What is The Purpose
The Deposit On Account function allows you to manage the funds and accounting when you take refundable security deposit from parents.
The proper accounting for Deposit On Account is as follows:
· When you receive Refundable Deposits from parents, you should record a liability on your company books.
·When you refund the deposit, it should then offset/reduce that liability.
·Any forfeited deposit can be recognized as income, when it occurs.
If you have the 1Core General Ledger (GL) function enabled at your company, you can get a GL data extract with entries to post to the General Ledger.
Billing Items Setup
1Core will automatically setup the 2 billing items to accommodate the processing of Deposit On Account. You will find them in the Billing Setup.
· Other Charges --> Deposit Charge · Credit --> Deposit Refund
You should setup an Other Charges billing item to account for Forfeited Deposit.
Record Receipt of a Deposit on Account
When you receive a deposit on-account from the parents, you should make the following 2-item entry:
· Other Charges --> Deposit Charge · Payment
When you look at the account ledger for this family, you will note that the dual-item entry will net to zero in the account ledger.
However, the Deposit On Account amount will remain in the bucket as shown in the family ledger balance table.
Refund of Deposit
When a family leaves your program and you have to manage the Deposit on Account, there are 3 scenarios:
a. Ledger balance equal to deposit amount
When the ledger balance (after the last billing) is equal to the deposit amount, you simply need to apply the deposit on account amount via a Deposit Refund transaction to bring the ledger balance to zero.
b. Ledger balance less than deposit amount
In this case, you need to record a credit (Deposit Refund) AND issue a check refund to the family
c. Ledger balance greater than deposit amount
In this case, you need to record a credit (Deposit Refund) and expect to collect payment for the remaining balance from the parents.
Deposit On Account Report
1Core provides a Deposit on Account report to help manage the Deposit on Account.
Select date and click Submit to generate the report.
The report details the Deposit On Account booked and refund made for each family.