Overview
It's not uncommon for your tenants to perform work on the property they are renting in exchange for a discount on rent for the month. This can include either physical work or paying for repairs out of their own pocket. So how would we show this on a lease so that the tenant gets their discount and you still show a full amount of revenue despite the discount? Simple. Issue a credit on the lease to an expense account that matches the work or repairs they paid for.
The Steps
To issue a credit on a lease for tenant-paid expenses or work in exchange for rent, click on Leasing on the main menu and then click on Active Leases.
Find the lease for which you want to issue a credit and click on it.
On the lease, click the Transactions tab and then the Issue Credit button.
On the Issue Credit window, enter the following information to issue a credit:
Category: choose the account category for the credit. In this instance, you are paying a tenant for services rendered by reducing their rent charge, you can choose an appropriate expense account for the credit.
(This will show that you reduced the tenant's balance and will offset the revenue collected by increasing the expense account to record this expense transaction on the Profit and Loss report.)
Description: enter an optional explanation for the credit. (What you enter here is what the tenant will see on their lease ledger in the tenant portal. If you leave it blank, the tenant will just see the word “Credit.”)
Amount: enter the amount for the credit.
Date Issued: change the date for the credit if needed.
Add Line Item: use this link to add additional credit items if needed. (You could also create separate credits for each line item.)
Add memo: add an optional note for your reference when reviewing the credit later.
Add any relevant files (optional) by dragging the file into the window or using the Click Here link to upload. Add any relevant files (optional) by dragging the file into the window or using the Click Here link to upload.
You also have the ability to Share files with the tenants if you click the box. This is a good way to share files like receipts or documents.
Click Save to finish.
That's it. After posting the credit, the balance due amount will be less and the tenant will only need to pay the rest of the balance that isn't covered by the credit.
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.