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Frequent Contributor *

Tenant security deposits

I received a check for a tenant security deposit and 1st month rent. How do I deposit this so that the tenant doesn't show a credit.

Thank you,

Solved
Best answer 01-23-2019

Accepted Solutions
QuickBooks Team

Re: Tenant security deposits

Thanks for visiting the Community, @oldnotdead.


I’m here to walk you through the steps in recording the security deposit and 1st-month rent you received from your tenant.


First, let’s create an item for the security deposit and 1st-month rent, then link them to a Liability account. Here’s how:
1.    Go to List from the top menu and select Item List.
2.    On the Item List window, click Item, then New.
3.    Select Service on the Type drop-down.
4.    Enter the Item name and fill in other necessary fields.
5.    On the Account drop-down, select a Liability account.
6.    Hit OK to save the item.
7.    Follow the same steps to create an item for 1st-month rent.

 

 

 


Check out this article for more information: Add, Edit, and Delete items.


Once done creating the items, record the payment by using a sales receipt. Here’s how:
1.    Go to Customers menu and select Enter Sales Receipts.
2.    Select the tenant on the Customer: Job drop-down. 
3.    Fill in the relevant information at the top of the form like the Date and Sale No.
4.    On the first and second line item, choose the security deposit and the 1st-month rent items respectively.
5.    Enter the amounts on each item.
6.    Hit Save & Close.

 

 


You may take a look at this article for reference: Create sales receipts.


That should answer your question for today. Please let me know if you need anything else, I’m always here to help. Take care and have a great day!
 

12 Comments
Frequent Contributor *

Re: Tenant security deposits

I need to add that I have the Tenant set up as a job and the security deposits as "security deposits held by other", other current asset.

QuickBooks Team

Re: Tenant security deposits

Thanks for visiting the Community, @oldnotdead.


I’m here to walk you through the steps in recording the security deposit and 1st-month rent you received from your tenant.


First, let’s create an item for the security deposit and 1st-month rent, then link them to a Liability account. Here’s how:
1.    Go to List from the top menu and select Item List.
2.    On the Item List window, click Item, then New.
3.    Select Service on the Type drop-down.
4.    Enter the Item name and fill in other necessary fields.
5.    On the Account drop-down, select a Liability account.
6.    Hit OK to save the item.
7.    Follow the same steps to create an item for 1st-month rent.

 

 

 


Check out this article for more information: Add, Edit, and Delete items.


Once done creating the items, record the payment by using a sales receipt. Here’s how:
1.    Go to Customers menu and select Enter Sales Receipts.
2.    Select the tenant on the Customer: Job drop-down. 
3.    Fill in the relevant information at the top of the form like the Date and Sale No.
4.    On the first and second line item, choose the security deposit and the 1st-month rent items respectively.
5.    Enter the amounts on each item.
6.    Hit Save & Close.

 

 


You may take a look at this article for reference: Create sales receipts.


That should answer your question for today. Please let me know if you need anything else, I’m always here to help. Take care and have a great day!
 

Frequent Contributor *

Re: Tenant security deposits

Thank you for the information. It is very useful. 

Thanks again,

QuickBooks Team

Re: Tenant security deposits

You're welcome, @oldnotdead.

 

If you need anything else or further assistance working with QuickBooks, don't hesitate to let me know. I'm always here to help. Take care and have a great day!

Not applicable

Re: Tenant security deposits

We followed your instructions on recording security deposits.  But now how do we record a refund of the security deposit.  We are a new community member following your instructions.

QuickBooks Team

Re: Tenant security deposits

Hi there, @posh.

 

Thank you for joining the thread. Allow me to help share information on how to create a refund for security deposit in QuickBooks Desktop (QBDT).

 

If you've use a liability account for the security deposit, you can write a check for the amount to refund.

 

To create a check:

  1. Go to Banking at the top menu bar.
  2. Select Write Checks.
  3. Fill in the necessary information.
  4. Select the liability account you use for security deposits.
  5. Select Save and close.

That should allow you to record a refund for security deposit in QBDT. Don't hesitate to add a comment below if you have any other concerns about security deposit, I'm always here to help!

Not applicable

Re: Tenant security deposits

I’ve read your steps on creating items and recording tenant security deposits.  It works well and the accounting looks correct.  My questions is when it comes time to refund the deposit and there are costs or damage to deduct from the deposit how are those items recorded.  The method I currently use seems redundant and overly complicated .  I’m hoping you have a simpler way to handle these transactions.

 

Thank you,

 

S adams

QuickBooks Team

Re: Tenant security deposits

Hello there, @SaaSam.

 

Thank you for joining this thread. I can share some insights about refunding or deducting a deposit.

 

You can record them as a credit card memo, I'll show you how:

  1. Click Customers.
  2. Select Create Credit Memos/Refunds.
  3. Select the customer name.
  4. Enter the necessary information.
  5. Click Save and close.
  6. On the Available Credit window, choose one of the following:
    • Retain as an available credit 
    • Give a refund
    • Apply to an invoice 
  7. Select OK.

 

To provide them the amount, you can either issue a refund through the Receive Payments or Write check window. For detailed instruction, please use this article as a reference: Record a credit memo or refund in QuickBooks Desktop.

 

I also recommend seeking an accountant for an expert's advice to ensure there will be no problem with the books in the future.

 

That's it. Let me know if there's anything else you need, SaaSam. Just add a comment or mention my name. Have a good one.

Community Contributor *

Re: Tenant security deposits

Perfect! Thank you!

QuickBooks Team

Re: Tenant security deposits

I'm glad to hear everything is running smoothly, lhung. The Community always has your back if you ever need assistance again in the future. Have a wonderful day ahead.

Not applicable

Re: Tenant security deposits

Why is 1st month's rent a liability account also? Shouldn't it be an income account?

QuickBooks Team

Re: Tenant security deposits

Thanks for joining us here in the Community, @miranda2.

 

Let me share some clarifications about the correct account to be used for rent in QuickBooks Desktop.

 

The liability account was used to account tenants' security deposit since this can be given back to the tenant by the time he stops from renting. On the other hand, rent is recorded under the income amount because this is already a money in transaction for the business. 

 

For more details about the workflow of the accounts in QuickBooks Desktop, you may refer to these articles:

This should get you moving today.

 

Feel free to reach back out to me if you have any other questions with accounts or any QuickBooks related things. I'd be happy to help you out. Have a great day!

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