Activating a Client Account as a Financial Entity

Before REDA Financials can post a single figure for one of your clients, that client needs its own set of books. In REDA that is a one-checkbox job: mark a client account as Financial Active and REDA automatically creates a matching accounting Entity — the ledger container the accounting side posts into. But the checkbox only fires when a few things are already in place, and the Entity it creates arrives half-configured: it can receive posted invoices immediately, yet the property-management features (tenant payments, management fees, owner draws) each need a default or two set on the Entity before they will run. This guide is for the implementing admin or owner-services lead onboarding a landlord — or your own property-management firm — into accounting. By the end you will know which accounts to activate, how to satisfy every prerequisite, exactly what the auto-created Entity looks like, and how to complete its configuration field by field so nothing "skips" this client later.

What a financial entity is, and which accounts need one

Think of an Entity as a ring-fenced ledger for one party's money. When you manage properties on behalf of several landlords, each landlord's rent, fees and draws must stay in that landlord's own books — never mingled with another owner's, and never mingled with your firm's own operating money. An Entity is how REDA keeps them apart: every accounting document is stamped with the Entity it belongs to, and reports are drawn per Entity.

Not every account needs its own books. The rule is simple — activate the accounts that own a ledger (the ones that receive accounting documents in their own name) and leave the rest as ordinary accounts. Tenants and vendors are named directly on documents as the customer or the payee; they never need a set of books of their own.

Before you activate: the prerequisites

Checking Financial Active is the trigger, but REDA will only build an Entity when the account already qualifies on four counts. Miss any one and the box can sit checked with no Entity ever appearing — so it is worth confirming all four before you click.

What activation creates

Activation is a single action with an automatic consequence. The instant you check Financial Active on a qualifying account and save, REDA builds an Entity for it and fills in the essentials from the account and its region. There is nothing to key in on the Entity — it arrives ready:

Because the Entity Code and currency come straight from the account and its region, set the Account Code, Region and Territory before you activate, so the new Entity carries exactly what you intend. The Accounting Basis (Accrual) and Fiscal Year Start Month (January) are fixed at creation; if a client's books need different values, adjust them on the Entity afterward through your accounting configuration.

Activating an account, step by step

Here is the full sequence for onboarding a landlord — Continental Holdings — into accounting.

After activation: configuring the Entity

A fresh Entity can receive posted invoices right away, but tenant payments, management fees and owner draws each need a setting or two on the Entity before they will run for this client. Set them now, while you are here, rather than discovering them missing on the first run. The fields fall into three groups — banks, products, and one optional property — plus a set of accounting defaults that belong to REDA Financials.

The bank accounts

The products

A "product" here is the accounting product that carries the general-ledger account a line posts to. The fee has two sides — your firm earns it, the landlord pays it — so the two products live on two different entities.

The administration property

Administration Property is optional. If you set it, the journal that settles a management-fee run books its lines against this one property — handy when you want all fee-settlement postings to sit under a single administrative property in reporting. Leave it blank and nothing breaks; the settlement lines simply aren't tied to a dedicated property.

The accounting defaults (for tenant payments)

The Entity also carries three defaults that belong to REDA Financials itself: Default Bank Account, Default Cash Account, and Default Ledger. When you record a tenant payment, REDA creates a cash receipt and copies these three onto it, so they must be set for the entity that owns the property being paid. See the REDA Financials help center for what each one means inside the ledger.

The Region-currency rule

The Entity's currency is inherited from its Region at creation, and REDA keeps them aligned. If you later change the Entity's Region to one whose currency no longer matches the Entity's currency, the save is blocked:

Currency consistency matters beyond this one message: a management-fee run cannot cross currencies. The landlord's Entity and your firm's Entity must share the same currency, or the fee for that landlord errors out. Keep every entity you intend to run fees between on one currency. See Management Fee Automation.

Worked example: Meridian Properties and Continental Holdings

Two accounts, two entities — one for the managing firm, one for a landlord it serves. Both live in the Harbour District region and share one currency, so a fee run between them is allowed. (Give each a territory too — it's a required routing dimension; the exact territory you pick doesn't affect the currency.)

The account's Details tab, REDA Financials section: Financial Active is checked, and Account Code, Entity and Territory (with its Territory Full Code) are all populated.

The Entity record that activation created automatically — the highlights show the matching name and code, Accrual accounting basis and the Active flag, with the Entity Identity fields below.

The configuration section of an activated Entity (Meridian Properties). The Management Fee Configuration block is filled in — Management Fee Revenue Product, Management Fee Expense Product, Management Fee Settlement Bank, Operations Bank and Administration Property — and the Default GL Accounts block below routes each kind of posting to its account. These are the defaults every fee run, draw and posting reaches for; a gap here is what excludes a landlord from a run.

Reference: every Entity setting

One place to see both halves — the fields activation sets for you, and the fields you set afterward.

The account carries more than the switch

While you have the account open, a few adjacent settings are worth setting in the same pass — they live on the account, not the Entity.

• Financial Type marks whether the account behaves as a Customer, a Vendor, or Customer & Vendor in accounting.
• Electronic-payment (EFT) payee details — the bank details REDA uses when it pays or collects electronically. See Bank EFT / NACHA Processing.
• Returned-payment (NSF) fee settings — whether, and how much, to re-bill when a payment bounces. See Recording Tenant Payments.

Where to go next

1. How REDA Works with REDA Financials — the whole seam this activation sits inside.
2. Payment & Balance Sync — why an un-activated receivable account is the top bridge failure.
3. Recording Tenant Payments — where the Entity's bank, cash and ledger defaults are used.
4. Management Fee Automation — where the fee products and settlement bank come into play.
5. Owner Draws & Owner Statements — where the Owner Draw Product is used.

Frequently asked questions