Konnexsion Property Manager

When you start using Konnexsion as your accounting system, you need to record your property balances to set up your accounts correctly. This includes the property’s purchase cost, refurbishment costs, outstanding loans, and any updated property values.

If this sounds complicated—don’t worry! You don’t need to be an accountant. This guide walks you through each step, explains why it’s done, and keeps everything clear and simple.

Why Record Opening Balances?

When moving to Konnexsion, you don’t recreate every transaction you’ve ever made. Instead, you take a “snapshot” of your finances as they stand today.

If you don’t know the exact figures for your properties, ask your accountant. It’s important to get these right so everything ties back to your previous accounts.

When Should You Do This?

It’s best to set up your balances at the start of your company’s tax year.

• Make sure these numbers match the end-of-year figures from your old accounts.
• If you haven’t revalued your property before, don’t revalue it now. Start with the same figures for consistency.
• You can always revalue the property later by adding a separate journal in the current accounting period.

If you’re managing your properties through personal accounts, you would typically only record the property at its original purchase cost—no revaluation is needed.

Step-by-Step Process

We’ll use this example:

Step 1: Record the Property Cost and Loan

Here, we’re recording the original cost of the property, any refurbishment expenses that added value, and the loan used to finance the property.

What’s Happening Here?

• Fixed Asset (Property Purchase & Expenses): This records the value of the property and any costs that improve its value, like refurbishment.
• Long-Term Liability (Loan): If you borrowed money to buy the property, this records how much you still owe.
• Retained Earnings (Equity): This balances everything, because we’re not recording a bank transaction. It ensures the accounts “add up” without duplicating history.

Why Do This?

You’re setting up your property and loan so they appear correctly on your balance sheet. The property’s value is an asset, while the loan is a liability you still need to repay.

Step 2: Revalue the Property (Optional)

If the property’s value has increased since you bought it, you can update it to the current market value. This revaluation doesn’t impact your profits—it’s recorded separately in a Revaluation Reserve.

What’s Happening Here?

• Fixed Asset (Revaluation Adjustment): We’re increasing the value of the property to reflect its current market value.
• Revaluation Reserve (Equity): This “gain” is kept in a special account within equity. It’s not profit you can use—it’s just an adjustment to reflect the property’s worth.

Why Do This?

Updating the property’s value makes your accounts reflect its true market value. By recording it in the Revaluation Reserve, you keep it separate from everyday profits, which is required for compliance.

Step 3: Recognise Deferred Tax

When you revalue a property, a Deferred Tax Liability arises. This reflects the tax you might have to pay if the property were sold at its new value.

What’s Happening Here?

• Deferred Tax Liability (Long-Term Liability): This is a future tax liability based on the increase in the property’s value.
• Revaluation Reserve (Equity): The revaluation gain is reduced by the deferred tax to ensure only the net gain is shown.

Why Do This?

It keeps your accounts accurate and compliant with accounting standards, showing the future tax impact of the property’s revaluation.

Step 4: Categorise Your Assets and Loans

Konnexsion makes it simple by automatically linking accounting entries to your properties. You don’t need to create separate account codes for each property.

However, for better reporting, you can categorise your Fixed Assets and Loans:

Examples of Fixed Asset Categories:

• Residential Property
• Commercial Property

Examples of Loan Categories:

• Portfolio Loan
• Residential Loan
• Bridging Loan
• Private Loan
• Second Charge Loan

This helps you organise your accounts and makes it easier to analyse your property portfolio.

Final Table of Journals

Here’s the full summary of the journals you’ll need to set up your property in Konnexsion:

Why These Steps Matter

• Accuracy: Your property values and loans will appear correctly in Konnexsion.
• Compliance: Revaluation and deferred tax entries ensure your accounts follow accounting standards like FRS 102.
• Clarity: Categorising assets and loans gives you better visibility of your portfolio.
• Simplicity: Konnexsion links accounting entries to properties, keeping everything organised.



Final Note

If you’re unsure about any of these figures, ask your accountant. They’ll help you gather the right numbers and ensure everything aligns with your previous accounts.

With Konnexsion, setting up your property accounts is straightforward. By following this guide, you’ll have a clean, accurate starting point to manage your property portfolio effectively.

Ready to get started? Take control of your accounting today and let Konnexsion simplify your property management process. 🚀