How to properly account for tenant monthly Common Area Maintenance (CAM) payments?
Some of our commercial tenants send us a monthly estimated CAM payment. I normally book their payments under income and the actual expenses under an expense account. Normally, or hopefully, the total CAM income for the year matches closely to the actual CAM expenses for the year. This system works fine however I would like to somehow also book the tenants monthly CAM payments as some type of liability. This way although there was cash in the account I could clearly see that some of that cash should be left in the account to cover CAM expenses the tenant had paid for in advance. For example, based on a recent issue we faced. In February of last year the owners of this given property requested we distribute all the surplus cash to them. We gave them all the cash in the account but didn’t factor in the two months of CAM income the tenant had sent us. Later in the year the property tax bill came and we were short because we had sent this cash out. If I had shown this on the balance sheet s
