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Hi I have a client that rents out properties. I am using SAGE.
A quick question over the client deposits. Jst having a blank moment.
A client pays 1 months rent as a deposit. This money is paid into the landlords bank account and then immediately deposited with the Deposit Protection Scheme (externally to company) for protection of both the landlord and tenenat, so it quite quickly leaves the bank account.
How do I manage this in the books. The "Rental Deposit" isn't income per sa (until it has to be claimed for damages"), but it should be a balance sheet item.
I thought of setting up a Current Liability (as the landlord will have to pay it back) (as Balance Sheet item) n/c between 2100 - 2199 probably 2103 DEPOIST HELD and a bank account DPS.
So When a despoit comes in to the current account it is a receipt into 2103 and when it is deposit to DPS I do a bank transfer to the bank account DPS. In theory n/c 2103 and DPS Account is the same.
I would reverse this when the deposit is paid in full. If there are any damages to be paid then it would have to hit the P&L accounts.
Any comments greatfully received.
Clare
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