Simplifying Mid-Month Rent Invoicing

Property managers face significant challenges when generating the first-month rent invoice, particularly when leases start mid-month. 

But why is this an issue? 

Why do we help handle First month invoicing? 

Let’s take an example to understand this better: 

Unit 

Contract start date

Contract end date

101

1st July

31st July

If the tenant moving into unit 101 has to be invoiced for the first month, we heard 2 resounding opinions: 

• Create an invoice for 1.5 months 
• Create an invoice for exactly 1 month.

Factors like tenant cash flow, standard operating procedures, regional regulations, property manager’s cash flow, reducing risk etc. make property managers choose either of the above options. 

But over and above this, making this journey configurable for the property manager is of utmost importance. The following questions are defined in the SOPs of many PM businesses.

1. Do we have enough money to take care of the expenses? 
2. Should we charge the tenant deposit along with the first rental invoice? 
3. Is there any Admin fee that we wish to levy on the tenants? 
4. Are there any additional services that we should charge tenants for?
5. If I charge a 1.5-month invoice, how will my invoice be due? 
6. If I raise a 1-month invoice, how do I keep track of my next receivable? 

So how do we answer these questions? 

A complete solution - First month Invoice Settings 

Users can define how the invoices need to be created depending on internal and external factors. To enable this our system provides users with 2 options: 

• Prorate 1st month invoice: Choosing this option will prorate the first month's invoice (15-07-2024 - 31-07-2024) and raise 1 month's invoice for the upcoming month (1-08-2024 - 31-08-2024)
• Raise a 2nd-month invoice: Choosing this option will raise 1-month's invoice (15-07-2024 - 14-08-2024) and prorate the second month's invoice (15-08-2024 - 31-08-2024) 

This allows users to choose an option that best suits their needs. So this answers question 1 above. 

Now for questions 2, 3 and 4 - we have the option to choose what should be added to the first-month invoice: 

• Rent and Services: PMs can choose if they want to add other services like laundry, gym, furniture, etc. to the First-month Invoice.
• Deposit: If selected our system will create a separate invoice for deposit along with the first month's invoice.
• Admin fee: If selected our system will create a separate invoice for Admin fee along with the first month's invoice.

And finally coming to questions 5 and 6 - Default Invoice date. 

• Users can choose the date on which the invoice should be due. 
• To avoid missing out on invoices, our system will always create 2 invoices for 1 month plus the remaining days of a month, this way users would have already created an invoice and date when the invoice becomes due will be captured by the system as per the table below. 

Invoice #

Invoice Period

Basis of Proration

Invoice Due

1

(15-07-2024 - 31-07-2024) 

Prorate 1st month invoice

15th July or the Contract start date

2

(1-08-2024 - 31-08-2024)

Prorate 1st month invoice

1st August or Contract start date

3

(15-07-2024 - 14-08-2024) 

Raise a 2nd-month invoice

15th July or Invoice created date

4

(15-08-2024 - 31-08-2024) 

Raise a 2nd-month invoice

15th August or Contract start date or Invoice created date  

Note: This only applies to contracts that are starting mid-month and does not apply to contracts that start at the beginning of the month.