Accounting for Security Deposits

Nancy - Question regarding the accounting for Sec. Deposits:I currently have the deposits recorded as a liability. When the tenant moves out, and has a balance owed, I create a general journal entry to record the use of the security deposit and the offset of the journal entry is to the A/R for that particular tenant. Question is: why does QB show the adjustment in the A/R of the balance sheet at year end as a negative, when I am using the Security Deposit to pafor the outstanding invoice? I am applying the deposit wrong?

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    I use to do Security Deposits your way. However, thanks to a QuickBooks Guru named Amy on this forum , I now handle Security Deposits according to the Article she posted online called "Handling refundable deposits" written by QuickBooks. And it all makes sense and it works!

    When you handle Deposits you NEVER do it on an Invoice...thus your problem. It will show up under Accounts Receivable. According to the article Amy posted and according to my experience using it this way...This is the best procedure.

    RECEIVING A SECURITY DEPOSIT:

    ****Create a QuickBooks SUB(BANK) Account called CUSTOMER DEPOSITS.You will deposit all Security Deposits there.

    *****Create another QuickBooks account called (Deposit Liabilities) an Other Current Liability Account. This will make sure this money is not recognized as INCOME but an account that will be refunded to someone at a later date.

    When you receive the money from your Tenant or Customer.....

    1. Choose MAKE DEPOSITS from the Banking Menu

    2. From the Bank Drop Down list on the Deposit Slip choose the new SUB bank you created called CUTOMER DEPOSITS.(You want to make a sub account of your bank so that you can keep track of the exact amounts of money you receive as deposits from each tenant or customer) This way also gives you the precise financial reports you need for determining who gave what and who you owe when the time comes)

    3. Next type in the name of your Tenant or Customer in the Received From Column.

    4. Next choose from the Account drop down list DEPOSIT LIABILITY ACCOUNT (This will make sure that this money IS NOT treated as INCOME) (You can rename these accounts whatever name you want to name them that will help you distinquish a Security Deposit account from all other accounts)

    5. Next in the memo field type in Security Deposit

    6. then Cash or check as the method etc.

    7. Class (The property)

    8. The amount.

    TO PAY THE CUSTOMER/TENANT BACK

    1. Choose Write a check from the banking menu and wirte the check to the Customer/Tenant from the Customer Deposit SUB Bank you created and NOT from YOUR OWN BANK ACCOUNT. You want to make sure the money is being withdrawn from the Tenant or Customers own deposit account even though that account is part of your own bank account or holding account if you choose to open an individual Customer Deposit Account.

    2. Assign the check to your Deposit Liaiblity Account.

    3. Write in the description memo area of check of what this is for so that it will appear on your Reports.

    This is so much easier and better than the Acceptable General Journal Entries and accomplishes the same thing. Not showing Security Deposits as INCOME. (Who needs to be tossed into a higher income bracket...right!)

    If you use the General Journal way THE ACCOUNTANTS WAY, you will have to hand write a deposit slip and hand write a check in order to not have the deposits and withdrawals show up twice in QuickBooks,

    If you typed in a Journal Entry for the above and then Wrote a check or made a deposit the normal way in addition to the General Journal Entry, you will have double deposits or double withdrawals. Rem

    Remember the General Journal entries automatically enters the deposits and withdraws for you automatically..... It doesn't physically give you the opportunity to deposit or pay back monies received or owed. Journal entries are strictly adjustments on paper.
    So if you did it the General Journal way you would, as I said, have to manually write a check or manually make a deposit as you did in the old days! :)

    Thank you AMY for this bit of info...It is the BEST ! She is truly a guru!

