Handling security deposits

TapetownTapetown Member Posts: 1

Hi! I've been struggling with handling security deposits through Wave. I browsed topics about this and realise that it isn't actually built in Wave to do that. But perhaps someone has an idea for a workaround that suits my needs.
We rent out rehearsal spaces for bands and hence require a security deposit from them. Since we also have two months notice period for cancelling, we often say that those last two months are covered by deposit so they don't have to pay the rent in that time and we don't need to pay back the deposit. If I create a separate category called "security deposit" to count the deposit as a liability, how could I then make it all turn out correct in the end when we consider a part of the deposit or the total sum of it as rent?
Thank you in advance for any advice.

Comments

  • ErikErik Administrator Posts: 187 admin

    Hi @Tapetown, the workaround will depend on if you want the deposit to show up on the invoice.

    1. If you want the deposit to show up on an invoice, you can simply add it as a regular invoice item (along with the actual invoice price) and record a partial payment for the deposit amount. If you have to return the deposit to your customer, then you would be able record this refund by categorizing an expense transaction on your Transactions page as a "Refund for an Invoice in Wave". If you don't have to return the deposit, then you don't have to do anything on the invoice except record the rest of the payment.
    2. If you want to record the deposit as a liability, you might be better off following our guide for recording loans and repayments. If you have to return the deposit, follow all of the instructions on this article. If you get to keep the deposit, you can simply record an income transaction for the liability account instead of following the "Accounting for loan repayment" section of the article
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