We’ve been hard at work adding the ability to automatically apply prepayments towards a resident’s future balance!
We’ve created a new resident setting that will allow you to enable the system to have prepayment funds automatically applied to a resident’s next balance, or towards a future balance on a specific account such as rent income or association fee income.
When this setting is turned on, if the resident does not have any outstanding balances, all payments collected will be allocated to the new Prepayments general ledger liability account. Buildium will take care of adding the prepayment charge to balance the resident’s ledger for you.
The next time there is money owed, the system will automatically add an applied prepayment transaction to pay the balance. This step automatically turns the prepayment liability into income on the appropriate date.
We’ll give you insight into which residents have prepaid.
We've done work to provide you with some insight into which residents have prepaid. We’ve added a new column to the rent roll (rentals) and the recurring charges (associations) reports to show prepayments held.
We’ve also added a banner message on each resident’s ledger to show you how much money you are currently holding for residents in prepayments at any given time. The prepayments held amount will also appear on the lease or ownership account summary pages for a quick reference.
Setting up automated pre-payments globally is easy.
- Navigate to Settings > Application settings.
- Then, click Residents.
- Scroll down the page to Prepayments, then click Edit.
There are two options when automatically applying prepayments to a future balance. Selecting Automatically apply prepayments to the next outstanding balance will apply prepayments towards any future balance. Selecting Automatically apply prepayments to balances on specific accounts will allow you to control which balances prepayments are applied towards.
- Choose the settings you want to apply, then click Save.
Overriding prepayment settings on the property and lease level
The prepayments setting can be overridden on the property level for rentals and associations. This is a good option if you have certain properties you want to manually apply prepayments for, but not others.
To override prepayment settings for properties:
- Navigate to Rentals > Properties, or Associations > Associations.
- Select the property or association you want to override.
- From the property summary page, click the financials tab.
- For properties, then cick Lease payment settings. For Associations, click Account payment settings.
- Select Edit next to Prepayments, and choose the settings you'd like for that particular property.
Prepayments can also be overridden at the lease level by navigating to the Payment settings page from the financials tab of any lease.
Moving prepayments that are already held
In order for the system to automatically apply this money towards a future balance, you must use our new Prepayments general ledger liability account. You have a choice on how you start using this feature.
You can start automatically applying prepayments you collect in the future by simply turning on your prepayment setting. Any payment that comes in when the resident does not have an outstanding balance will automatically be allocated to the “prepayments” general ledger liability account. The funds from this account will then be automatically applied the next time a resident has an outstanding balance.
If you would like to start using this automation for prepayments you are currently holding onto, you will want to move those transactions to the new “prepayments” general ledger liability account. This can easily be done by going to accounting>>chart of accounts and moving transactions from the account you had been using for prepayments to the new account. Follow the steps in this help article for guidance.
You will only want to move the transactions you would like to be automatically applied to a future balance. So make sure that transactions for things like last month’s rent are not moved to the prepayments account. We’ve created a new general ledger account for last month’s rent for this purpose which will not be automatically applied to a future balance.
Once this setup is complete, your account is successfully set up to automate prepayments.