    • Hi Nancy,  Thank you for all this info.  I was wondering how do I go about applying my tenants security deposit to their open balance?    Thank you!
    • Why do you want to apply their Security Deposit to their Opening Balance? And why do they have an Opening Balance to begin with?  Security Deposits are to be held in an "other current liability" account until the day the tenant moves out, or you apply money they owe you from that account. I notice that people are quite confused regarding this issue.  You need to setup two accounts.  One account in the Chart of Accounts as an Other Current Liability Account, in order to keep a "paper trail" of this tenants Security Deposit. You would then need to have a separate bank account for Security Deposits.  This is where you will deposit the actual cash. To use a Security Deposit you have to think in the reverse.  You need to write a check from the Security Deposit Bank Account.  Whether you are paying the tenant back the full amount, or you are paying a vendor or yourself for damages or money owed.  In order to remove money from a bank account, you need to write a check or withdraw it in some manner. Now you need to also show the withdrawal via "Paper Trail".  You must remove the paper trail from your Chart of Accounts Other Current Liability Account.  So when you write a check or do a withdrawal, you need to choose the Chart of Accounts Other Current Liability Account in the Account Column of the check or withdrawl form.  This is the only way it will zero out the bank account and at the same time, the Other Current Liability account. It's like a child putting M&M's in a cookie jar.  They put 100 M&M's in the Cookie Jar and underneath the cookie jar they put a piece of paper saying they put 100 M&M's in the cookie jar. When they remove the M&M's from the cookie jar to eat them the jar now becomes empty, so the little boy or girl puts another paper under the empty jar, and says I removed 100 M&M's from this cookie jar and ate them.  Now you have an empty cookie jar, and a note saying what happened to the M&M's that were in the jar.  The 2nd note offsets the first notes stating you had put 100 M&M's in the cookie jar. Nancy Neville Certified QuickBooks Pro Advsior, Landlord Consultant, Author of The Landlord's Guide to QuickBooks, Property Managemet in QuickBooks for Property Managers and more.  Video Tutorial available.  http://www.nancyneville.homestead.com  
    • How does your bank statement match quick books if the security deposit is returned throug the fictitious bank account?
    • HopeDrandoff, Why are you creating a fictitous security deposit bank account? Have you reconciled your bank fictitious account? It all depends on how you are entering the security deposit when received vs when they were paid.
    • Thank you! I have a similar setup: GOOD_CARE_DEPOSIT (sub of PAYPAL -bank account) where I deposit all my security deposits, GOOD_CARE_LIABILITY (other current liability account) where I record these amounts as liability. Scenario is as follows: 1) Guest pays a good care deposit $300.00. It is recorded/deposited in GOOD CARE DEPOSIT (bank account) 2) I create a liability of $300.00 in GOOD_CARE_LIABILITY and indicate the name of the guests in the memo. All good. 3)When I receive this amount ($300), Paypal charges $2.80 in fees. 4) When I refund this amount ($300), Paypal refunds $2.50 in fees. I end up $.30 short which I pay from paypal_bank_account.   (Paypal_Bank_account is where all the occupancy fee (i.e. rent) is recorded). All these occupancy fees also incur a paypal fee. I record all these paypal fees in Paypal Seller fees (which is a 'Cost of goods' sold) and would like to record the $.30 that I pay when returning a good_care_deposit in the same account (as it is a Paypal fee after all). I realize that using a cost of goods sold account for a fee has to be the wrong thing to do, but I don't see where else to record it. Any hint? My sequence goes as follows: Customer A pays $1000.00 for occupancy fee. Money goes into PAYPAL (bank account). $28.00 goes into Paypal sellers fee (cost of good sold). $972.00 is then transferred to Wells Fargo (bank account) via the check feature once the stay has been completed. Customer A pays $300 for good care deposit. Money goes into Good_care_deposit (Sub bank account of PAYPAL and is also recorded as a Liability under Good_Care_liability. Customer A leaves, all is ok, I write a check to guests for $300 from Good_Care_liability and need to balance it with 297.50 (the original amount refunded), $2.50 (fee refunded by Paypal) and $.30 (the fee I end up having to pay). How do I do this? Thank you!      
    • After further reflexion, it looks like perhaps I am making a mistake right from the start when I deposit the money directly in the PAYPAL BANK ACCOUNT. Should it remain undeposited funds until the fees are taken out at which point the remainder (amount received - fees) would be deposited into the bank account?
    • Tuiuiu01, Create a Paypal bank account - deposit the money into that account. Now your Paypal online account and the Paypal bank account should match. Then you transfer the money from Paypal to Checking.
    • Thank you so much Gita. I have done that already.  I think an accounting class may be in order for me as I am struggling with this when it should be so simple :-) All my guests are 'customers', but so is my 'paypal vendor (fees paid)" - where I record all the paypal fees. So, the money coming in goes into "Paypal bank account", with the fees recorded into 'cost of good sold -paypal fees". Then, the fees are recorded to 'paypal vendor (fees paid)" Checking is where the remainder of the money is eventually transferred.   UPDATE: ok, I  think I have this completely wrong. My paypal (fees paid) should be a EXPENSE not a cost of goods sold, and Paypal should be a VENDOR (not a customer) , correct?      
    • I haven't gotten a response, but I went ahead a redid the structure of my accounts. I now have a PAYPAL (BANK), a PAYPAL_CHARGE (EXPENSE) and a CONDO_RENTALS (INCOME) accounts. I have created invoices and I imported a file from Paypal (which basically shows the payment made by my guests along with the paypal fee). Once imported, this file has populated the 'make deposit' area. I see that my invoice is INCREASING my account receivable. Shouldn't it decrease another account? How do I link these deposits to these invoices? by 'receiving payments" or do I need to do another step? If I create a receive payment", I will deposit it into 'undeposited funds' rather than deposit directly into PAYPAL (BANK). Thank you.
    • man, this program is acting strangely. I discovered that my 'MAKE DEPOSIT" screen must be closed, for Quickbooks to actually prompt me to apply the money received to deposit.   In my case, I can't do this as I already have a file with my deposits important from Paypal. If I manually type in that I receved payments, I will be prompted to make a deposit and will therefore double deposit this amount. I am still stuck trying to figure out how to link the downloaded file to my created invoice.  
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    A Security Deposit in most states must be held in a separate Holding Account created for Security Deposits.  Some states require that it must be an Interest bearing account. Some states do not.

