Use Prepayment when you can allocate the payment to a specific Charge Type and a specific future billing date. When the automatic future charge is created the charge will be matched with the prepayment automatically.  Both the prepaid amount and the charge will be closed out and not show on an open item statement. If you post a payment to an open credit, you must manually apply the open credit to charges when they are created in the future. Use open credits when a tenant overpays or prepays an unusual amount and you don't know the reason for the payment.

Thank you!! After reading this a few times and talking with someone from support, I have realized that we may not be using our program in the most effective way. If you have multiple people sharing an apartment- 3 people in a 3 bedroom, for example- Do you have an account or code for each individual payee? We have had problems with prepayments since we use only ONE tenant code per lease, and use the "drawer" field in Cash Receipts to specify which tenant is paying. I am wondering if that is the root of our difficulty with using prepayments...

Usually you want your accounting system to track the legal structure of your lease. The situation you describe, with three roommates in a three bedroom apartment, would typically be all included on a single lease, with each roommate jointly responsible for all obligations under the lease.  So I believe your current method of billing the "lease" for the full amount of the rent and processing the 3 separate payments against the single rent charge for the lease is the preferred way to go.   Identifying the "Drawer" for each check you receive may be useful for answering inquiries from the tenants. But any one tenant's payment is actually payment for the joint liability of all tenants, and from the landlord point of view, you don't really care whose check pays the rent.

Usually you want your accounting system to track the legal structure of your lease. The situation you describe, with three roommates in a three bedroom apartment, would typically be all included on a single lease, with each roommate jointly responsible for all obligations under the lease.  So I believe your current method of billing the "lease" for the full amount of the rent and processing the 3 separate payments against the single rent charge for the lease is the preferred way to go.   Identifying the "Drawer" for each check you receive may be useful for answering inquiries from the tenants. But any one tenant's payment is actually payment for the joint liability of all tenants, and from the landlord point of view, you don't really care whose check pays the rent.