Ris Assist 

Notes on Security Deposits

 

 

The Security Deposit Field on the Tenant Lease Information Screen

 

RIS recommends using the Security Deposit field in the Tenant Lease information only to contain the amount paid by the Tenant.

 

When you bill additional security on a renewal lease, do not change the security deposit field. Wait until the security is paid before you change the information in this field.

 

When you enter a tenant deposit, the RIS program alerts you if there is an unpaid security deposit billed amount, and gives you the opportunity to update the security tenant security deposit field at the time of the deposit. (This feature must be turned on in Utilites - Utilities - More Utilities: Check the Box Security Field Update on Deposit.)

 

Reports of Security Deposits

 

On the Reports Menu, there is a udf (user defined fields) report for security deposits. This report lists the security deposit amounts

 

If you want a list of unpaid security deposits, you can use the Report "Tenant Applied Summary Year to Date" and filter on bill code 52 (or whichever bill code you use for security deposits).  This will list all billings of security and all corresponding payments, if any. All unpaid billed amounts will show.

 

 

 

Security Deposits in the General Ledger

 

1. Payments: Billed amounts do not go to the general ledger as this is a cash basis system.  Payments made to Billcode 52 (or whichever bill code you are using for security deposits) are posted to General Ledger Account Code 227000 (or whichever account code you are using for the security deposit liability).  Then as each payment is made and applied to security (either manually or automatically), the general ledger liability will be increased accordingly. Asssigning a billing code to a general ledger account is done in the Company Menu->Charge Codes Tab.  When RIS delivers the RIS program, Billcode 52 is already assigned to account 227000.

2. Refunds/Checks: When you issue a check to a tenant to refund their security deposit, use general ledger account 227000. This will reduce the liability for security deposits on the books.

3. Security Deposit Savings (asset) Account.  You should have in the General Ledger an asset account showing the total security deposits in that account. RIS delivers the original program with account 117500 as the security deposit account. You should not make this a “checking account” in RIS but rather just leave this as a general ledger savings account.

4. Transfers between Checking Account and Savings Account.

   1. Each time a tenant makes a payment of a security deposit, you need to write a check and physically transfer the funds to the savings account. When you write this check, use general ledger account 117500. This will debit (increase) the amount in the general ledger savings account.

   2. Each time you make a refund to the tenant for a security deposit, you need to make a physical withdrawal from the security deposit savings account and deposit the money back into your checking account. When you make the deposit to your checking account, use general ledger code 117500. This will credit (decrease) the amount in the general ledger savings account.

 

Tenant Moves Out

 

When a tenant moves out, you might refund the security deposit, retain the security deposit in full, or some combination. Whichever case, you need to make a physical withdrawal of the funds from the savings account.  Now, you have a check in your hands.

1. If you are retaining the security deposit,

   1. Make a tenant deposit and apply to outstanding balances on the tenant’s account.

   2. Make a journal entry, credit account 117500 and debit account 227000. This will reduce the liability account and reduce the asset account.** See Note Below.

   3. Zero out the security deposit field in the Lease Info Screen.

   4. Make a note of what you did (e.g. applied security to rent due) in Tenant Notes.

2. If you are refunding the security deposit,

   1. Make a non-tenant deposit and apply to general ledger account 187000(exchange) or to account 227100 (which can be used for security deposits to be refunded).

   2. Write a check to the Tenant and apply to general ledger account 18700 or 227100 (to reverse the deposit you made).

   3. Make a journal entry, credit account 117500 and debit account 227000. This will reduce the liability account and reduce the asset account.** See Note Below

   4. Zero out the security deposit field in the Lease Info Screen.

   5. Make a note of what you did (e.g. refunded security to tenant) in Tenant Notes.

3. Partial Refund

   1. Make a deposit of the funds, but split into two parts. Part 1 of the deposit will be a tenant deposit to be applied to the tenant’s account, and Part 2 will be a non-tenant deposit and apply to general ledger account 187000(exchange) or to account 227100 (which can be used for security deposits to be refunded).

   2. Write a check to the Tenant for the portion you are refunding and apply to general ledger account 18700 or 227100 (to reverse the deposit you made).

   3. Make a journal entry, credit account 117500 and debit account 227000 for the entire amount of the security deposit. This will reduce the liability account and reduce the asset account.   ** See Note below

   4. Zero out the security deposit field in the Lease Info Screen.

   5. Make a note of what you did (e.g. refunded part and retained part) in Tenant Notes.

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   ** Note: You do not need to make a journal entry unless it is your procedure to deposit the original security deposit into your operating account thus creating a liability to account 22700. If your procedure is to deposit security deposit payments directly into a savings account, do not make the journal entries.