    For one thing never ever accept partial payments for Security Deposits.  If they don't have the full amount of money then they do not QUALIFY and they most likely will not have the money for rent in the near future.  You must TRAIN your tenants to understand that landlording is a business.  Rent is due when rent is due and not anytime during a rental month. 

    Let's say the tenant rents my home that rents for $700.00 a month.  In Michigan I can charge a month and a half Security Deposit so I require them to pay $1050.00.  Add that to the first months rent, they must give me a total of $1,750.00 to move in.

    When I get back to the office I type up an Invoice for their first months rent in the amount of $700.00 and I deposit $700.00 into my bank account for their first  months rent that they gave me when we signed the lease. 

    I now take the $1050.00 and do the following. (DO NOT TYPE UP AN INVOICE!

    Let's say the Tenants name is Raney Day.  I go to my Chart of Accounts and I click on new and choose bank from the list and type in Raney Day's name and I make it a sub account of the Security Deposit Escrow Account. (which is a bank account where I hold the tenants Security Deposits)

    I now click on new again and choose Other Current Liability and I type in Raney Day's name and make it a sub account of Tenants Security Deposits in Escrow. (Showing that this is money I must pay back to her)

    I now go to the Banking Feature in QuickBooks I click on Deposit. I choose Security Deposits in Escrow in the BANK FIELD WINDOW .  (Make sure you choose the Security Deposit Bank and not your own bank)  in the "Received from Column I type in Raney Day's name or choose it from the list.  In the From Account Column I choose Security Deposit: Raney Day.  I choose the type of payment and then the class and the amount I am depositing.

    I print out the deposit slip and take it to the bank with the money.  Now when you click on your Chart Accounts you will see Raney Day's Security Deposit on hold in the bank under her name, and under Other Current Liabilities, you will see Raney Day's name showing we are holding her $1050.00 as a Security Deposit.

