Paying an Invoice with Short-term Liabilities
I need some suggestion; I do business in the real estate rental business. I have tenants who pay check by mentioning pay for water and sewage to the company. But some of the tenants pay extra to the company so that company would pay on the behalf of tenants. Right now I collected the extra amount in the current liabilities. Can anyone tell me how do I use this amount to pay for the invoices the company sends to the tenants?
It’s my advice that you should use credit memo. Make an item that points to that liability account and use it in the credit memo to reduce the prepaid expense. And to create credit memo > Go to plus sign, below customer column > Choose customer credit memo.