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Recording security Deposits but not in books

  • 1 September 2023
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Hello community,
I have come up with a scenario, where I would like to record a security deposit along with prepayments.
So for eg: if I have an equipment to rent with rental price of 100$. And I want the customer to prepay (200%) of the complete rental price along with the security deposit. So Rental price = 100$ and Deposit = 100%. But I dont want the security deposit to be recorded into books as I would then be refunding the deposit completely. How can we achieve this in Acumatica?

Thanks in advance.

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Best answer by meganfriesen37 5 September 2023, 16:08

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Laura02
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Hello,

For accurate accounting in your accounting system, I recommend that the 200% prepayment and the security deposit is recorded on the customer’s account, possibly as separate payments.

When your equipment is returned safely, you can issue a Refund to your customer:

Version 2023 R1 Receivables → Payments & Applications screen

Laura

 

 

Laura ~ Klear Systems, Inc. Irvine, CA. ~ Please remember to "Mark Best Answer" to help those who are facing the same problem.~
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Hello,

For accurate accounting in your accounting system, I recommend that the 200% prepayment and the security deposit is recorded on the customer’s account, possibly as separate payments.

When your equipment is returned safely, you can issue a Refund to your customer:

Version 2023 R1 Receivables → Payments & Applications screen

Laura

 

 

Hello @Laura02 , 

Thank you for your prompt reply, but the scenario here is customer would pay for both rental and deposit part → both would be displayed as separate → I would record prepayment under income category and since I don’t want to record deposit as an Income how about if I would record it under a separate cash account which doesn’t require to be audited for taxations.

What else can we do in such a scenario?

Thanks in advance.

meganfriesen37
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I’m assuming that all the cash is going into a single bank account

If you’re doing a true “Prepayment” transaction and cannot recognize the revenue immediately, then, on the Payments and Applications screen select the Prepayments type.  When you record the $200 prepayment the JE will record $200 Debited to your bank account and $200 Credit against the customer’s AR Account.  At this point no revenue has been recorded, just the transactions against the asset account.

Then, at the time of the actual rental (when the Revenue can be recognized) on the Invoice to the customer, you’d have 1 line for $100 Rental Fee against your Rental Revenue GL account.

Then you’d apply the prepayment against the Invoice.  There would be a $100 balance on the prepayment for the deposit amount.

Then, from the prepayment screen, under “...” (more items) select the “Refund” option to create the customer refund entry automatically for the balance of their deposit.

If you can recognize the revenue portion immediately, the other option would be to create an invoice with 2 lines.

  1. $100 to Rental revenue account
  2. $100 to “Customer Deposits” Liability account (not revenue)

Then process a $200 payment as normal and the customer has $0 balance on their AR account.  Then when the item is returned in good working order, create a Credit Memo for $100 against the “Customer Deposits” GL account and then process the Customer Refund payment against that.

 

~Megan

Megan Friesen, Contego Software Solutions, Canada
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Thank you @meganfriesen37 , for your prompt suggestion. How about if we can automate this process to automatically let the system capture 200% prepayment without manually linking it to a sales order?

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@meganfriesen37 & @Laura02 
In addition to the automatic creation of the prepayments, we would also require to export the customer refund transactions in XML format and import it to the Online Banking account. How can we achieve this through customisation? 

Also, in case if the returned items are not proper/lost then we are thinking to calculate the
Customer Refund = Total prepayment - Rental Fee - Fee for the lost/damaged items.
How can we record the fees for lost/damaged items since the prepayment is of $200.
Assuming Fee for the lost/damaged items = $20. hence, Customer refund = 200-100-20 = $80.

meganfriesen37
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You can do a “prepayment” that is only linked to the Customer and their AR account and have that sit unapplied.  (That’s the first scenario I outlined above).  Then, when you actually recognize the revenue, you apply the prepayment against the invoice (revenue) at that time.

Take a look at the “how to” article here, this is more about doing physical checks but I think you would also be able to select a batch payment method instead.

In terms of the fee for damaged items, when the rented item is returned, if there was any damage, create a new invoice for the damage (i.e. $20) and apply that to the remaining balance of the prepayment.

Megan Friesen, Contego Software Solutions, Canada

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