A Prepayment Is Not Cash Income
In AppFolio, a prepayment is typically for rent that is received before it is due. It is treated as a liability and the GL account will often be called Prepaid Rent.
It will probably be set up as is the following:
Because prepaid rent is accounted for as a liability it cannot be used for any outgoing payments until it has been applied to charges. This happens after rent is due, which is typically the first of the month.
Prepayments can be collected as income by enabling your database to treat prepayments as income instead of as a liability. To do this, a presidential user must make the request from AppFolio. Once the request has been made from AppFolio, you will then need to create a new GL income account for your prepayments.
AppFolio is a robust system that has a lot of great features. APM Help has experts on their team that are familiar with settings and features in AppFolio that can make your life easier. If you’d like to learn more, comment with your questions below or contact us for a free 30-minute consultation. You can call us at (281) 949-8755 or email us at info@APMHelp.com. Feel free to hit that Messenger button as well.