For North American users, please be aware that "Tenancies" are known as "Leases" and "Terms & Breaks" within a Tenancy are referred to as "Terms & Options". For more information on regional terminology, please refer to our Glossary of Regional Terminology.
This article serves as a guide to adjusting the start date of a term. The need to change a start date can arise due to an initial error or change in circumstances. The approach you take will depend on how long the agreement has been in effect and whether funds are currently held in the ledger. We'll explore the methods to correct the start date effectively and in compliance with trust accounting legislation, where applicable.
If the Lease/Tenancy is Very New
For newly established agreements with funds still in the owner’s ledger:
- Reverse all funds reconciled for this lease/tenancy.
- Adjust the rent template to reflect the correct start date.
- Void all incorrectly dated rent invoices, using the Ignore as Rent option.
- Generate the invoices again using the Generate Next Rent Invoice or Set Opening Balance options and reapply the lease/tenant's funds against the newly created invoices.
If No Funds in the Owner's Ledger
When there are no funds in the owner’s ledger, follow these steps:
- Modify the rent template start date to the correct one.
- Generate one-off rent invoices to cover each period up to the system-generated next invoice date.
- Unreconcile previous invoices and reverse them where possible, or unreconcile only if balance constraints apply.
- Match deposits from the bank statements to the new correct invoices.
- Reverse payments against incorrect invoices and void them.
- Ensure there are no unprocessed deposits in the trust account.
Remember to note all changes in case of a trust account audit and seek advice from your auditor if necessary before proceeding with numerous reversals.
When Lease/Tenancy Started Too Late
If the agreement started later than recorded:
- Change the rent template start date to the accurate starting point.
- Check the date range for the next invoice generation.
- Create a one-off rent invoice for the initially missed period.
- Generate another one-off invoice for any gap between the old and new invoice dates.
- Match the lease/tenant's forthcoming payment to the new invoices.=
When Lease/Tenancy Started Too Early
For agreements that began sooner than they should have:
- Update the rent template to the correct start date.
- Verify the next invoice's date range after adjustment.
- Issue a one-off rent invoice to cover the gap between the old and new rent invoices.
- Create a clear, descriptive income credit note for the period that was overcharged, and apply this credit note to the new invoice.
Example:
Lease/Tenancy was invoiced from 1st Feb 19 but really started on 10th Feb 19, and has already been invoiced for February and March rent, next invoice is showing as 1st April. Adjust rent start date to 10th Feb, and the next invoice date will move forward to 10th April. Raise a one-off rent invoice for 1-9 April, and a credit note for 1-9 Feb, apply the credit note to the invoice.
By following the relevant steps, you will straighten out any discrepancies in rent agreement start dates and maintain precise records. Bear in mind the importance of trust accounting compliance in your region and retain detailed notes on all adjustments made.