does your property management company collect security deposits from both tenants
and landlords well then you should watch this video collecting security deposits
if you have any questions about this topic you can leave them in the comments section below and
i'll do my best to help you and of course if you feel the video helped you i hope you will
click like and don't forget to subscribe to get updates on new videos that come out all the time
let's imagine that we have a new policy security deposits will be collected from all as of march 1.
landlords must give 2 000 each and tenants give one thousand each for their deposits respectfully
now let's imagine on march one we receive two thousand dollars from alan the landlord for
his operating deposit and that will be deposited into our operating account and not a special bank
account so what will be the result in the trial balance if we record two thousand dollars more in
our operating account because of the landlord operating deposit that we received from allen
well our bank account well landlord operating deposit will show up for the first time
as a two thousand dollar credit balance liability owed back to alan until it is applied or given
back and because our bank account has two thousand dollars more it will increase to four thousand
eight hundred dollars let's take a look at how to record it now this is the way the trial balance
looks before we record the tenants security of the landlord security deposit alan the landlord
we click payment because we receive the payment from allen and we choose only alan not one of
his tenants only alan now we ignore all these other uh things down here we just put the 2000
push tab but the most important one is this notice there's a new field in this window called the
ar account field and once you have more than one accounts receivable type of account in your file
this pull down menu choice will appear in the customer payment window so you can choose which
account you are receiving the payment from or into and in this case it will be landlord operating
deposit the specific accounts receivable type of account that we're getting collecting money for
is this landlord operating deposit that's it and now when we click save and close here you can't
see the bottom of the window but there's a little save and close right there boom just click ok in
the middle and now you can see the results and the trial balance are exactly as what we expected the
operating deposit for landlords showed up for the first time as two thousand and our bank account
shows a balance of four thousand eight hundred where two thousand should be reserved to give
back any landlord client deposit if they quit and leave us now what about the next
transaction received another 2000 from another landlord client dave for his operating deposit
and let's take a look at what the results will be well if we receive 2 000 more well the landlord
operating deposit will increase by 2000 because we owe 2 000 more to another landlord client dave
and if the money went into the chase bank account that will increase by 2000 and become 6800
that means that of the 6800 in the operating account 4 000 should be reserved to be able to
pay back a landlord's deposit if they leave us so let's record this the exact same way
and see the trial balance looks the way it looks before we record our first security deposit we
click payment because we received the payment and we choose alan arby not one of his tenants
and we put the date that we physically received it in our example it's march 1 of 2022
the money's going into this bank account our operating bank account cash in chase bank
but the most important thing to notice is here there's a new pull down menu choice right here
and the reason this suddenly appeared is because we now have more than one accounts receivable type
of account in our quickbooks file so as soon as we have an additional accounts receivable type
we can choose in this window which account receivable account to record the payment and in
this case it's landlord operating deposit landlord operating deposit is the reason we are collecting
and the money is going into chase bank and it's from alan on march 1 2 000
when we click save and close at the bottom of the window just click ok and you can see the results
are exactly as what we expected cash and chase bank increased by 2000 and became 4800 and
landlord operating deposit shows two thousand dollars that we owe as a credit balance if they
quit and leave us tomorrow but more importantly look at this report landlord security deposit
shows specifically alan who gave us this payment on march 1 and that's the reason the 2000 here
equals the 2000 there but let's watch what happens when we record receiving another security deposit
let's imagine that we also on march one received two thousand dollars from dave
for his operating deposit so what will be the result in the trial balance
well the landlord operating deposit we just got two thousand more so that should increase
by two thousand and become four thousand and if the money goes into the chase operating account
that will increase by two thousand and become six thousand eight hundred and of the six
thousand eight hundred in the operating account four thousand should be reserved for paying back
landlords who quit and want to get their deposit back but it's very easy we'll record it the same
way we click payment quickbooks remembers the date and all we have to do is choose the landlord
