Refundable security deposit

I am raising an invoice and creating a line for Refundable Security Deposit, posting said amount to Suspense account. when client is refunded amount(make payment) from current account it will automatically take it out from Suspense account. This appears to work easily, am I missing something? screen shot of print out below.
Anyone have another method of dealing with this (without giving credit notes)

Here is the repayment detail

Well… for reporting purposes this is not correct. You can do that the way you do it if you want, but the right way to record deposits is to create an accounts payable account for this sole purpose. You can create one and name it “Security deposits payable”, “Refundable deposits”, for example, and when you make an invoice you should affect this account so your payable should increase and when you refund the deposit affect this account again so your payable will decrease. You could use the suspend account but the downside using this method is that a suspense account is not payable, not asset, not income and not an expense, so for reporting purposes the account must be reclassified to the correct term. Also, another downside to use the suspense account is that you could have a bunch of transactions in this account that are not necessarily security deposits because maybe you forget to assign the correct account to one or three transactions and then the balance is not for the refundable deposits only. Creating an accounts payable account for this also gives you the possibility to see a history of your refundable deposits transaction in case you need one in the future. I hope this could help. Cheers!

Thank buddy thats great, perfect answer…yes i should do it properly incase other amounts get posted by accident…:slight_smile:

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@m1sty222, you should never post to Suspense on purpose. See this guide:

yes thanks for that , i thoght so much but was trying to do a quick fix… ok now seen previous response ta…

Quick fixes in accounting almost never are. :wink: