cancel
Showing results for 
Search instead for 
Did you mean: 

Reply to message

View discussion in a popup

Replying to:
Not applicable

How do I record a security deposit I am putting up to one of my vendors on behalf of one of my clients?

The exact scenario is I am an independent consultant for multiple HR Outsourcing services.  The program I am setting them up with is one of my vendors.  I am putting up a $1,000 security deposit on my client's behalf which I expect to be refunded to me within a month or two.  The $1,000 is part of a service fee I have already billed my client and recorded as fee income.  This deposit will be refunded to me by my vendor within 6 weeks.  Below are a few details.

- I bill my clients an enrollment fee / service fee when they are starting with one of our programs.  In this example, $3,000 enrollment fee (assigned to Fee Income Account) of which $500 I pay to my vendor and record in a expense account for vendor enrollment fees.  

- This particular vendor is requiring an additional $1,000 security deposit for this client which will be refunded to me after several weeks.  I have already transmitted the $500 vendor setup fee and the $1,000 security deposit to my vendor.  I recorded the security deposit in the same expense account that I use to pay my vendor setup fees.  I am not sure if this is correct.  

Am I correct in assigning the security deposit to an expense account or should it be assigned to other assets?

When I receive the refund from my vendor and record it to the fee income account, will this be duplicating my that income since I have already recorded it to my fee income account previously? Or, should it be assigned to some other account to offset the income?

Solved

Need to get in touch?

Contact us