At times you may need to create one-time general adjustments to the balances of your leases. This could be because your tenant either undercharged or overcharged.
Any adjustments you make will need to be mapped correctly on the accounting side to ensure they are properly journalized in the General Ledger.
Case 1- Your tenant is undercharged and tenant lease balance needs to be increased - you would need to set up a debit adjustment
Case 2- Your tenant is overcharged and tenant lease balance needs to be reduced - you would need to set up a credit adjustment
Even if you only wish to set up one of the above, it is best practice to set up both at the same time as they represent the opposite within accounting.
Step One- Creating a new AR code
Administration --> Financial --> AR Codes --> New AR Code
Name- Call your AR code whatever describes your adjustment the best so you can recognise this for all future adjustments of this nature.
Case 1- Name -> Lease Balance Additional Charge. Type -> Account Charge
Case 2- Name-> Lease Balance Reduction Credit. Type -> Account Credit
You must choose which GL account you wish to map this adjustment to.
As this is is an alteration to the lease balance you will need to ensure you are mapping the codes to an income GL.
If you need to create a new GL that fits your needs please see the link below which explains how to create a new GL account;
Now we can proceed to mapping our adjustment.
Administration --> Financial --> Accounting --> GL account Mapping. Along the top tabs you are looking for 'income' as we are mapping an income adjustment --> New GL Mapping
GL account- find your preferred GL to map to. You may have created a new one OR perhaps you just want to map it to your base rent. In this example case I will be mapping to the Base Rent GL.
For this you do not need to choose the effective and expiration date- just leave blank as they do not apply to this scenario- we are doing a 'one time' adjustment
Default- this means that if you need to use this adjustment for various leases for different buildings and owners, it will show in the same GL account.
Property Owner- This is when you wish for the charge to go to different GL accounts for different owners
Building- this is when you wish for the charge to go to a different Gl account for different buildings.
Case One--> AR code type--> Account Charge --> AR Code--> Lease Balance Additional Charge
Case Two--> AR Code Type--> Account Credit --> AR Code --> Lease Balance Reduction Credit
Step 3- The Lease Adjustment
Now you need to add the adjustment you have made to the lease in question;
Exit Administration and go to 'lease' and pick the lease you wish to add this lease balance adjustment
Top tabs--> Adjustments --> New Lease Adjustment
Code-> You are choosing your previously created AR Code
Execution type-> this can be immediate or pending. For a one time adjustment you will likely be looking for this as an immediate adjustment
Amount-> The amount you are adjusting the lease for.
This is all you have to fill in and you can click save -> actions -> submit
You have now created, mapped and linked your adjustment to your lease.