How to Handle Rent Paid in Advance (Non-Xero/QuickBooks Users)

This article explains how to handle rent paid in advance. A perfect example of this is when a student/tenant pays rent for an entire term in advance.

This is very useful where incoming money does not relate completely to a charge or when receiving funds from a local authority.

In the example below a tenant has paid 3 months of rent in advance, summing to an amount of £4500. A rent charge has now been placed at an amount of £1500.00 showing as TR1442 in the screenshot below:

To handle the fact the individual has paid the 3 months of rent in advance, we must add a “Tenancy Receipt”. To do so, click the “Add Transaction” button as shown on the image above. On the pop-up that is presented to you upon clicking the add transaction button, on the “Transaction Type” drop down, select “Tenancy Receipt”. Add a description specifying the details.

You now need to allocate the receipt to the charge, as shown on the screenshot below. A receipt can be allocated to multiple charges but in this case we are allocating it to just one.

In the next screen pay off the £1500.00 from the advanced payment received:

You will now see from the tenancy statement that there is now £3000.00 in the account which can be allocated to future charges.

If the credit on the account is to be returned to the tenant then this is linked to how to refund an overpayment.

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