Rent Discount Handling in FalconPro Real Estate Software: Complete Guide

Rent Discount Handling in FalconPro Real Estate Software: Complete Guide

Introduction

Rent discounts are a common practice, especially when landlords want to support tenants or resolve payment issues. FalconPro Real Estate Software provides flexible tools for recording, processing, and reporting discounts—whether you own the property or manage it for others. This guide explains how to handle partial and full rent discounts, their accounting treatment, and best practices for transparent financial management.

Scenarios for Rent Discounts

1. Owner-Managed Properties

If your company owns the building, discounts given to tenants are treated as building expenses. These are recorded under a dedicated discount account as part of the property’s expenses. Each building can have its own separate discount account, or a single account can be used for all discounts, depending on your chart of accounts setup.

2. Managed Properties for Other Landlords

If your company manages properties for other landlords, discounts are not given from your own funds. Instead, discounts are recorded as expenses or liabilities against the landlord’s account, in accordance with your chart of accounts.

How to Process Rent Discounts

Partial Discount on a Bounced or Unpaid Cheque

  • Scenario: The tenant’s cheque bounces (e.g., 20,000), and the landlord agrees to accept a partial payment (e.g., tenant pays 10,000, and the remaining 10,000 is discounted).

  • Steps:

    1. Cancel the bounced cheque from the received cheques list.

    2. Record two receipts:

      • One for the amount actually received (e.g., 10,000 as cash, cheque, or bank transfer).

      • One for the discounted amount (e.g., 10,000), using the “adjusting” option and selecting the discount account related to the building.

    3. Optionally, issue a receipt to the tenant for the discounted amount as proof that the balance has been officially waived.

Full Discount on Last Rent or Installment

  • Scenario: The landlord agrees to waive the last rent installment or any unpaid amount.

  • Steps:

    1. Open the contract and identify the unpaid installment.

    2. Create a receipt voucher for the discounted amount, mark it as “adjusting,” and select the discount account.

    3. The contract value remains unchanged; the discount is treated as an expense in the accounts.

Managed Properties: Recording Discounts

  • Scenario: The management company records the discount on behalf of the landlord.

  • Steps:

    1. Use the “adjusting” option in the receipt voucher.

    2. Select the appropriate discount or expense account under liabilities or managed building expenses, as per the chart of accounts.

    3. If separate accounts exist for each building, use the relevant one; otherwise, use the general managed building expenses or discount account.

Accounting Treatment

  • Discounts as Expenses:
    All discounts are debited to the discount expense account for the building or managed property, reducing the net income for that period.

  • No Change to Contract Value:
    The original contract value remains as agreed; discounts are handled separately for transparency and audit purposes.

  • Receipts for Discounts:
    Optional receipts can be issued to tenants for discounted amounts, serving as official documentation.

Example Workflow

Scenario Step 1 Step 2 Step 3
Bounced Cheque, Partial Cancel cheque Receipt for payment Receipt for discount (adjusting)
Full Discount Identify installment Receipt for discount Mark as adjusting, select account
Managed Property Adjusting in receipt Select discount account Save and update records

Best Practices

  • Always use the “adjusting” option and select the correct discount or expense account.

  • Keep contract values unchanged for audit clarity; record discounts as separate transactions.

  • Issue receipts for discounted amounts if needed for tenant records.

  • Coordinate with your accountant to ensure discounts are correctly reflected in financial statements.

  • For managed properties, ensure discounts are recorded against the landlord’s account, not the management company’s own expenses.

Frequently Asked Questions (FAQ)

Q1: Can I give a discount after a cheque is bounced?
Yes, cancel the cheque, record the actual payment, and create a separate receipt for the discounted amount using the adjusting option.

Q2: How are discounts reflected in reports?
Discounts appear as expenses in the building or managed property’s expense accounts, not as reductions to contract value.

Q3: Can I issue a receipt for a discount?
Yes, you can provide the tenant with a receipt for the discounted amount as proof the balance is waived.

Q4: What if I manage properties for other landlords?
Record discounts as liabilities or expenses against the landlord’s account, not your own.

Q5: Should I change the contract value after a discount?
No, always keep the original contract value for transparency; handle discounts separately.

Important Links