The space that we rent has an additional unit that is currently unoccupied. We've been handling the utility bills for both units and deducting whatever isn't our responsibility from our rent payment every other month. Currently, that involves writing a check with the full rent amount on one line with Rent & Lease for the expense account and then additional line items for each utility account/expense with negative amounts for the totals being deducted, giving us a check with the net amount owed. I'm concerned this may be skewing our numbers as our Rent & Lease expense account shows the full rent amount.
Thanks for reaching out to us here today, @LilChief.
I'll share some information about recording rents. You'll want to make sure you're using the correct expense account for your utility bills and income account for the rent. This way, you can allocate a portion of the check amounts.
You can verify the accounts by following these steps:
With the above steps, you're able to keep track of your bills and rent accordingly. I also recommend contacting your accountant if you're unsure of the accounts.
You may check this article for details: How do I properly record lease payments?.
In case you need help in reconciling your accounts, check out this guide for more information: How to Reconcile in QuickBooks Online.
I'll be right here should you have questions or concerns with rents or utility bills. Don't hesitate to comment below. Take care and have a nice day ahead.
There is no set format for rent receipts prescribed. If paying rent more than Rs. 5000 in cash then ensure the revenue receipt is affixed with the revenue stamp. If the annual payment of rent exceeds 100000, then you need to report the PAN No of your landlord.
The way you're doing it is fine if you're a cash basis taxpayer. If you're on accrual basis, you should enter a bill first, then pay the bill. You don't want to reduce your rent expense, you want to show the credit elsewhere because that is what is truly happening - your rent expense is still $X (to match your lease terms), you're just making adjustments elsewhere to show the credit.