Rental Invoice

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Whether you own a business that rents real estate to others or operate one for someone else, you are undoubtedly familiar with the Rental Invoice.  The rental invoice is the document that landlords (or those representing them) present to tenants, which details how much the tenant owes in rent, and when the amount due is to be paid.

The form is available in a variety of configurations, but the Rental Invoice template described below is appealing for a number of reasons which we’ll discuss later in the article.

Basics

First, we presume that you have Excel on your PC since you will need it to view and manipulate the invoice template.  And, it is helpful if you have some understanding of how the software works.  For instance, if we refer to a data cell as “C12,” you will know that we’re referring to the cell located in Column C at Row 12.  We will use this terminology as we move through the example.

Next, let’s remind ourselves of where a rental invoice originates.  When a tenant leases (i.e., rents) property from a landlord, the relationship between the landlord and the tenant is set out in a Rental Agreement.  This document details the real estate to be rented to the tenant, the duties and responsibilities of each party, the amount to be paid by the tenant for use of the property, and when the rents are due.  The rental agreement has a beginning date and an ending date and is signed by all parties as evidence that they are in agreement regarding the arrangement and understand their respective roles and responsibilities.  It may also have a unique rental agreement number.

Although schedules for rent payment may vary according to the requirements and wishes of the respective parties, rents are typically paid on a monthly basis. The rent invoices presented to the tenant during the term of the lease are used by both the landlord and the tenant as evidence of the claim for payment.  They may also be used as receipts for payment if the dates and methods of rent satisfaction are subsequently noted on the form.

Now, let’s look at an example of a blank invoice form.

Invoice Form

Rental Invoice Form
You will see that we’ve copied this example from Excel template because we will refer to cell addresses in our description.

This invoice template presumes that the business either owns and rents real estate for its own purpose or leases real estate to tenants on behalf of others.  It also assumes that monthly rental fees are due monthly and are nominated in U.S. dollars.  The form is equally satisfactory for other currencies that can be selected by the user in the Excel program.

First, you see the tile of the form “Rental Invoice” In cell B2.  Cell J4 contains the date of the invoice.  You only have to input the numerals for the date, and the form will convert them to verbiage (see filled-in example below).  Invoices are typically issued at the end of each rental period.  In our example shown below, we assume that monthly rent is due at the end of each month the property is used by the lessee (i.e., the tenant).

Cell J5 is for the Invoice Number.  Each invoice should receive a unique number for subsequent transaction identification and accounting purposes.  Having this identifier can be very helpful for proper bookkeeping and accounting.

Next is cell  I6, which contains the date on which the invoice is due for payment.  Invoices may be due upon presentment, or at some later date.  The interval between the presentment of the invoice and payment is normally set out in the rental agreement.

Cells B9 through I13 detail information about the renal company and the tenant.  Here each party’s name, address, phone number, and email address may be entered.  This information is useful to identify the respective parties engaged in the transaction(s) detailed in the invoice.

Information to be entered into the body of the invoice is self-evident.  The Address, Description, Monthly Rent Rate, and any Fees earned during the prior month should be entered in the indicated fields.  The form is formatted for up to eight properties.  Additional properties may be entered on additional invoices.

Once the numbers for the Rent Rate and Fees portion of the form are filled in (H16-I23), the “Amount” column totals them and presents the amount due for the preceding month.  The amounts due for each property included on the invoice are then sub-totaled in cell J24.

Some governmental bodies assess taxes on rental proceeds.  Taxes to be collected on rental receipts are typically calculated as a percentage of the total rents and fees due.  The template presumes that such a system is in place for the locales listed in the invoice and provides a place for the applicable tax rate to be entered (Cell J25).  Any percentage may be used here, and the template will then calculate the appropriate amount of tax to be collected from the tenant in Cell I26.

The Total Due for the month is then displayed in Cell J27.

Fees

The base rent due for each payment period will be spelled out in the Rental Agreement. However, there may be occasions where additional costs are incurred by the landlord on behalf of the tenant, or where additional services are provided by the landlord to the tenant.  In these cases, fees may be assessed by the landlord in return for the additional services rendered.  Fees earned or assessed by the landlord are entered into cells I16-I23.

Also, note the section of the invoice entitled “Payment Terms.”  This is an area where the landlord describes its expectation of payment and when the payment is due.  It is common for landlords to assess a “Late Fee” for payments that are received after a certain number of business days past the Due Date.  Invoices that are paid after the Due Date are typically referred to as “past due,” and the post-Due Date period is referred to as the “grace period.”  Cell H26 gives the number of days of the grace period.  Payments received after this time will incur a Late Fee.

Late Fees are typically calculated as a percentage of the Total Amount Due (J27).  The pertinent percentage rate is shown in cell H27.  Late Fees may be entered into the “Fee(s)” column should additional or follow-up invoices for the subject month become necessary.  If the landlord does not require a Late Fee, this sentence may be removed from the template.

Now, let’s look at an invoice that’s been filled in so we can see how all this all fits together.

Rental Invoice Example

Here is our rental invoice template filled in.

Rental Invoice Example

Here, you can see that we’ve created an invoice using fictitious information.

In our example, the invoice is for the month of January 2019 and presents monies due from the tenant for that month.  The Invoice Date (J4) was entered as “01/31/2019” and automatically displays as “31-Jan-19.”  The same is true of the Due Date (J6), which is ten (10) days after the Invoice Date.

Next, you can see that the tenant rented two properties, 3050 Main Street and 2050 Maple Avenue.  His monthly rent due for the office space was $1,000.00, and he incurred no fees on that property for that month.  Rent due on the home was $1,250.00, and the landlord had incurred $15.00 in fees for, say, “maintenance of the property.”  Thus, the total due for Maple Avenue was $1,265.00.

The totals due for each property are Subtotaled in J24 as $2,265.00.  Applicable taxes of 7% are noted in J25 and calculated in J26 as $158.55.

The Total amount due for the month of January 2019 is $2,423.55, and it is payable by February 10, 2019 (J6).

Note that the Payment Terms describe the landlord’s expectation of payment and that there will be a 1.5% Late Fee assessed if the payment is not made within ten (10) days of the Due Date.

This form is ready for presentment to the tenant.  The tenant can pay by any method acceptable to the landlord, cash, check, credit card, money order, or direct transfer to the landlord’s bank account.

Summary

As you can see, the Rental Invoice template provides a functional and easy-to-complete form for any landlord or rental company’s use.  It is comprehensive and flexible.  When properly used, it will allow the rental agency to bill for and collect rents and fees due.  It will also serve as a permanent record of the transaction(s) described therein and provide information necessary for correct accounting and bookkeeping.

This invoice template could be altered for use in other types of rental businesses, as well.  Depending on your familiarity with Excel and its customization tools, you may alter it to your own satisfaction.

We encourage you to utilize the Rental Income template.  We are confident that if you do, it will aid you in the management of your business and the accuracy of your bookkeeping.

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