How to close a tenancy and write off arrears when the tenant owes money

Created by RevQore Support, Modified on Tue, 26 Mar 2024 at 12:34 PM by Ella Kitching

In this scenario, the tenant is behind on rent payments and has indicated that they won't pay it back. We need to write off part of it as a bad debt. The remainder of the arrears will be allocated against the deposit that was taken at the start of the tenancy. The tenant owes £1400. We Already have their £900 deposit. The remaining £500 we will need to write off. 

Step 1 – Write off Bad debt Therefore we add a bad debt write off transaction of £500 and allocate this to outstanding rent. See video for writing off the bad debt –


Tenant Rent Statement > Add transaction > Bad debt write off > Enter Details > Save Transaction You now must allocate this to the outstanding charge. 

Step 2 - Go to the close tenancy screen and allocate the deposit


Find ‘close tenancy’ at the top of the screen. Next, you allocate the deposit to the rent statement. This will balance against the overdue invoice.


Step 3 – 'Proceed' and close tenancy Click proceed, at the bottom right of the screen. This will close the tenancy. The total refundable in the example amounts to  £0.00.

Step 4 –  Xero users only If you have a custodial scheme control account in Xero, you will have to create a transaction that reconciles with the money received from the DPS. As always, when receiving any money from a custodial scheme, use the create function: 

Who – Select the custodial scheme 

What – The Nominal Account set up for your custodial 

Why – Description 

Units/Properties – Tracking codes for unit and properties

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