How do I record a deposit that we are holding?
Where your organisation requires deposits to be paid, for example against a hall hire booking, this article covers the two options for how to record the deposit in ExpensePlus. The article also covers how to return a deposit that's refundable (as opposed to a deposit that's a down-payment / partial payment); and explains the need to reverse adjustments where a deposit was deferred income.
In this article:
Option 1 - create a customer invoice to record the income
One option is to simply use the Invoicing module to create a customer invoice for the deposit, then allocate the incoming deposit as an invoice payment. For more details, see How to create an invoice.
Option 2 - record the income without an invoice
Alternatively, you can bank match the income without issuing an invoice. To do this:
- either reconcile the deposit as 'Other Income' or 'Bank Deposit' via the bank matching screen - for more information on how to do this, see the Bank Reconciliation Module Overview
- or, if it's cash or a cheque, record it as 'Other Income' via the Bank deposit screen - see How do I record bank deposits?
To allocate the money as income, simply follow the same process as you would for any other income transaction, allocating it to the relevant income category or creating a new income category as appropriate.
If you create accounts on an accruals basis, if the deposit you are holding is of material value and you are still holding it at the end of the financial year, you would typically create a Deferred Income adjustment in the Adjustments screen for the money being held (this is not relevant if you create accounts on a receipts and payments basis).
See more in this help guide article on deferred income.
Returning a refundable deposit
For deposits that are non-refundable and are simply part of the overall total the customer needs to pay (e.g. a down-payment to secure a booking), there is no need to deal with deposit income any differently from regular income.
For deposits that are refunded (less any deductions such as breakages/cleaning), you should simply make a payment from your bank.
- If you originally created a customer invoice for the deposit (option 1 above), then you should create a customer credit note. When the transaction appears on the left-hand table of the bank matching screen, you should match it by selecting the 'Payment of Credit Note' option.
- If you recorded the original deposit as 'Other income' (option 2 above), then you should match it using the 'Income repayment' option.
In either case, you should select the same fund and income category as you did for the original deposit.
Returning a deposit that was deferred income
If you created a Deferred Income transaction via the Adjustments screen when the deposit was received, then once the deposit is returned, the adjustment transaction should now be reversed. This is also the case for non-returnable deposits or where a deposit is retained (e.g. to pay for breakages). Learn more here about recording adjustments.
Deposits held for residential property, rented out through an Assured Shorthold Tenancy scheme, should be protected (held independently in the deposit protection scheme). You can read more about this on the government website.
To better understand the Bank Reconciliation module, please view the module overview video here.