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kbsitz
Nov 28, 2018 12:01 AM UTC
Question

How do I record a security deposit that My Customer is asking for?

Background:  I am a Real Estate independent contractor and my brokerage requires that a security deposit be held.  The security deposit is refundable upon exist but held for non payment of fees, if outstanding  fees occur prior to exist.

Question:  My Sales Commission checks have already had the Security Deposit taken out  - How should the "Security Deposit" account be created in the Chart of Accounts in QB?  

    8 replies

    lynda11_2
    lynda11_2
    Level 5
    Nov 28, 2018 12:31 AM UTC

    Hello @kbsitz:    Here is a link to a post I did on security deposits.   You will basically show the entire deposit but add a line item for the security deposit.   The security deposit will be a liability account.  

     

    I hope it helps.  If you have more questions, feel free to reach out.   Real Estate is on of my favorite topics and I have many customer's that have this type of business, including my own properties.

     

    Lynda

      kbsitzAuthor
      Nov 28, 2018 1:57 AM UTC

      Lynda,

      Thank you for your reply.  If I setup the "Security Deposit" as Account Type & Detail Type "Other Current Liabilities" - the description reads "to track liabilities due within the next twelve months that do no fit the Other current liability account types".  Would this still be accurate to use even though I may not get My Security Deposit back from the brokerage for years to come?  (I would only receive it back when I leave the brokerage.)  Just confirming.

       

      Also, there is a spot when setting up the Account for "Unpaid Balance" "As of" date.  Do I leave that blank?

      klaing7
      Mar 13, 2021 10:09 PM UTC

      How do I categorize a security deposit refund in quickbooks?

      mv32
      Level 8
      Mar 14, 2021 12:22 AM UTC

      Hi @klaing7.

       

      You can utilize the same account used when you deposited the customer's deposit. That way, the amount you get back is deposited and you use that same deposit expense as the source account for the deposit.

       

      For more details about prepayments in QuickBooks Online (QBO), here's a great article you can check out:  How to Record A Retainer or Deposit.

       

      You can also consult your accountant for professional advice if you need help in categorizing transactions to the correct accounts.

       

      Feel free to place a comment if there's anything you need assistance with recording transactions. I'm looking forward to working with you again.

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