NetLease - Termination with Multiple Payments
Use Case
When terminating a lease, any cash received or paid needs to be accounted for in the transaction. NetLease provides a single field to enter cash paid and a single field for cash received, but clients may have a use case where there are installment payments made over multiple periods as part of the termination.
Step by Step
NetLease separates cash from the actual termination transaction via the clearing account. So the short answer is that in this scenario, you will still put the entire cash amount to be paid/received in the relevant field, and then you will create multiple bills over the different periods, all coded to the same clearing account.
Note: The following flow will be shown from the perspective of multiple payments made (cash paid). For the reverse - Cash Received - its is the same flow, but you will create Invoices in NetSuite instead and the Clearing Account will be a Credit.
- Navigate to the termination page for the lease. Enter the full termination payment amount in the Cash Paid To Terminate Lease field.
- Enter any other relevant information and click Terminate.
- NetLease will create the Termination Journal where the entire amount will be credited to the Clearing Account.
- This Clearing Account balance will now need to be settled through a Vendor Bill coded to:
- Debit: Lease Payable Clearing Account
- Credit: Accounts Payable Account
- The dollar amount on the Bill will be for the first installment, and you will need to create additional Bills with the correct dates for the remaining installments.
- Please ensure that, on the Vendor Bill transaction line, you tag the NetLease Lease column with the correct NetLease Lease ID/name to properly associate the bill with the corresponding lease.