    When you pay it back to her, you will write check from the Security Deposit Bank and you will choose her Security Deposit Other Current Liability Account in the account column and that will wipe both accounts out.  

     

    By doing it this way it doesn't show up as Income throwing you into a higher tax bracket.

    It doesn't show up in her tenant file or in your Profit and Loss.  You don't want it to show up anywhere, because it is not YOUR MONEY.  You CANNOT spend it, UNLESS you are bonded.  So if you don't see it, touch it, smell it, then you can't spend it.  When it's time to deduct damages or pay it back you will always know what the tenant paid in a security deposit by going to your chart of accounts by looking at the Security Deposit Bank Account, and/or the Security Deposit Other Current Liability Account.

    How sweet it is!

    Presented by Nancy Neville, Landlord Consultant and Certified QuickBooks Pro Adivsor.

    http://www.nancyneville.homestead.com

     

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      I would create a journal entry. Debit the Sposit account and credit accounts receivable with the customer name attached.

      Go to Receive payments and enter the name. Select the invoice and apply the credit. If there si an over payment, you can write a check to that customer. If there is still an outstanding bill, you can issue a credit and offset it to 'bad debt'.

      This is what I would try.

      Hope it helps,

      Laura D

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        What if the tenant owes you money and she gets money back what happens then? First of all each state has their own laws regarding this matter.  In Michigan I have to send the tenant an itemized bill for damages or money she owes me and I must do it within 30 days.   She has 30 days to contest the bill.   I have 45 days to sue her for the Security Deposit.  There is so much to talk about here that I don't want to go into all the legalities of it all, so let's assume that everything has been done according to the law and it's time to send her back her Security Deposit.

        You will do two things.  You will type up a check out of QuickBooks and choose her Security Deposit Bank Account.  Let's say she gets back $500 and we get $550 for damages or unpaid rent.  We write her a check out of her Security Deposit BANK, and in the account column of the stub of the check we choose Tenants Security Deposit: Raney Day and as a description type in Security Deposit Refund, type in the class (her rental unit) and the amount $500.00.  Print out the check and send it to her with a copy of the itemized bill.  (You should have sent her one before this but send it out with your check as a reminder of what she owed).

        Next write out a check from her Security Deposit Bank and make it payable to YOU or Cash for $550.00.  In the Account Column choose Tenant Security Deposit: Raney Day, type in for Damages as a description, type in her rental address under class and deposit that check into your checking account.

        If you are paying a vendor straight away, you can make the check payable to the Vendor from her Security Deposit Bank Account and do the same thing.

        If we keep it clean and logical, then everything falls into place. 

        In summary:  The tenant has their own bank account regarding their Security Deposit.  So when you pay it back you just write a check from her Security Deposit Account and that's that. But make sure you take it out of her Other Current Liability Account that is telling you that this is money that must be paid back.

        Just want to clear this up a tad bit more...

        You will have two Security Deposits Categories.  One is under Bank Accounts and the other is under Other Current liabilities.  In QuickBooks you always need a debit and a credit.  So the Bank Account is a Credit and the Other Current Liability is a Debit.  (Depending on if you are depositing or withdrawing the money).  

        Hope this helps this infamous question regarding Security Deposit. As we can see over 4000 views on this subject. 

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          You CAN use an invoice or a sales receipt to record a security deposit, as long as the item you use for that purpose is set up properly in your Item List.

          • I set up an Item with the liability account, instead of an income account, and use that to record sales reciepts and invoices with the deposits. This makes it all easy if it is combined in the same check, and then I use a credit memo when the tenant uses their desposit to pay the last month's rent, to move the money from the liability account back through the income account.
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          Go to Receive Payments and apply the credit. This should give you what you need, if I understand your post correctly.

