Landlords use a rent ledger to keep track of rent payments.
A rent book is a detailed record of rents received or paid. It is used for record keeping to track rentals and to have documentation in case a case needs to go to court. Rental management software that includes these books, along with other options, is available to help property owners and managers stay organized. Hard copies can also be kept, especially for owners who only own one or two properties and don’t generate many records. Tenants can keep their own books for personal reference.
Each ledger line provides space to record pertinent information about a payment. This typically includes the tenant’s name and address, along with the amount paid and the date. The type of payment, such as cash or check, can also be noted, along with details such as the check number. A line of notes can provide space to add an extra comment if the tenant paid late or there were other issues with the payment.
When landlords receive rents, they can record them in the ledger and provide a receipt to the tenant, which provides protection for both parties. The receipt can be used by the tenant to prove that rent has been paid, while landlords can refute claims that tenants were double billed for using the ledger and receipt records. In addition, a rental ledger can be used at tax time to account for income earned from rentals.
It may be to the tenant’s advantage to also keep records of rent paid. For businesses, this documentation, along with receipts, is required to claim tax deductions. In private homes, the ledger may provide records to use if there is a dispute over rent later. Tenants can ask to compare their records with those of the landlord to make sure they match and resolve any disparities, such as payments entered incorrectly.
An advantage of rent management or accounting software is that it can provide some functions automatically. It can save data so the user doesn’t have to repeatedly enter it, and it can calculate delay rates if needed. The software can also generate overdue rent flags so the landlord can keep track of who owes money; can also be used to print property-specific reports. They can show how much money has been earned over time, whether the property is paying for itself, and whether the tenant has remained in good standing.