Security deposits are kept in order to make sure that damages and overdue payments can be adjusted easily. In QuickBooks, users can record the security deposits as well as apply these deposits to the relevant liability accounts and assets. By using reporting tools, you can even analyze the data related to your security deposits. Now, you must be wondering how to record security deposit refund in QuickBooks. If so, let’s read ahead.
The guide has the purpose of teaching you how to record return of security deposit in QuickBooks. In addition, you will explore how to record security deposits and rent security deposits in QuickBooks Online.
How to Record Security Deposit Refund in QuickBooks Online?
In case you have recorded a security deposit with a Check or an Expense then you can simply post the refund by using the Bank Deposit. All you have to do is select your bank and add funds to the deposit. Later, you can choose the landlord and the account to enter the security deposit refund. Once you add the refund amount, you can save the details.
To learn each step for how to record security deposit refund in QuickBooks, you can go through the following instructions:
- In “QuickBooks Online”, click on the “Plus (+)” icon.
- Then, choose the “Bank Deposit” option.
- Now, the “Bank Deposit” window lets you select the bank where you wish to send the amount.
- At this moment, you can scroll down and find the “Add funds to this deposit” option.
- Here, you can choose the landlord from the “Received From” column.
- Now, from the “Account” section, you can select the account that you selected while giving the security deposit.
- Under the “Description” section, you can add the “Security Deposit Refund”.
- Doing so, the refund amount will go to your “Account” section.
- After that, you can click the “Save and close” button.
This is how you can record the security deposit refund in QuickBooks Online. It should be noted that using the same account of your first entry to deposit the amount will delete the balance from the landlord’s profile.
How to Record a Security Deposit in QuickBooks?
To record a security deposit in your QuickBooks account, you may need to create a liability account. Make sure you name the account to Other Assets. Thereafter, you can create the new product and give it the name Security Deposits.
To understand the whole procedure, have a look at the following steps on how to record security deposit in QuickBooks.
- Navigate to the “Chart of Accounts” menu in the QuickBooks account.
- Then, create an account for liability.
- Name the liability account as “Other Assets”. You can use this account to collect assets such as security deposits and rent.
Important Note: Those who give security deposits should create a liability account instead of creating an asset account. Then, name this account as Other Liabilities.
- After that, you can start creating a new product.
- You can name this product “Security Deposits”. This will contain information related to the security deposit made to you or by you.
- Once done, you can map the product to other liabilities or other assets.
- Those who receive security deposits can also create sales receipts in order to make it reflect in the right account.
- In addition, users who give security can make a Bill so that they can map it to the right account.
- When you are done, click the “Save and Close” button.
As you create, store, and map the security deposit correctly, you can continue creating the reports using them. The data (related to these deposits) can be viewed in the financial statement in the QuickBooks account. Remember to note these numbers as you create the financial statements.
Note: Incorrect details related to these deposits can cause issues while matching the financial statements such as a ledger, balance sheets, and others. It becomes difficult to solve such inaccuracies.
If required, you can reverse or refund the deposits or directly delete the deposit account related to them.
How to Record Rent Security Deposit in QuickBooks?
If you have received rent from your tenant, you can record it as rent security deposits in QuickBooks. All you have to do is create a new item from the List menu. Then, choose the type of service, give a name to the item, and set it as a liability account. Thereafter, you can record the payment using the sales receipt.
Here are the steps for the same:
- Navigate to the “List” menu located on the top.
- Then, choose the “Item List” option.
- Here, you can click on the “Item” and choose the “New” button.
- After that, choose the “Service” by using the “Type” drop-down.
- Once done, you can add the “Item Name” and enter the required field.
- Now, you can choose the “Liability account” from the “Account” drop-down menu.
- Hit the “OK” button.
Now, you can follow the same steps in order to create the item for your first month’s rent if you have received any. Once done, you can now continue recording the payment. For this, you will have to create the sales receipt.
- Click on the “Customers” menu.
- Then, click on the “Enter Sales Receipts” option.
- Choose the tenant from the “Customer: Job” drop-down menu.
- After this, you can enter the necessary details located on the top such as the “Sale No.” and “Date” buttons.
- Now, you can select the security deposit on the 1st and 2nd line items. It also includes the first month’s rent items.
- Here, you can add the amount for each item.
- Once done, click the “Save & Close” button.
Now you have learned how to record rent security deposit in QuickBooks. Make sure you enter the details and amount correctly.
We maintain security deposits to ensure that damages and overdue payments adjust easily. If you are new to such a thing, we have helped you throughout our guide. Here, we have shown you how to record return of security deposit in QuickBooks. Along with this, you can record the security deposit and rent the security deposit in QuickBooks.
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