          Laura

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            Hello,
            I'm trying to figure out if this might work for my situation. I have a homecare agency and when a new client starts with me, they are required to give me 2 weeks downpayment based on the services that they require. Based on what I read in QB Help, I record these client deposits as sales receipts. I have 2 clients who have now ended service with me, one passed away and the other went into a rehab center. They both have 2 outstanding invoices (we bill bi-weekly) and they both want me to apply their deposits to their last 2 invoices. One client will owe me money after I apply their deposit and I will owe the other client money. How can I take your suggestion and apply it to my situation where I'm dealing with invoices? QB Help suggested creating a invoice and enter the upfront deposit item using a quantity of -1 and make it equal to the deposit that you are using. But if you create a new invoice, you are never paying the original invoice and if you do that on the original invoice, you have a $0 invoice. Help!!

            Thanks!

            Vikki

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              Nancy - thank you for the info. That really helps.
              I have two more questions re: this issue:

              1. This sub acct for the deposits, how do you handle the actual cash that is received? Are you creating a physical acct at a bank for these deposits or are you depositing them in your existing check/save acct?

              2. How do you treat the payment of the deposit again monies that are owed to you, i.e. rent owed upon move out and damages?

              Thank you again for your help

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                On QB security deposits. Yes, I am OK with writing a check to the Tenant and debiting the liability account, say, Security Deposit. But what if part of the security deposit is used to repair tenant damages? e.g., initially, $500 deposit and at the end of the tenancy $250 is used to pay for tenant damages. So, Debit $250 expense, Credit $250 cash. But to do this we will need to convert part ($250) of the $500 Security Deposit liability to Revenue?
                EAS

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                  I would just clear out that $250 to 'Repairs & maintenance'.

                  Laura D

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                    Nancy,

                    Thanks so much!! Your psoting FIXED 98.5 percent of my problem. I can't seem to find another posting to cover the rest so I wanted to contact you directly.

                    Question: My deposits are NOT REFUNDABLE. I want to be able to apply the deposit to various 3rd party invoices I receive throughout the year for VOEs, Appraisals, Credit, etc. I want to write all of these invoices from the Deposit Liablility so I am only keeping the balance as income at year end.

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                      Nancy - thanks for a great answer for posting security deposits. One additional question I have -- in the case of needing to charge against the security deposit, say they damaged a wall and therefore would need to pay, say $100 out of the security deposit, how would you post this? I have received a security deposit and need to apply the majority, if not all of the deposit to pay for damages, instead of refunding the amount. How would I go about doing this?

                      Thanks!

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                        Nancy,
                        How should I handle security deposit that was received many years ago (before my QB entries) and the tenat lives off the security now?

                        Thank You for expert answers,
                        Julia

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                          How do we handle the accounting if we were the tenant and we are receiving our deposit back?

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                            I use the method by amy outlined above, but I'm discovering one limitation -- I have  a couple of tenants who are paying security by "installment" method ($50 a month until they reach $600 for instance) -- This amound it often mixed with the rent check, so a check for $650 would be $600 rent and $50 security, forcing a snafu. 

                            I can deposit the whole thing in checking, then do a transfer from checking to sub deposits account, and I can choose the liability account, but the problem is that it credits the statement balance for the tenant for an extra $50. Any ideas ??

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                              hotwired,

                              Here are simple steps:

                              Invoice: You have to create each month invoice, specifying which account the amount is for.  For eg. use items Rent for 600.00 and security deposit for 50.00 in an invoice.

                              Receive Payment: For that tenant and 650.00 will be applied to that invoice and accounts.

                              Security Deposit Transfer in the bank account: Transfer the 50.00 from the operating account to security deposit bank's subaccount.

                              Gita Faust
                              Advanced Certified QuickBooks ProAdvisor®
                              Enterprise Suite Certified | Point-of-Sale/Retail Solutions Certified
                              Member of Intuit Trainer/Writer Network
                              Author of "Accounting for Real Estate Agents" | "Manage Community Associations with QuickBooks" for Condo & HOA | "Manage Properties with QuickBooks" for property owners | "Manage Properties with QuickBooks" for property managers
                              http://community.intuit.com/members/Gita_Faust
                               

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                                Gita et al

                                Having fooled around with this a little, here is how I've ended up handling it.

