Most independent landlords still manage rent payments offline: Tenants send a monthly rent cheque through the mail, and landlords deposit it in their bank. Whether you should switch to an online payment service is another story — but if you prefer to receive payments the traditional way, you should think of it like any other transaction and provide (or be willing to provide) a receipt.
A rent receipt can be helpful for tenants, offering additional documentation that the payment was received. But it’s also useful for landlords, providing you with a streamlined way to track all payments as they come in — so be sure to save a copy for your own records, too.
HERE ARE 4 REASONS TO GIVE YOUR TENANTS A RECEIPT FOR THEIR RENTAL PAYMENT.
Rent receipts create a paper trail for cash payments
Now, you may not accept cash, and that’s fine — just include the provision in your rental agreement. But if you do, a receipt shows proof of payment for funds that otherwise cannot be tracked. If you ever get audited, you’ll need to have a way to document your rental deposits. The same applies to payments made by money order, which more landlords are willing to accept.
Rent receipts simplify your record keeping
Your landlord business is just that — a business. And accounting is an important part of any business, especially when the financial transactions are as large as monthly rent payments. Whether you do your bookkeeping using rental-specific software, a rental income and expense spreadsheet or paper files, keeping a hard copy or digital PDF of a rent receipt provides a consistent way to track and verify every payment received.
Rent receipts can help minimize disputes
If a tenant claims to have made a rent payment you never received, a rent receipt — or lack of one — will tell the tale. Should any rent-related issue escalate, having a clear record of payments received might also boost your credibility and help support your case.
Rent receipts don’t protect cheque-bouncers
You might be concerned that if you provide a rent receipt and your tenant’s cheque bounces, they can use the receipt to claim the rent was paid. That is not the case: The rent receipt doesn’t afford them extra or special protection, and the returned cheque is ample proof that while the payment was received, it was not valid.
A rent receipt is an easy way to document rental funds as you receive them.