Real Estate Company - Contingent Receivable Balance?

[gjensen]

Hello All,

I am new to my position and QB's. I work at a commercial real estate company and part of my new job is cleaning up our open invoices. We have quite a number of invoices that have a contingent receivable balance, meaning our client signed a 10 year lease and when the lease is up they have the option to sign for another 5 years. So my invoice reads the balance they are paying off, then the balance for the 5 years (if they choose to re-sign) - that balance for the 5 years is something that I would like to be an option on my invoice, perhaps like a tab on excel is how I picture it. Is it possible to do something like this?

I am using QB Pro 2008 - if the newer version can accommodate this request we will upgrade.

I have called QB and they were not very helpful.

[Wartrace]

A contingent lease does not belong on an invoice since there has been no agreement (aka sale) made. What I would do is create sales orders for the contingent period. Since the sales order is non-posting you could enter the contingent lease without affecting the open invoice balance. If they decode to renew the lease you can convert the sales order to an invoice.

To answer your question- there is no feature in QuickBooks like you describe that would allow you to add an "option" to an invoice.

The way the company is handling lease payments isn't how I would do it but that's another post...........

[gjensen]

Is a Sales Order the same as an Estimate?

How would you handle the lease payments? Or is that too much to ask?

[Wartrace]

Yes, a sales order is similar to an estimate (both are non posting).

The problem with using an invoice for lease payments is, unless you are on a cash basis, the entire lease is booked as income when you create the invoice. If you create an invoice for a ten year lease period you will show all that income as of the invoice date.

How I would handle a long term lease situation is set up each rental unit as a "customer" and each tenant as a "job" of that customer.

An example-
Customer 123 East Main st
Job- ABC company unit 1
Job- XYZ company unit 2
Job- PDQ company unit 3

Fill in all tenant information in the job information and the actual building information in the main "customer" name.

You can fill in all the lease details for the tenants in the "job" and add details about the lease renewal in the notes.

I would then set up the "job" (Tenant) for a recurring monthly (memorized) invoice for the lease payment to run the entire term of the lease.

Using this method you will only book income when payment is due and the invoice will be created for you each month.

[gjensen]

I have another question. I have started putting our contingent leases in as an "Estimate Invoice" and relating the estimate number with the invoice number. This seems to solve the problem of the open balance in our invoice section.

Now my boss wants to pull reports so we can see how much money is expected in 2017? 2025?

From what I saw, I don't think I will be able to do that because it's in "Estimate/Quote".

I really appreciate all your help so far. http://forums.quickbooksusers.com/im...lies/smile.gif