not one of his tenants just the landlord the money is going into cash in chase bank
but you must choose every time you're in the receive payment window you must be careful to
choose the proper receivables account in this case landlord operating deposit and we put
2000 push tab now all we have to do is click save and close at the bottom of the window
see if we can squash this down a little nope maybe okay boom click okay and now
the results are exactly as what we predicted landlord operating deposit is four thousand
and cash and chase bank is six thousand eight hundred and if you ask why is the landlord
operating deposit four thousand the answer to that question is in the landlord's security
deposit report you can see that the reason we owe four thousand is because we received a security
deposit of two thousand from alan we received a security deposit of two thousand from dave
and that's why the total landlord security deposit is equal to four thousand dollars
now let's record receiving the tenants deposit let's imagine on march one we received a thousand
dollars from betty boop for her security deposit so what will happen in the trial balance if we
receive a thousand dollars for a tenants security deposit well we designated a specific bank account
called tenants cash deposit and this is the first deposit into this special bank account for a
thousand dollars and of course if betty suddenly moves we owe her the money back so we have this
liability account tenant security deposit which also shows up for a thousand dollars
now of course this might not be the order of the accounts these accounts will show up a
little higher up on the list but these will be the names and numbers that show up after
we record the tenant security deposit from betty same thing payment and then we click betty boop
march 1 don't forget the most important part of this window is choosing the proper
accounts receivable account betty is a tenant we are receiving the tenants security deposit
and be very very careful the money is going into this bank account tenant cash deposit
so it's going into tenant cash deposit and tenant security march one a thousand dollars
now when we click save and close click ok the results in the trial balance are exactly as
what we expected tenants cash deposits showed up for a thousand dollars and tenants security
deposit showed up for a thousand dollars this is the trust account this is the liability account
that represents what we owe so also on march 1 we received a thousand dollars from candy
for her security deposit so what now will be the result in the trial balance well the tenant
security deposit will increase well the tenant cash deposit will increase to two thousand from
one thousand up here because this bank account will physically have a thousand dollars more
and the liability what we owe back to tenants if they move out that will also increase by a
thousand and this will be the result in the trial balance after recording candy security deposit so
we click payment we choose the proper tenant candy charles quickbooks remembers the date
most important the money is being physically deposited into the tenant cash deposit bank
account and the proper accounts receivable account that represents the current liability
that we owe back to tenants if they move is tenant security deposit and then we record
1000 and of course all you have to do is do save and close click ok and the results are exactly
as what we expected we now have physically two thousand dollars in this trust account
that represents the money we have in the special bank account to give back security deposits but we
also have this two thousand dollar liability now if you ask why is tenant security deposits a total
of two thousand the answer to that question is in this report tenants security deposit we click
and you can see the reason why this number is two thousand is because we owe a thousand to betty if
she moves out tomorrow we owe another thousand to candy if she moves out tomorrow and that's
why the total 2000 is equal to the 2000 in the trial balance for the security deposit to tenants
and now it's your turn see if you can record all the security deposits from both of dave
deeney's tenants eddie edwards and freddie froda we received a thousand dollars from each of them
on march 1 for their tenant security deposit try to do it by repeating what you saw
just now in this video when you finish your trial balance should look like this
if it does not then you need to go back and find and fix mistakes the way we learned
in prior videos also when you finish your tenant security deposit report should look like this and
again if it doesn't you have to go back and find and fix mistakes the way that we learned you can
rewind the video and pause the video to compare it to your own reports to see if you were successful
one last note landlord payout balances report must not have any security deposit transaction at all
if it does then you must redo the last part of the prior video we fixed this report so that it
would not show up only rent payable to landlords would be transactions that would be listed in this
report no security deposit transactions you see this account clearly says tenant security deposit
this one if you stretch it out a bit says landlord operating deposit and this report
should only be managing the normal rent if not then do what you learn to find and fix
you