                                1. I do NOT use invoice charges for the partial receipt of security deposit. It is not really income and I don't want it to show up as such, although that would make accounting in QB simpler

                                2. I simply split the deposit, so if a tenant gives me $600 ($550 for rent, $50 toward security) I "recieve payment" of only $550 then on the deposit screen, I add another line right under the $550 check for $50 and apply that to my security liability account.  I make the whole deposit to checking, then TRANSFER the $50 from checking to my security deposit CHECKING (asset) account.

                                 

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                                  I manage a strip center and have to deal with 2 to 10 security deposits every year.  My accountant prefers to show security deposits as income and when a tenant leaves as expense.  She says I should create a separate Excel sheet to keep track of security deposits.  But is there a way to both show them as income for a particular year and specified in the balance sheet?  

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                                    Security Deposits are something you can not keep, (unless the court says you can) therefore it is NOT INCOME and needs to be set up as an OTHER CURRENT LIABILITY ACCOUNT (money you need to pay back) (Why pay higher taxes on something that you can not keep!)

                                    If the Tenant owes for back rent or damages then when you pay the vendor make that a REIMBURSABLE BILLING account, charging the tenant for that expense and bill the Tenant.

                                    Send the Tenant an Itemized Statement for monies owed to you.  If the courts say you can keep the Security Deposit you can then deduct the damages from that Security Deposit Account applying it to the Tenants Invoice.  If it doesn't cover the total amount owed, send the tenant a bill for the difference.  If it is more than what is owed, you will have to return to the Tenant the balance due to the tenant.

                                    Nancy Neville, Certified QuickBooks Pro Advisor, Landlord Consultant, Author

                                    http://www.nancyneville.homestead.com

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                                      Hi Nancy,

                                      I followed your instructions. When I ran Statement of Cash Flows report, The security deposit shows up in the report as an in-flow. There is no out-flow to compensate for that. What did I do wrong? Thanks!

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                                        Since a Security Deposit is not to be used in any way, but stored in a "holding account", this money will not show up in a Cash Flow Report. However, it will show up in your Balance Sheet Detail Report.
                                         

                                        Nancy Neville

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                                          When ever you receive, pay back or forfeit security deposit use the Security Deposit Liability Account.  This will reflect accurately on all your reports.
                                           

                                          Gita Faust
                                          Advanced Certified QuickBooks ProAdvisor® Intuit Solution Provider | Enterprise Suite Certified | Point-of-Sale/Retail Solutions Certified
                                          Member of Intuit Trainer/Writer Network

                                          Author of "Accounting for Real Estate Agents" | "Manage Community Associations with QuickBooks" for Condo & HOA | "Manage Properties with QuickBooks" for property owners | "Manage Properties with QuickBooks" for property managers

                                          Consulting Company: www.FastTrackAccounting.com
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                                            Laura, I like Amy's entry idea, but I tried it her way and it threw off the bank balance, of course. I just made a separate bank rather than a sub-account of an existing bank. Is there something that I missed or didn't understand in your instructions? Thanks

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                                              Try this concept:

                                              • Create a Security deposit bank account, even if not required by your state commission
                                              • Create a Security deposit liability account
                                              • Receive the security deposit for each tenant
                                              • Apply the security deposit as damages
                                              • Refund the security deposit to the tenant.

                                              Gita Faust

                                              Advanced Certified QuickBooks ProAdvisor® Intuit Solution Provider | Enterprise Suite Certified | Point-of-Sale/Retail Solutions Certified
                                              Member of Intuit Trainer/Writer Network

                                              Author of "Accounting for Real Estate Agents" | "Manage Community Associations with QuickBooks" for Condo & HOA | "Manage Properties with QuickBooks" for property owners Buy/Rehab/Hold/Rent| for property managers | for Buy/Rehab/Flip/Short Sale | for commercial properties release date March 2010

                                              Consulting Company: www.FastTrackAccounting.com
                                              Publishing Company: www.ExpertPublishers.com
                                               

                                               

