductions retained for and paid to contractors.
If a landlord expense is recorded against a property, it will show a positive balance as Landlord repayment of expense. When paid to the relevant contractor, the debiting transaction will be matched as a Landlord expense, and the balance will be reduced to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the funds can be moved using a double entry
If negative balances are present, this may mean that:
A transaction has been assigned as Landlord expense against the incorrect property record.
A user has chosen to pay an existing deduction to the contractor manually before receiving the funds from the landlord.
Users must process this deduction against the next rent payment during their landlord payment run by clicking Include ALL expenses.
A transaction has been assigned as a Landlord expense in error, when it should have been assigned as a Tenant expense or Cost of sales.
The user will need to locate this bank line and the invoice this pertained to, then edit the transaction to the correct subcategory.
A user has paid an invoice without first raising and processing this on the system.
Users should review the open and completed items in Financials > Landlord deductions to check if this invoice has been logged and processed through the system.
5. Total repayment of expenses
This section reflects anything assigned to the subcategories Tenant repayment of expense and Tenant expense, and pertains to invoices raised for tenants to pay directly or via their deposit at the end of their tenancy.
If an invoice is registered against a property and processed it will show a positive balance in Tenant repayment of expense for the value of the invoice. When this is later paid to the relevant contractor, the debiting transactions will be assigned as Tenant expense, and the balance will be reduced to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the funds can be moved using a double entry
If negative balances are present, this may mean that:
A transaction has been assigned as Tenant expense against the incorrect property record.
Users can check the reference and date to establish if this transaction has been assigned to this property record in error. Users can then locate and edit these bank lines as outlined above.
A user has chosen to pay a disbursement manually before receiving the funds from the tenant or their deposit at the end of the tenancy.
Once the funds are received, users must allocate them as Tenant repayment of expense or Deposit in and process this as normal.
A transaction has been assigned to Tenant expense in error where this pertained to a Landlord expense or Cost of sales.
The user will need to locate this bank line and the invoice this pertained to, then edit the transaction to the correct subcategory.
A user has paid an invoice without first raising and processing this on the system.
Users should review the open and completed items in Financials > Invoice for direct payment and Financials > Deposit deductions to check if this invoice has been logged and processed through the system.
6. Overpaid rent
This section reflects anything assigned to the subcategories Rent overpayment and Rent repayment, and pertains to rent that has been refunded to tenants where it was paid in excess of what was owed.
If a transaction is assigned against a property as Rent overpayment, it will show a positive balance for this value. When the funds are refunded, the debiting transaction will be assigned to Rent repayment, and the balance will be reduced to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the funds can be moved using a double entry
If negative balances are present, this may mean that:
A transaction has been assigned as Rent repayment against the incorrect property record.
Users can check the reference and date to establish if this transaction has been assigned to this property record in error. Users can then locate and edit these bank lines as outlined above.
The rent has been refunded to the tenant, but no funds have been assigned as Rent overpayment.
Users must locate the bank line showing the overpayment and click the pencil icon to assign the full amount to Rent overpayment or click the ID number to split the funds between Rent in and Rent overpayment.
If the overpaid rent has already been paid to the landlord, users can follow this process to recoup the funds into the Overpaid rent balance.
7. Holding funds
This section reflects anything assigned to the subcategories Holding funds in and Holding funds out and pertains to holding funds paid in by tenants of specific property records.
If a transaction is assigned to a property as Holding funds in, it will show a positive balance for this value. When it is either refunded or moved via a double entry, the debiting transaction will be assigned to Holding funds out and the balance will reduce to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the funds can be moved using a double entry
If negative balances are present, this may mean that:
A transaction has been assigned to Holding funds out against the incorrect property record
Users can check the reference and date to establish if this transaction has been assigned to this property record in error. Users can then locate and edit these bank lines to reflect the correct property record.
Too high a balance has been taken from the holding funds ledger.
Users can check the total amount of Holding funds received against the property for this tenant to establish if an error was made at the point of payment. If necessary, they will need to contact the tenant and have them pay the remaining balance owed.
There is no balance present in Holding funds in, meaning the credit has been assigned to a different subcategory or property in error.
Users should check their bank statement to identify when the payment was made and search for this in SME Professional before clicking the pencil icon and changing this to the relevant category and subcategory.
