Make a project ready to sell and collect

Before the first booking is taken on a project, the money has somewhere to go. The project's Ready to sell and collect? card checks that: the company developing the project (the promoter entity) is named, it keeps a set of books, it has a collection account, a RERA separate account and an operative account for this project, each account has its ledger in those books, and, when your organization requires it, the project's RERA registration is recorded. A GST account is optional. Every buyer payment enters the collection account; the bank sweeps it daily, the escrow share to the RERA separate account and the rest to the operative account.

Until every blocker is cleared, a booking is refused with "<project> is not ready to sell and collect: <blockers>. Open the project and finish the "Ready to sell and collect?" card.", and Start purchases on an allottee's offer stays greyed out. Estimates are held back only by the RERA registration.

This task usually takes three people: whoever manages the project (the promoter and RERA), an accountant (the books and bank accounts) and, when a policy change is wanted, an administrator.

Before you start

• The project exists and has a promoter entity, or the promoter's company exists in Companies with the Promoter Entity type.
• Permissions, in the role editor's words:
  • the Edit permission on Projects to change the promoter, open the wizard step, sync the ledgers and record RERA (default roles: Administrator, Project Manager, Compliance Officer);
  • the Create permission on Books to set up the promoter's books (Administrator, Finance Lead), plus the View permission on Companies to pick the company;
  • the Create permission on Bank Accounts to add the accounts (Administrator, Finance Lead, Accountant), plus the View permission on Lookups for the purpose to be filled in for you;
  • the Edit permission on Organization Settings (the Administrator) to change the RERA policy.
• Have the bank details to hand: account holder name exactly as printed by the bank, bank, branch, account number and the 11-character IFSC.

Steps

1. Open the project. On the Overview tab, find the card Ready to sell and collect? on the Project overview. It shows a green Ready badge when nothing is missing, otherwise a red "<n> to fix" badge with each blocker in red and any warning in amber, followed by the lines Promoter entity, Books, Collection account, RERA separate account, Operative account and GST account (optional) (each "<bank> ····<last 4>", "(shared)" when the account isn't pinned to this project, then the ledger code or "no ledger" in amber), RERA registration ("<no> · <date>", "Required before selling" or "Not recorded") and Escrow share in force ("<n>% of every collection swept to the separate account", followed by "(the organization's rule)" or "(this project's own share; the organization's rule is <n>%)"). Work through the blockers in the order below; each one you clear disappears from the card.

2. Promoter. If the card says "No promoter entity: choose the company developing the project", click Edit Project in the header, search the Promoter entity box ("Search promoter entities…") for the company and pick it, then click Save changes. You see “Project "<name>" updated.” If the company isn't there yet, Create new promoter entity at the foot of the list registers it (the Create permission on Companies). See Edit project and Register a promoter entity.

3. Books. If the card says "<promoter> keeps no books yet; set them up under Accounting > Books", open Accounting > Books in the sidebar and click Set up books (see Books). In the panel Set up books, pick the Promoter company ("Search Promoter Entity companies"), leave Books name blank to use the company name, check Books begin on (1 April of the current financial year by default), Fiscal year starts in (April) and Currency (INR), and click Set up books. You see “Books "<name>" set up with <n> ledgers.” and land on the books overview. The chart of accounts is copied, the first fiscal year opened and the voucher types seeded. Back on the project, the Books line names the books. The wizard's Promoter & bank accounts step (next) also links here with "Set up its books" when you hold the permission. The full task is Set up the books for a promoter company.

4. Bank accounts. On the readiness card, click Promoter & bank accounts. The Project setup wizard opens on the Promoter & bank accounts step with the card "Bank accounts of <promoter>" ("The developer decides whether each project has its own promoter entity and accounts; accounts pinned to this project are used first, the promoter's shared accounts otherwise.") and four rows:

   • Collection account: "Every buyer payment enters here (100%); non-operative, the bank sweeps it daily."
   • RERA separate account: "Receives the escrow share of every sweep; drawn only for land and construction cost against certificates."
   • Operative account: "Receives the rest of every sweep; the working account, refunds are paid from it."
   • GST account (optional): "Where a buyer's GST is banked apart so it never enters the sweep."

   A red icon marks a required account that is missing, a grey one the optional GST account. While a required account is missing, the readiness card lists "<Promoter> has no collection bank account for this project", "<Promoter> has no RERA separate bank account for this project" or "<Promoter> has no operative bank account for this project".

5. On the Collection account row, click Add account. The bank account panel opens as "New account for <promoter>" with the Owner fixed to the promoter, the Purpose already set to Collection account (when you can view lookups) and the Project set to this project (hint "RERA and GST accounts belong to one project."). Under Account details fill in the Account holder name ("Exactly as printed by the bank (used to match cheques)."), Bank (placeholder "e.g. HDFC Bank"), Branch, Account type, Account number (6 to 30 characters, letters and digits) and IFSC (placeholder "HDFC0001234"; "Enter the 11-character IFSC, e.g. HDFC0001234"), then click Add account at the bottom. You see "Bank account added." The row now reads "<bank> <account number> · <IFSC>" with a green tick, and, when the promoter keeps books, "· ledger <code>": the ledger is created in the books the moment the account is saved. See Bank accounts for every field.

