Sharing commission with another agency
How an estate agency invoices and records commission shared with another agency on a joint sale, from the conveyancer's payment to the other share.
By Achekam · · 5 min read · For Real estate businesses in South Africa, Nigeria, Kenya
Your agency holds the mandate. Another agency brings the buyer. The two principals agree on the phone to split the commission, the sale goes through, and months later the transfer registers. Then the questions start. Who invoices the seller? Does the conveyancer pay both agencies or only one? Is the other agency's share your income and their expense, or neither? And when does the other agency get paid?
Joint sales are good business, but they produce more disputes between agencies than almost anything else. Most of those disputes are about money that was never properly agreed or recorded. A clear agreement before the sale and a consistent way of recording it afterwards prevent nearly all of them.
Who invoices whom on a shared sale
There are two common arrangements, and the agencies must choose one before the sale, not after.
| Arrangement | How it works | Watch out for |
|---|---|---|
| One invoice, then a split | The mandated agency invoices the full commission; the conveyancer pays it; it then pays the other agency its share against the other agency's invoice | The mandated agency carries the other's money for a while and must pay promptly |
| Two invoices | Each agency invoices its own share; the conveyancer pays each one directly | The conveyancer must have both invoices and clear instructions |
Two invoices are cleaner for the books, because each agency records only its own commission. One invoice is common where the seller signed a mandate with one agency and expects a single account. Whichever you use, tell the conveyancer in writing, early.
Invoicing your share or the full commission
In Achekam a business creates customer invoices as drafts it can change or delete. Issuing one takes the next number in its sequence and posts it to the ledger as debtors, sales and output VAT.
If you invoice only your share, the invoice shows your share and the VAT on it, and your sales figure reflects what you earned.
If you invoice the full commission, your invoice and your sales include the other agency's share, and you will record their share as a cost when their invoice arrives. Your income statement then shows a larger sales figure and a matching cost. Ask your accountant whether that presentation suits your reporting, and be consistent from one sale to the next.
In both cases, describe the invoice so the conveyancer and seller recognise it: the property, the sale, and whether it is the full commission or a share.
The other agency's invoice as a supplier bill
Under the one-invoice arrangement, the other agency invoices you for its share. Record it as a supplier bill.
A business keeps one supplier list with duplicate checks by name or VAT number, and quotations, orders and bills pick suppliers from it. Add each agency you share with once, with its registration details, VAT number if registered and bank account.
A business records supplier bills line by line with VAT. A bill without a purchase order waits for approval before it posts, and can be paid in full or in parts from a chosen bank account. Where you raise a purchase order for the other agency's share, posting the matched invoice puts it in the ledger as expense, input VAT and trade payables, and the supplier's invoice number stops it being posted twice.
Before approving, check the bill against the sharing agreement: the property, the agreed split, the commission actually received, and the VAT. In South Africa, also confirm the other agency is a registered property practitioner before paying it; the Property Practitioners Regulatory Authority is the regulator of South African estate agents and offers practitioner verification. Agencies in Nigeria and Kenya should make the equivalent checks under their own rules.
Receipts from the conveyancer's transfer
When the conveyancer pays on registration, the money arrives as a bank transfer. Two steps record it, and both are needed.
First, record the receipt against the commission invoice. A business records customer payments against one invoice or spread across a customer's invoices, and a part payment leaves the invoice part-paid. If the conveyancer pays less than the invoice, find out why before treating the rest as owed.
Second, match the bank line. Bank lines are matched by suggestion and a person accepts each match. But matching a bank receipt to a customer invoice does not record the payment on the invoice: it must also be recorded in receivables. Recording the receipt is what clears the invoice. Skip it and the invoice still looks unpaid, however neatly the bank line was matched. The conveyancer side is covered in more detail in commission invoices paid by the conveyancer.
Paying the other agency's share
Pay the other agency promptly once the commission is in. Holding another agency's money longer than necessary is the quickest way to lose its goodwill on the next joint sale.
Paying a supplier in Achekam only records the payment; no bank payment file is produced for suppliers. Make the payment from your online banking, then record it against the bill, from the account the money left. Send the other agency a short note with the property, the amount and the date paid.
A worked example in words
Your agency holds the mandate and agrees to share the commission equally with another agency that introduced the buyer. You invoice the full commission. On registration the conveyancer pays it. You record the receipt against your invoice and match the bank line. The other agency's invoice for its half arrives; you check it against the agreement and approve the bill. You pay it from your bank the same week, record the payment, and e-mail confirmation. Your ledger shows the full commission as sales, the other half as a cost, and nothing left owing either way.
A one-page sharing agreement before the sale
Nearly every dispute between agencies traces back to an agreement made on the phone. Put it on one page, signed by both principals, before the buyer's offer is signed:
- The property and the parties.
- Each agency's role: mandate holder, introducer.
- The split, as a share of the commission actually received.
- Who invoices whom, and the conveyancer's instructions.
- When the other agency will be paid after the commission is received.
- What happens if the sale falls through or the commission is reduced.
Independent agents within your own agency raise similar questions on their side; see commission-only agents who invoice the agency.
Draft your agency's standard sharing agreement this week, and use it for the next joint sale before anyone signs an offer.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
