Deposits are typically refundable. But there can be certain deposits that are non-refundable. The focus of this article is to explain non-refundable deposits. If you need to record refundable deposits refer to this article.

A non-refundable deposit is a deposit that a tenant can not request back. 

Examples for non-refundable deposits include:

  • Parking Deposits
  • Pet Deposits
  • Key Deposits
  • Storage Deposits

To record a non-refundable deposit: 

  1. Go to ‘Accounting’ Tab and click onto  ‘Add’ dropdown and select add ‘Income’. 
  2. Enter Invoice Date and Due Date
  3. Charge Tenant or Owner by selecting the Payer
  4. Select the Property 
  5. Select the income account you want to <Credit>
  6. Amount of non-refundable deposit amount

Once an income has been recorded as a charge you can mark it as ‘paid’ once payment has been received.

NOTE: 

  • Non-refundable deposits is always an income account. If you need to add another income account for a non-refundable deposit, go to Chart of Accounts and add a new account. 
  • Non-refundable deposits are listed as income and appear on income statement and owner statements.
  • If you receive a payment from a tenant that you are required to return at a later date then it is a refundable deposit and should be recorded as a liability <read refundable deposit>. 
  • If a payment is for a compensation like rent or late fees, it should be recorded as income.
  • Some areas have specific laws regarding the handling of non-refundable deposits. If this is the case for you, please consult your accountant to ensure compliance.

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