6. Do the same on the RERA separate account and Operative account rows, and on GST account (optional) if the promoter keeps a GST account (without one the card only warns: "While not required, <Promoter> can also have a GST bank account for this project; without one a buyer's GST is banked into the operative account or goes into the collection account with the rest and is swept"). The compact readiness card under the rows updates as you go; the footer note changes from "Selling and collecting need the promoter's books and the collection, RERA separate and operative accounts; you can come back to this step." to "Books and the three accounts are in place; the bank sweeps <n>% of every collection to the separate account." Click Save & continue to mark the step done, or Finish later to return to the project.

7. Ledgers. If a row says "· ledger missing", or the card lists "The books have no ledger for the collection bank account <bank> ····<last 4>; sync bank ledgers" (or the same for the RERA separate, operative or GST bank account), the account was saved before the books existed. On the overview's readiness card, click Sync bank ledgers beside that blocker. You see "Bank ledgers created: <codes>." (or "Every bank account already has its ledger.") and the account lines show their ledger codes; one click creates every missing ledger for the four accounts. The button is greyed out without the Edit permission on Projects: "Creating the ledgers needs permission to edit projects".

8. RERA. If the card lists "RERA registration number and date are not recorded; no estimate or booking can be made until they are", click Record RERA. The wizard opens on Land & RERA; enter the RERA registration no. and the RERA registration date and click Save & continue. The RERA registration line now reads "<no> · <date>". See Record land, RERA and the project's sales settings. When your organization does not require RERA before selling, the same line is only an amber warning, "RERA registration number and date are not recorded", and does not block.

9. Return to the project's Overview tab. The badge reads Ready and the blocker list is gone. Bookings on the project, and Start purchases on issued offers to allottees, are no longer refused for readiness.

What happens next

• Receipts on the project are recorded into the collection account by default, and the bank's sweep of that account is mirrored the moment each receipt clears by the system rule "Receipt cleared into the collection account: post its RERA sweep (system)": one Contra voucher per receipt, dated its clearing date, split by the Escrow share in force (70% under RERA 2016 unless your organization recorded a different rule under Settings > Organization > RERA escrow share, or the project carries its own RERA escrow share on its Settings tab) between the RERA separate account and the operative account. The project's RERA accounts card, the statement and the receipt screens work from these accounts and their ledgers. See Check the RERA accounts and the sweep share and Sweep the collection account by hand.
• An account with no Project set counts for every project of the promoter ("(shared)" on the card); an account pinned to this project wins over a shared one, so a promoter with several projects can keep one operative account and separate collection and RERA separate accounts per project.
• Deleting the books later, or deactivating an account, brings the blockers back.
• The readiness card also appears on the wizard's Review step, and the booking wizard lists the same blockers and holds the booking back until they are cleared.
• The Promoter & bank accounts step counts as done in the wizard once the books and the three required accounts exist. Continue with Walk through the project setup wizard.

If something goes wrong

• A booking is refused with "<project> is not ready to sell and collect: <blockers>. Open the project and finish the "Ready to sell and collect?" card.", or Start purchases on an offer is greyed out with "Purchases cannot start yet: <first blocker>" (plus "(and <n> more, listed below)" when there are several) and the offer reads "Nothing is sold to an allottee before the project could sell to any buyer.": a blocker is still open. Come back to step 1. See Project not ready for sale (trouble.projects.project-not-ready).
• "This project has no RERA registration number and date on file; record them under Land & RERA before estimates or bookings (organization setting)." on an estimate or booking: record both RERA fields (step 8). If your organization does not want this gate at all, an Administrator can switch off Require RERA registration before selling on the Projects card under Settings > Organization ("Applies to every project of the organization; opportunities (leads) can still be recorded."); the toast reads "RERA registration is no longer enforced before selling." See RERA registration required (trouble.projects.rera-required).
• "Books can be set up only for a Promoter Entity company." under Promoter company: the company was created with another type. Set its type to Promoter Entity under Companies first. "This company already has a set of books." means the books exist; the project's card then only needs the accounts. See No books yet (trouble.accounting.no-books-yet).
• "Choose the promoter entity first." or "The promoter keeps no books yet; set them up under Accounting > Books." after Sync bank ledgers: do steps 2 and 3 first.
• "Enter the 11-character IFSC, e.g. HDFC0001234" under IFSC: an IFSC is four letters, a zero and six letters or digits. A 10-character code from a cheque book is missing a digit. See Bank account cannot be saved, changed or deleted (trouble.accounting.bank-account-cannot-be-deleted).
• "An account with this number and IFSC already exists" under Account number: the account is already recorded, perhaps under another owner or without a purpose. Open it under Masters > Bank Accounts and set its Purpose and Project instead of adding it again. See Bank account cannot be saved, changed or deleted (trouble.accounting.bank-account-cannot-be-deleted).
• No Add account button on the step: the project has no promoter yet (the step then says "The project has no promoter entity yet. Choose it under Basics first: its books and bank accounts carry the money."), or your role lacks the Create permission on Bank Accounts. "Ask an administrator to set up its books" means you lack the Create permission on Books. See No permission (trouble.admin.no-access).

Related

• Project overview
• Project setup wizard
• Edit project
• Books
• Bank accounts
• Companies
• Organization
• Set up the books for a promoter company
• Register a promoter entity
• Record land, RERA and the project's sales settings
• Walk through the project setup wizard
• Check the RERA accounts and the sweep share
• Sweep the collection account by hand