The following process outlines how to manage a tenant underpaying rent to account for an expense while still retaining your full management fee.
1. Adding the landlord deduction
Set up a contractor called Tenant expense, leaving the payment details blank (for guidance on how to add a new contactor, please click here)
Navigate to Financials > Landlord deductions
From the top right, click on +Landlord expense and add a deduction for the amount the tenant has underpaid by, where the contractor is set to ‘Tenant expense’
Select the tick in the Include in ledger and statement column
Within the Contractor paid column, click on the tick icon (untick Add to BACS schedule on the pop-up before submitting)
2. Splitting the bank line
Navigate to Bank > View bank lines
Locate the transaction related to the tenant’s rent payment
Click on the ID number
In one line, enter the full amount of rent normally due and assign it to the property as rent
Click on Clawback difference
Click Add lines above
In the below example, the original bank line amount was for £900, however, the normal monthly rent due is £1000. Upon submitting, the system will create a bank line for £1000 attributed to ‘% Rent In’ against the property and a negative bank line for £100 alongside it.
3. Matching the bank lines
Navigate to Financials > Unassigned lines
Locate the newly created negative line
Click on the edit pencil icon
Expand the Select bank line to match dropdown and select the expense
Click Submit
The full management fee will now have been taken from the rent payment, and the landlord will see that they have received less income due to tenant compensation.