Overview
Unfortunately, you might have a tenant move out without paying the overdue balance they owe. There are several ways to record this in DoorLoop. However, it's always best to speak with your accountant about how to handle this for your situation.
Here we'll walk through writing off the unpaid overdue balance as a bad debt expense.
This method works for both cash-based and accrual-based accounting. Learn what the difference is between cash vs. accrual accounting.
The following shows how to forgive debt on a tenant's ledger by issuing a credit on the tenant's lease for any balances owed on the lease.
Step 1 - Find All Open Charges on the Lease
In order to clear rent that is uncollectible, you’ll need to check what all the open charges are on the lease. You can do this by going to the reports and viewing the A/R Aging Detail by Account Report.
To view the open charges that a tenant still owes on a lease, click Rentals on the main menu and then click Properties.
Find and click on the Property with the uncollectible rent charges.
To view all the ledger accounts that currently have an open charge on this lease, first, click the Reports tab.
Scroll down to the Who Owes You section and click on A/R Aging Detail by Account.
Filter it to the one lease with the open charges.
You will now see all the open charges for that lease. Make note of these. (If you need to view other leases, just change the Lease field.)
Step 2 - Issue a Credit for Bad Debt on the Lease
The next step is to issue the credit on the Lease (if you are trying to remove the bad debt.)
To write off bad debt on the lease, click Leasing on the main menu and then click Active Leases.
Find and click on the Lease that requires the credit.
On the Overview page, click on the Transaction tab.
Click the Issue Credit button.
For the Category dropdown, select the account you are applying the credits to. For example, if it’s for rent, select rent.
Enter the amount of unpaid charges in the Amount field.
Click Save to finish.
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Disclaimer
The information provided is not offered by a licensed accountant, should not be considered accounting, financial, or legal advice, and is provided (and intended) for general informational purposes only. Do not rely on the information provided; rather, please verify applicable accounting laws and regulations independently. This information should not be considered a substitute for professional advice and does not offer Generally Accepted Accounting Principles (GAAP). The author and publisher are not liable for any damages or losses resulting from reliance on this information.