FlexiRent setup (best practice?)

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mrsKLB
mrsKLB Member Posts: 15 ✭
edited July 2020 in Accounts Hosted
Hi there, Recently we took out our first finance for the business, Flexirent 1. All PC gear etc. Yesterday we took out a 2nd one for a new piece of equipment & accessories. We also paid cash on the invoice for some other items not needed on the FlexiRent lease. How is the best way to set this up? Is it also possible to note the PC tech gear details, serials etc? & terms of the lease! Do I setup the 2 different contracts as different accounts? Or 1 account & 2 invoices? Do I track store or purchase, we purchased through Store A for both contracts. Please know that I haven't ever setup lease / finance so this is very new to me. I am also aware that some may suggest to ask my accountant how they want it setup, however I have elected to ask the 'group' (and I'm between accountants at this time). Many thanks in advance.

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  • John Graetz
    John Graetz Member Posts: 1,651 ✭✭✭
    edited July 2020
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    Hi mrsKLB.  Based on what you have stated and my understanding of how FlexiRent works, the following points are relevant:
    1.  You haven't actually purchased anything.  You might have have arranged the purchase but the goods were paid for and financed by FlexiRent.  In this respect, whilst the goods might have been listed on an invoice that you received, to me that must only be regarded as a record of a transaction.  You cannot claim back any GST on the cost of this equipment, because you are not the one who paid for them and you do no own them.
    2.  You could simply set up a single new expense account and call it "FleiRent".  Each monthly payment would be recorded under this expense account.  You don't need multiple accounts, just one will do.
    4.  My understanding is that each monthly payment will potentially include GST.  You need to check your contract so that you are aware what the monthly charge includes.
    5.  There is no point in setting up anything to track the store or purchase because you are not the one who has paid for the goods, so they are not yours,  You are only renting them.  You might want to record such things as serial numbers etc if you want a record of that.
    6.  At the end of the contract period, your contract will potentially allow you to purchase the goods at an agreed price, continue to rent them or hand them back if they are in good working order. Up to this point, there are no assets to track and no depreciation to account for because the goods in question are not yours - you are only renting them.
    Please be aware that my answer relates to my interpretation of the brief details that you have provided - it is not intended to provide financial advice, which you should obtain from your Accountant.
    John L G

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