There are two methods available for handling the accounting in the current liability section of a set of accounts for a trust. These options have implications for how you generate special purpose reports from the LodgeiT Reporting module.

Option A- Reflect only the closing balance of the beneficiaries (watch the video)

Pros - 
  • Simple to handle in accounting software
  • Less line items mean less confusion for novice users
Cons - 
  • More tedious in the LodgeiT Financial Reporting module
  • Won't support automated post-back method

Option B - Reflect all sub-accounts for the beneficiaries, including share of profit, capital introduced and drawings  (watch the video)

Pros - 
  • No need to make any manually value entries in LodgeiT
  • Provides granular account detail i.e. profit reflects in a profit account
  • Supports automated postback (coming to LodgeiT soon).

Cons - 
  • More tedious in the accounting software (unless there is auto-postback functionality from LodgeiT)
  • Requires adjusting entries to move prior year balances to an opening balance account for each partner