Tenants do not always pay the exact amount on the exact day. One pays half now and half next week. Another pays three months at once. A third pays one invoice but not the other. If your records cannot handle that, the tenant's balance drifts away from reality and every statement becomes an argument. This guide explains how to record partial payments, advance rent and discounts correctly.
Start with the principle: pay the oldest debt first
When a tenant pays, the money should settle their oldest outstanding amount first, then the next, and so on. This is the fairest rule, it matches what tenants expect, and it keeps old debts from hiding behind new payments.
Partial payments
A partial payment is any payment smaller than what is owed.
Example: October rent is Rs 50,000. The tenant pays Rs 30,000.
| Item | Amount (Rs) |
|---|---|
| Invoice for October | 50,000 |
| Received | 30,000 |
| Balance outstanding | 20,000 |
| Invoice status | Partly paid |
Record the receipt on the day it arrives, give a receipt, and show the balance. Do not wait until the invoice is fully paid.
Paying several invoices in one payment
A tenant who is behind may pay a lump sum covering more than one invoice.
| Invoice | Amount (Rs) |
|---|---|
| August rent | 50,000 |
| September rent | 50,000 |
| October rent | 50,000 |
| Total owed | 150,000 |
The tenant pays Rs 120,000. Applying oldest first:
| Invoice | Paid (Rs) | Balance (Rs) |
|---|---|---|
| August | 50,000 | 0 |
| September | 50,000 | 0 |
| October | 20,000 | 30,000 |
One receipt, three invoices, one clear remaining balance.
Advance rent
If the tenant pays more than they owe, the extra is not income yet. It is an advance: money received for a period that has not been billed. Record it as a credit on the tenant's account, so that:
it shows on their statement, it is applied to the next invoice, and it can be returned if they leave.
Example: the balance owed is Rs 20,000 and the tenant pays Rs 70,000. The Rs 20,000 settles the debt and the remaining Rs 50,000 is held as an advance.
Discounts
A discount reduces what the tenant owes. It is a decision, so it needs control.
Who may give it? Limit it to the owner or a senior person. Why? Write the reason: early payment, repair inconvenience, goodwill, settlement of a dispute. Where does it go? Record the discount in its own account, so the owner can see how much has been given away.
A discount that is just a smaller payment typed in as "paid in full" hides the loss. Show it.
What a receipt must show
A good receipt records:
the receipt number and date, tenant and apartment, amount received and the way it was paid, which invoices it settled, the balance remaining, and who received it. Cheques and bank transfers
Record the payment method and reference. For cheques, only treat the money as received when the cheque has cleared, or mark it clearly as awaiting clearing.
Common mistakes Applying money to the newest invoice first. Old debts never clear. Recording part payments as notes. The ledger does not move. Treating advances as income. The tenant's credit disappears. Quiet discounts. The owner finds out later. No reference for bank transfers. You cannot match them to statements. How OneAccounts Property Management does it
You can receive one payment against several invoices at once. OneAccounts applies the cash to the opening balance first and then to the invoices from oldest to newest, with an optional discount against what the tenant owes. Any amount beyond what is owed is recorded as an advance on the lease. A payment smaller than the invoice marks it as partly paid. A PDF receipt is produced for each payment, and discounts can only be given by the owner or an admin, posted to an account you choose. Payment methods are cash, bank transfer, cheque and other.
OneAccounts does not have a cheque register with clearing status. See OneAccounts Property Management.
Frequently asked questions What happens if a tenant pays more than they owe?
The extra is held as an advance and applied to future invoices or returned.
Should a part payment change the invoice?
No. The invoice stays as billed. The payment reduces the balance and the status changes to partly paid.
Who should be allowed to give a discount?
The owner or a senior manager. Keep a reason on record.
Can I receive rent for several months in advance?
Yes. Record it as an advance and apply it as each month is billed.
Do I need to give a receipt for every payment?
Yes. It protects both you and the tenant.