How to account for passing on costs (like electricity and water) to lessor
Rusticus du Preez
Member Posts: 7
I am renting out a property and have created monthly invoices to the lessor for the rent amount. There are other ( variable) costs like electricity that they are responsible for too, however I have to pay those bill and then pass on the cost to the lessor. What is the best way to do the accounting for that in wave?
My first stab at a solution is to create a 'product' called 'electricity' that I both 'buy' and 'sell'. When I get my monthly bill, I create a invoice for the amount that I sell to the lessor. Then it forms part of his statements and I can keep track of it etc.
My plan is to use the same income account than the expense account which would then make the 'income' I receive from the buying and selling of the electricity zero.
Is this a weird hack I'm doing? Is there a more elegant/correct way of doing this?
Comments
Hi @Rusticus du Preez! You're doing just right.
When you get the bill for your unit, you can enter it as a bill, paid with your bank account under the "utilities" expense account. You would then create an invoice with the different utilities as items.