would you like to know how to record receiving rent payments from tenants in your management
service company well then you should watch this video recording rent collections
if you have any questions about this topic you can leave them in the comments 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
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how do we record receiving rent from tenants well first we use the receive
payments window we input the specific date amount and tenant then we choose
which bank account that the tenant's money was deposited into and that's it it's that easy
quick note before i demonstrate how to record receiving rent payments normally we would collect
a security deposit from each tenant before or at the moment we collect the first month's rent
in fact we would even collect a security deposit from each landlord before we start up
those videos are coming in a future video very soon so soon i will show you exactly how to record
all security deposit type transactions but to get the idea of how a management company
operates day to day i'm showing receiving the rent payment first so we're going to stick to this
very simple three-step plan example one let's imagine on january 1 of 2022 we received three
thousand dollars for january's rent from betty boop who is a tenant under the landlord alan arby
now this is our very first transaction so the trial balance is blank but if we receive three
thousand dollars from rent from a tenant what will change well we have three thousand in the bank now
so cash and bank will show up for the first time as three thousand dollars and rent payable
to landlord clients is the reason we have that three thousand because that three thousand will
we have to uh be paid to the landlord clients so it's money we owe it's a liability with a
credit balance and 3 000 will show up on the credit side for the very first time let's follow
the three-step plan and see if we get the same result we can even open the trial balance before
we record the transactions and maybe change the columns a little to make it look nice
we just follow the three-step plan and open the payment window from the icon bar
we choose betty boop under the landlord alan arby we put the date as january 1 of 2022 make sure
you choose the correct bank account you know you only have to do this once if it's always going to
be the same bank account choose the bank account the money's going into and now all you have to do
is put the money amount when you type it in after you type in the zeros push the tab
key because that will save the field but keep the window open if everything looks good then
at the very bottom you might not be able to see it in my screen but at the very bottom there's
a save and close window right here now you're going to get this message about a payment credit
just click ok and when we go to the trial balance you can see that cash and bank is exactly as what
we expected and this liability account indicating what we owe to pay back to the landlord whose
tenant we just collected rent from shows up for the first time as three thousand dollars
now what about example two january one still the beginning of the month we received four
thousand for january's rent from candy charles under alan arby so
if we received four thousand from a second tenant under the same landlord in the same day
what will be the result well we'll have four thousand more in the bank so we have seven
thousand here and we owe 4 000 more to clients in general so let's record it the same way
open the payment window notice it remembers cash and bank it remembers the last date we recorded
a transaction but this time it's candy under allen for four thousand push tab now again you
could just hit the enter key and again we will talk about this payment credit feature later
but for now click ok and the results and the trial balance are exactly as what we expected
however the most important results show up right here in the most important report landlord payout
balances if you click this report will clearly show you that on january 1 we received rent from
betty for three thousand on january one we received rent from allen for four thousand
therefore at this moment the total that we owe to alan arby the landlord is seven thousand dollars
and you see how great this report is it shows you the total to that specific landlord and the
individual tenants that you collected from but to really get the idea let's do two more examples
let's imagine we collected under the other landlord dave deeney
from this guy eddie edwards three thousand dollars for eddie under dave deeney well if that were the
next transaction what would the trial balance look like well we have 3 000 more in the bank
so that would go up to 7 000 and technically we owe 3 000 more to our landlord clients
for the rent that we just collected uh that we haven't given yet so let's go ahead and record
that so you know we leave the trial balance first open payment still january one still cash in bank
but now it's a different landlord it's this tenant eddie edwards and he just paid three thousand
dollars hit enter or go to the bottom and click ok click ok again or hit enter close the window
and now you can see the result in the trial balance is exactly what we expected
but if you go to the most important report landlord payout balances you can see we owe
seven thousand to allen for two tenants and we owe three thousand to eddie for i mean
excuse me we owe three thousand to dave deeney the landlord for collecting eddie
that's why the total is ten thousand and that's why at this moment the total we owe
is ten thousand one last one just to bring it home again under dave deeney dave's other tenant
freddie froda paid 4 000. so what will be the final result in the trial balance well you have
4 000 more in cash so you have 14 thousand in the bank and you owe four thousand more to landlords
so you have rent payable to clients four thousand fourteen thousand excuse me same thing
payment same bank account same date but this time it's freddy froda that you collected
and we hit enter hit enter again close the window and now you can see the total in the bank is 14
the total we owe back to landlords for now is fourteen thousand and why is it fourteen
thousand that's because you can see it's because we are alan seven thousand for the two clients we
collected from him we owe dave 7 000 for the two clients we collected from him therefore we owe a
total of 14 000 which equals what's in the trial balance 14 000 rent payable to landlord client