Frequently Asked Question

Pay the Landlord On Account in the Middle of a Period
Last Updated 7 days ago

Paying a landlord on account is not the same as paying a contractor on account.

For a contractor you must use the Pay On Account screen to ensure that a reversal is generated - so you claim back the payment made from his subsequent expense invoice.

But you should NOT enter a POA transaction when making a payment to the LL.

It is not correct to do so, but if you do, it will not cause any damage - as long as you use the Pay Creditors screen to make payments - as you should. It is just confusing to do so.

Paying a plumber £5K on AC is a loan. You lend him £5K and he owes you back £5K. When he renders his expense invoice for £20K then the -£5K transaction generated automatically by the POA process, will reduce the payment due to £15K.

In such a case it is critical to enter a POA.

However, with a LL, you are not lending him any money. You are sending him his own money.

There is no need to treat this as a loan.

Just enter the amount paid with an analysis code of TFR (or whatever code you use to denote a payment to the LL) and that is it!

You send the LL £10K today, you enter a single TFR for £10K and at period end he will automatically get £10K less as there is now an expense in the ledger for £10K.

Note: when paying a Partner on account (when a company has been set up as a Partnership) do not follow the above guidelines. For further details see here.

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