and now we will learn how to build the tenants for expenses if you have any questions about
this topic you can leave them in the comment section below and I'll do my best to help you
and of course if you feel the video helped you I hope you will click like and don't forget to
subscribe to get updates on new videos that come out all the time if you paid an expense that the
tenant is responsible for it is usually acceptable to bill the tenant for that expense this means you
make the tenant responsible for that particular expense well how do you make them responsible for
a particular expense first you add the expense to their balance in the tenants records and you have
to give them an invoice which formally requests payment for that particular expense now what are
the steps in billing a tenant and I'm going to physically demonstrate this in a moment it's
as simple as one two three first we pay the expense normally with a check and we make the
check the same way we made the check in a prior video then we mark the check as billable and in
the prior video the billable box was already checked automatically so that should be pretty
easy just make sure the check mark is there when you save it then we put the check on an invoice
to the tenant and that takes two seconds it's very easy I'm going to show you and that's all
you have to do it's a breeze however before I show you there's some important things you need
to know that happen when you bill a tenant for expenses that you have when you pay the check
your expense goes up because you just paid for an expense and QuickBooks records applause to
that particular expense account in your chart of accounts but when you put the check on an
invoice at that moment your expense goes down and that's because at the moment you put the check on
an invoice you are no longer responsible for that payment that means that you no longer
have that expense your tenant does and that's why it gets added to the balance so be aware
that those are the two things that are going to happen after each step for example let's
imagine on July 20 we paycheck number three for a hundred and fifty dollars to calvin cleaners
for cleaning a spill in apartment 2b where betty lives in this example betty is responsible and
we're going to mark it as billable to be able to make her pay for it so how do we do that
well we open the check window just like we did in a previous video and we scroll forward to July 20
obviously we choose the correct tenant Betty and the money amount was a hundred and fifty dollars
let's just double check that yup one hundred fifty dollars and of course to us it's cleaning expense
but in order to make Betty responsible we then choose Betty now notice at the moment we choose
Betty it's marked as billable in this case we're going to leave the check mark there at the moment
we click Save and close we can open the trial balance and you can see that cleaning expense
shows up for the first time as a hundred and fifty dollars you can also open the profit and loss by
tenant and you can see that we actually do have a hundred and fifty dollars in cleaning expense
for Betty that lowers our profit for apartment 2b now we're going to put that on an invoice so
let's imagine on July 31 were going to send her the normal monthly rent invoice but we're going
to add to that invoice this check so what we do is we click open the invoice and first bring the
date forward to July 20 or backward if depending on when you're doing this to July 20 of 2019 then
at the moment you choose Betty this pop-up shows up and this is a normal pop-up in QuickBooks when
you want to build your tenants for some expense leave this selected and then click OK and this
window opens up choose billable time and cost of course if we were selling them items or billing
them for mileage these would be the tabs that we choose but normally we choose the expense tab and
if there were several checks that we wrote as a result of Betty we would have to choose which ones
were going to add to this invoice in this example there's only one so we click the check mark in the
margin and then click OK and we notice the hundred and fifty dollars has been added to this invoice
then all we have to do is go to the next row and add the normal rent due and I believe for Betty
the normal rent is a thousand dollars so thousand dollars in rent plus a hundred and fifty in
expenses means that Betty now owes us one thousand one hundred and fifty dollars more at the end of
July click Save and close by the way don't forget to remove the email later button which will pop
up even if you don't click it that will prevent you from saving so we will click Save and close
now notice cleaning expense has disappeared from the profit and loss by tenant it is no longer an
expense to you it no longer lowers your profit why is that because if you go to the tenant balance
detail and you look at Betty you can see she now has an invoice that's not just $1,000 she now has
an invoice for $1,050 now let's just do a quick second example to really drive home the point
let's imagine on July 25th we paycheck number 4 for $100 to Rex for repairs on apartment 3c
where candy lives let's imagine that candy is responsible for this repair and we're going to
mark it as billable so we open the check window and I believe the date was July 25th so we make
the check July 25th and of course we choose candy and the money amount I believe was $100 and of
course it's repair expense the most common expense that tenants cost us actually let's be really
careful to make sure that it's only a hundred now because it's for candy we have to go to the bottom
right and choose candy in this case leave the billable checkmark there because we are going to
build this to candy after we click Save and close we can open up the profit and loss by Tennant and
you can see candy now has a hundred dollars in repair expense which means we have a hundred
dollars and repair expense lowering our profit for apartment 3c however on July 26th we're going to
give candy a specific invoice for this this means we're not going to add it to the rent for July
31 we're going to bill her separately billing her separately will still increase her balance by the
amount of the expense so we can click invoice and the date of the invoice is July 26th and look what
happens at the moment we click candy aha she has costs so we'll click OK and in this case it's an
expense it's this particular check we click here and click ok and now the hundred dollars has been
added and we can put in the memo any detail that we want explaining why or you could even type it
into the description field and you might get a little warning message but you can still do it
and you could just describe whatever it was make sure the email check mark does not stop you from
saving the invoice when you click Save and close look look that money has not I repeat is no longer
lowering the profit of 3c4 candy because it is now part of Candy's balance when we look
at the tenant balance detail and we scroll down to candy we see she now owes us an additional hundred
dollars and that's for this specific invoice that we billed her for separately for the repair you