Business case:
Client has rented out apartment for 3 years with 1 year lock in period. Rent for first full year (lock in period) has been collected in advance & billed for full year to client in advance. Client is using Accrual/ deferral function as well.
Tenant intends to vacate the apartment after say 8 months i.e. before lock in period. As per the process, he is allowed to vacate but he will not get the refund for the rent for next 4 months since he is under lock in agreement. Tenant has no issues in that.
Issue:
The issue is the moment we change the contract end date, system reverses the posting for rest 4 months which has already been billed in advance If we do not change the contract end date,
a) we will not be able to lease out this apartment to someone else till the end of 12th month
b) we will not be able to recognize the rest 4 months rental as revenue in 8th month (Deferral)
Expectation from system:
i) System should record the exact vacation date of the tenant
ii) We should be able to lease the space out to someone else from 9th month onward
iii) 4 months unutilized rental that is lying as advance should be posted as Revenue in 8th month end deferral run.
iv) System should not reverse the billing for the contract for unutilized period.
Please advise how can we handle this?