To end a tenancy early you simply need to edit the tenancy (Tenant Manager => Tenancies) and change the expiry date to the day they moved out. The software will then re-calculate that month's/week's payment (in case they moved out mid-term) and then delete all future invoices in the initial schedule. You mention that the payment schedule it making it difficult. Please could you explain further so that I can advise on a solution?
For the damage costs, go to 'Tenant Manager --> Tenancies --> Click on tenancy in question --> Click Deposit Scheme Tab and check 'Deposit Claimed from Custodian' check box. Enter the amount, account and click on save.
System will post the following transactions:
1. Debit the Cash/Bank Account
Credit Custodian Deposits (Asset Type)
2. Debit the Tenant Deposit (Liability Type)
Credit Other Income
Now, please go to Tenant Manager => Invoices => Click on the "Add Invoice" drop down list and select "Add Charge Invoice". Create an invoice for the damages but leave unpaid at this stage.
Finally, in order to pay off the charge invoice with deposit please go to Tenant Manager --> Invoices --> Add Credit Note
Enter the and make sure that you select "Other Income Account" in the Account drop down list.
Once you save the credit note, the "Allocate" button will appear. Click it and allocate the credit note to the charge invoice that you just created. What you should find is that the full deposit is allocated but that the invoice still has an unpaid balance (since you mentioned that the damages were more than the deposit). You can then send the invoice to the tenant for the unpaid balance, or, if you know that they will never, ever, pay the outstanding amount then you can issue a second credit note for the balance but this time select "Bad Debt" from the Item list.
The new tenant will be on a separate tenancy and will not be impacted by the damage cost arrears for this tenancy.