Overview:
In Cradle's Initial Recognition tab, you can select preset payment frequencies from weekly to annually. For special cases, such as a payment every two years or a single payment for the entire lease term, you can manually enter the desired frequency by accessing the "advanced option" in Cradle.
How to Input Reoccurring Lease Payments That Are Greater Than One Year
Video Length: 1 minute
The video above provides a step-by-step guide on how to handle lease payments with a frequency greater than one year. Alternatively, below are the written steps on how to set up lease payments with a different frequency. Here are the steps:
Step 1: When you are entering a new lease, scroll down to Payment Inputs
Step 2: To customize the Payment Frequency click Switch to advanced
Step 3: Select your preferred payment interval, which can be days, weeks, or months. In this example, we'll choose months
Step 4: Enter the number of months in the data field. For example, if you want to make payments every 2 years, enter 24 months
Bonus: If you want to ensure that your lease payments are meeting your expectations, refer to the events tab and run the events for the agreement
FAQs:
How can I make a single lease payment for the entire lease term, such as one payment over a 5-year period? Watch the video below to learn how to input a single lease payment for the entire lease term.
Video Length: 56 seconds
Why does the lease liability become zero after the first month when there is a single payment made for the entire lease term? The calculation of the lease liability in net present value in this case only includes one payment, without any additional future payments to consider. As a result, the opening balance of the lease liability is reduced by the same amount as the lease payment, resulting in a closing balance of zero.
Further Reading:
How to add events such as a renewal or contract expiry