Overview
If you charge your tenants a non-refundable deposit, these should not be categorized as liabilities like regular security deposits. This is because you aren't going to be returning these to the tenant at the end of the lease like you would security deposits. Since this is revenue, you'll use a revenue category since this counts as income.
The Steps
To record a non-refundable deposit on a lease, click Leasing > Active Leases on the main menu.
Click and find the lease you want to record the non-refundable lease deposit on.
On the lease, click the Transactions tab. From here, click Post Charge.
On the Post Charge window, fill out the following:
Category: choose a revenue account for the charge. This can be something like a non-refundable pet deposit category, etc.
Description: enter an optional explanation for the deposit charge. (What you enter here is what the tenant will see on their lease ledger in the tenant portal. If you leave it blank, the tenant will just see the word “Charge.”)
Amount: enter the amount for the deposit charge.
Due Date: change the due date for the deposit charge if needed.
Add memo: add an optional note for your reference when reviewing the charge later.
Click Save to finish.
Once your tenant pays or once you enter the payment, this will show up in your reports as revenue collected since it will not be returned to the tenant. Hence, this will also not show up as a liability or a deposit. Also, if this is money that the property management company is keeping and not passing on to the owner, you will need to add this to the payout categories of your management fees settings. For instructions on how to do this, read Set Up Your Management Payout Categories.