8. Withholding tax
This section reflects anything assigned to the subcategories Withholding tax – from landlord, Withholding tax – refund to landlord and Withholding tax – to HMRC. These pertain to overseas landlords and Non-Resident Landlord (NRL) tax.
If withholding tax is deducted from the landlord balance of a property, this value will show as a positive balance in Withholding tax - from landlord. When it is either refunded to the landlord or paid to HMRC, the debiting lines will be assigned as either Withholding tax – refund to landlord or Withholding tax – to HRMC and the balance will reduce to zero.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
If negative balances are present, this may mean that:
The payment to HMRC has been made and assigned in bulk instead of split and apportioned to the different records.
Users can locate this transaction to split and assign this to the different property records.
A transaction has been assigned to Withholding tax – to HMRC or Withholding tax – refund to landlord in error.
Users can check the reference and date to establish if this has been assigned to this property record in error but pertains to another. Users can then locate and edit these bank lines to reflect the correct property record.
9. Business float
This section reflects anything assigned to the subcategories Business float in (loan), Business float in (rent) and Business float out, and pertains to business or miscellaneous funds held temporarily in the Client account.
If funds are transferred into the Client account and assigned to either a property or the business as Business float in (loan) or Business float in (rent), it will show as a positive balance for this value. When it is either transferred back out or used to cover expenditure, the debiting lines will be assigned to either a property or the business as Business float out and the balance will reduce to zero.
As funds can either be assigned by category to a property directly or to the business, users should assign both the credit and debit to the same category to ensure these reflect correctly in this reconciliation section.
If positive balances are present, this indicates a balance is still in the Client account. Where a user believes that a positive balance should not be present here, they should review the system transactions in this section and compare them to payments in their bank statements to establish if there is a missing debit or if the credit was assigned incorrectly.
To identify and change incorrectly assigned lines:
Navigate to Bank > View bank lines
Select Change date range and filter to the appropriate date as per the bank statement
Select the Type dropdown in the top left corner and choose Client account
Locate the incorrect debit or credit and edit as required since it may be assigned to the wrong category or subcategory
If the bank lines are locked, the funds can be moved using a double entry
If negative balances are present, this may mean that:
The credit and debit have been assigned to different categories (eg a specific property and the business).
Users can check the reference and date to establish if this transaction has been assigned to this property record or against the business in error. Users can then locate and edit these bank lines to reflect the correct category.
A transaction has been assigned here without funds being held in the account.
If the business is to cover this, the user will need to transfer the funds from the current account to the Client account and assign the credit as Business float (loan).
If funds are to be deducted from a landlord’s balance, the user must go to Financials > Landlord deductions and create a Business float (loan) deduction for the amount to charge to the landlord.
10. Suspense account
This section reflects anything assigned to the subcategory Suspense account, a subcategory to which credits and debits can be attributed.
The suspense account should temporarily hold unidentified funds. Once funds are identified, they can be reassigned via a double entry from here.
If a positive balance is present here, there may be an unidentified credit currently assigned to the subcategory Suspense account. The user will need to investigate this to find out what it pertains to, then locate the transaction in bank lines and reassign this to the correct subcategory using a double entry.
If a negative balance is present here, there may be an unidentified debit currently assigned to the subcategory Suspense account. The user will need to investigate this to find out what it pertains to, locate the transaction in bank lines and reassign it to the correct subcategory using a double entry.
If there are many different transactions in this ledger, it can be exported by clicking the icon against it on the reconciliation table and clicking to export it as a CSV from the new page. The user can then identify any balance that does not directly contra another. They can then find what this pertains to and reassign as explained above.
11. Internal transfer
This section reflects anything assigned to the subcategory Internal transfer, a subcategory to which credits and debits can be attributed.
Internal transfer should contain only transactions transferred between accounts uploaded to SME Professional.
For example, a user may transition from their original Client account (A) to the new Client account (B) and manage both on SME Professional until the first account can be closed. If the user transfers a balance from A to B, the debit and credit would be assigned to Internal transfer and net off at zero.
A negative balance here indicates that a user has assigned something to this subcategory in error.
If there are many different transactions with a record in this ledger, it ledger can be exported by clicking the icon against it on the reconciliation table and clicking to export it as a CSV from the new page. The user can then identify any balance that does not directly contra another. They can then find what this pertains to and change the category and subcategory.