Recording a customers Security Deposit

Question asked by Adam Stanley 7 years ago

Hi all,

We hire equipment to our customers. Whilst they have the equipment we take a security deposit - this is normally in the region of £500. What's the best way to record this as it's technically not income, so don't want to show it as 'revenue'. This deposit then gets refunded back to the client when they return the equipment.

Any advice or tips much appreciated.

Many thanks, Adam

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2 Replies

Hi Adam

Setup a new account code in Settings>Accounting>Account codes called "Security deposits" under account type "Current liabilities" making sure you tick both the boxes for show in sales and purchases.

Then allocate the money arriving and being refunded to this account the balance on which at any time will represent deposits held, yet to be refunded.

Best answer
7 years ago

Thank you @Paul - that's fantastic. Adam

7 years ago

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