Overview
Sometimes tenants choose to prepay rent for part or all of their lease. This article walks you through how to post a charge and record prepaid rent on an existing lease."
If you need a refresher on how to post a charge, check out the article: Post a One-Time Charge on a Lease.
Note: If the tenant plans to pay a large prepaid rent amount online through the tenant portal, make sure your payment limit is high enough to accept it first — otherwise the online payment will fail. See Request a Limit Increase for Rent Payments if you need to raise your limit.
The Steps
To record prepaid rent on an existing lease, click Leasing > Active Leases on the main menu.
Find and click the lease you want to add prepaid rent to.
Once on the lease, click the Transaction tab and then click the Post Charge button.
On the Post Charge window, enter the relevant information:
Due Date - This could be today or when the money will be collected
Category - Select Account (Liability > Prepaid Rent)
Description - (Optional) Something like Prepaid rent for 6 months
Amount - The amount of the prepaid rent that will be collected
Click Save.
Next, you’ll be back at the Transaction page. This time, click on the Receive Payment button.
On the Receive Payment window, enter the Amount and Payment method of the prepaid rent collected. Toggle off the "Automatically Apple Payments" option and under the Outstanding Transactions section, enter the Payment Amount collected for the Prepaid Rent charge. (If there are other line item charges, set those as $0 payment amounts.)
Click Save to finish.
You'll know if you did everything correctly by heading to the Deposit tab on the Lease and seeing that there is now Prepaid Rent being held.
Once the prepaid rent deposit is recorded, you'll need to apply it to rent charges as each payment period comes due. You can do this manually each month by withholding the deposit against the posted rent charge, or automatically by setting up a recurring credit that applies the deposit each month without any manual work.
Things to Consider
Prepaid Rent is a liability account. That means that when you charge and accept payment to a Prepaid Rent account, it will appear in the Deposits tab on the lease. You are holding these funds for future use to pay rent charges each month when they are posted. This way, the correct amount of rent is collected each month as revenue.
Prepaid Rent will show up as liabilities being held in reports.
For Prepaid Rent to be turned from a liability to a revenue account, the rent charge needs to be posted first. This way, withholding the deposit or applying a credit will go towards that rent charge.