                                              • Is there a way to change/edit an already existing security deposit account set-up as a liability account in QB, but where the funds have not been identified seperately in a security deposit bank account. In other words, the funds are intermingled in the regular operating account. Additionally, it appears that there was an opening balance put in without any identification as to what tenants these funds belong to.  
                                              • EFroh, Yes you can. You should have a Security Deposit account as a Current Liability account. If I was you, go and enter deposits for each tenant, so you have a report. Make it easy for you in the coming years when you have to return the deposit to the tenant.  
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                                              You should see your Security Deposit  (liability) account on the Cash Flow Report.  You cannot remove a Balance Sheet account from the Statement of Cash Flow.

                                              To customize your Cash Flow Report - View the Statement of Cash Flows and click on Classify Cash.

                                              Gita Faust
                                              Advanced Certified QuickBooks ProAdvisor® | Enterprise Suite Certified | Point-of-Sale

                                              Author of "Accounting for Real Estate Agents" | "Manage Community Associations with QuickBooks" for Condo, HOA, Time Share & PUD | "Manage Properties with QuickBooks" for landlords Buy, Rehab, Hold and Rent| for property managers
                                              Preorder: for Buy, Rehab and Flip | Foreclosure , Short Sale | for commercial properties | Real Estate Broker

                                              Consulting Company: www.FastTrackAccounting.com
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                                                In the Balance Sheet, both Assets and Liab will display every one of the security deposit accounts.  Is there any way to change that to just show the roll up total of all deposits?

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                                                  Here is a quick trick - when view the Balance Sheet report click on Collapse.

                                                  Gita Faust
                                                  Advanced Certified QuickBooks ProAdvisor® Intuit Solution Provider | Enterprise Suite Certified | Point-of-Sale/Retail Solutions Certified
                                                  Member of Intuit Trainer/Writer Network

                                                  Author of "Accounting for Real Estate Agents" | "Manage Community Associations with QuickBooks" for Condo & HOA | "Manage Properties with QuickBooks" for property owners Buy/Rehab/Hold/Rent| for property managers | for Buy/Rehab/Flip | Short Sale | Tax Liens | Commercial Property Management | Real Estate Brokers

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                                                    Nancy or Gita, thanks for all of your help on this forum. 

                                                    Question about TRANSFERRING SECURITY DEPOSITS between bank accounts:

                                                    I received all deposits, including rent and security deposits into one bank account--call it the "Rental Income" account.  I would like to transfer part of this money out into a separate bank account for only security deposits, the "Security Deposit" account--and I then want this amount to reflect as a Current Liability (an account called "Tenant Security Deposits Held"). 

                                                    However, when I try to enter this transaction out of the "Rental Income" bank account, I need to choose an account, and I can either choose the bank account "Security Deposit" or the current liability account "Tenant Security Deposits Held," but not both. 

                                                    If I choose the bank account, it won't be reflected as a Current Liability, and if I choose the current liability account, it won't show up in the "Security Deposit" bank account.  Please help!!

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                                                       OK, I finally figured out on my own about deposits and withdrawals when the deposit goes back to the tenant.

                                                      Who do you make the check out to when the deposit is retained for damages, no notice of moving or a myriad of other reasons?  Do you make the check from the liability account to the sub bank account for that unit?  

                                                      I have each of my units listed as separate accounts so that I can view all the transactions for a particular property.  

                                                      When the deposit is retained, then it become income which is offset by the repairs done for the unit, but the tenant isn't involved anymore.  Some times the repairs cost more than the security deposit and would be reflected in the expenses.

                                                      OK, I made a customer payment but it doesn't show up if I run a report on cash rather than accrual, unless I make a statement charge that the payment can be made against.

                                                      I just realized that my return of the SD from the savings account has to be put into my actual bank account so that I can write them a check and write checks for payments for the cleaning etc that I deduct from their check.

                                                      Then I want to run a report.... how do I get the items I need into one report to send to the tenant?

                                                      Th

                                                       

                                                       

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