Accounting for deposit

The deposit is an amount of money temporarily held as collateral for possible damages. It is not a product purchased by the guest and not a service provided to the guest. For this reason, deposit is not an item on the order and not an Invoice item on the invoice.

However, deposit is something that must be paid.

Below we explain for a number of situations what is journalized with respect to security deposit.

Payment of deposit

Combined payment of €500 (including €100):

Credit	Debit	Credit
Payment	500
Prepayment		367
Payable VAT		33
Security deposits		100
	500	500

Separate deposit payment of €100:

	Debit	Credit
Payment	100
Security deposits		100
	100	100

Release of deposit

Release of deposit:

	Debit	Credit
Security deposits	100
Debtors		100
	100	100

Refund of deposit:

	Debit	Credit
Debtors	100
Refund		100
	100	100

Claiming deposit due to damage

Deposit is fully claimed:

	Debit	Credit
Security deposits	100
Damage		100
	100	100

Deposit has been partially claimed and remaining portion released:

	Debit	Credit
Security deposits	100
Damage		30
Reservations		70
	100	100

Deposit is overclaimed and an outstanding amount arises:

	Debit	Credit
Security deposits	100
Reservations	200
Damage		300
	300	300

When you create an Security deposit policy, a Ledger account is automatically created. The security deposit is journalized under general ledger account 2060. When damage has occurred, it is journalized under general ledger account 4300.

If you are working with a linked accounting program, don't forget to still create the Ledger account here.

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