How to Record Owner Held Security Deposit

How to set up the accounting in DoorLoop to track lease deposits held by your property owners.

Samuel avatar
Written by Samuel
Updated over a week ago

Overview

If your property owners hold onto the tenant security (or other) deposits, you can still record these in DoorLoop so that property balance sheets are correct. To do this, you add a bank account to DoorLoop representing the bank accounts of your owners. Next, you add this bank account to the properties which will have owner-held security deposits. Finally, you will record payments for these deposits as going into the bank account for your owners.

Create the Bank Account

First, you will need to add a bank account representing your owners' accounts.

  1. On the main menu, click Accounting and then click Banking. On the banking page, click on the + New Account button in the upper right corner.

  2. Leave the type as Asset > Bank.

  3. Type in an Account Name for your account to remind you this bank account represents your owner-held deposits. For example, you could call it Owner-held Deposits. Adding a description is optional.

  4. Click Save and the bank account will now appear on your list of bank accounts.


Add the bank account to the owner's property

To be able to use this newly-created account for lease payments, you will need to add this bank account to the properties with owner-held deposits.

  1. On the main menu, click Rentals and then click Properties. Find the property you want to add the owner's bank account to and click on it.

  2. Click on the Settings tab and then the Bank Accounts button.

  3. Select the option to Specify a bank account for this property.

  4. Change the second field (the one for the escrow account), choosing the bank account you create for your owner's from the drop-down list.

  5. Click Save when you are finished.

Now this bank account will be available to choose from when creating lease payments for this property.


Create the lease payment for the deposit

Finally, you will need to record that the tenant paid for the security deposit and that the payment was deposited into the owner's bank account. Make sure you've already created the charge for the security deposit on the lease!

  1. From the main menu, click Leases and then click Active Leases.

  2. Find the lease you want to record the owner-held deposit payment for, and click on it. You can either sort the list by the various columns and filters or use the Search leases search bar.

  3. Click on the Transactions tab and then the Receive Payment button.

  4. Enter the relevant information for:

    • Received from: this will automatically fill in the tenant you added to the lease.

    • Deposit account: pick the owner's bank account, which you added as a default bank account for this property in the previous step.

    • Amount received: enter the amount of the payment.

    • Payment method: pick among several options for informational purposes. Choosing Check allows you to record an optional Check Number.

    • Date: change the date for the payment if needed.

    • Add note: add an optional note for your reference when reviewing the charge later.

    • The Automatically Pay toggle allows you to choose between the following options:

      • On will apply the payment to the oldest open charge first.

      • Off will allow you to choose the charge or charges to pay.

    • The Automatically Deposit toggle will automatically create a bank deposit when you complete the payment. This causes the payment money to immediately reflect in your bank account balance, rather than showing in Undeposited Funds until you create the bank deposit for this payment.

      • Use this if you’ve already deposited the money or if you don’t want to create a bank deposit later and don’t care that the bank deposit date will be the same as the lease payment date.

    • The Send Payment Receipt toggle will send an email to the tenant notifying them that you recorded their payment. This only works if you have an email address entered in the tenant’s info.

    5. Add any relevant files (optional) and click Save.

Good work, this deposit is now recorded as being held in the owner's bank account! You can review the deposit payment on the Transactions tab of your leases.


Make a bank transfer from the operating account to the owner held deposit account

If the payment was made as an ePay from the Tenant Portal for the Security Deposit, it will go directly into the Operating Account because Escrow accounts can not receive electronic fund payments from the portal. That means that when it goes into your Operating Account, you'll need to transfer that amount to the Owner Held Deposit account and we'll show you how.

  1. From anywhere in DoorLoop, click the + Create New button at the top left-hand corner.

  2. In the Other Transaction section, click Bank Transfer.

  3. In the Property field, click the property that this bank transfer will be associated with.

  4. In the Transfer Date field, enter the date that the transfer will occur.

  5. You’ll now see new fields called Source Account and Receiving Account. Select the bank account you want to transfer money from as well as the bank account you want to transfer money to.

  6. In the Amount to Transfer field, enter the amount you want to transfer.

  7. (Optional) Enter a note and upload a file related to this transfer.

  8. Click Save to complete recording the transfer.

  9. Now you'll need to transfer that amount in the real world and physically move the money from your bank account into your owner's bank account. This can be done on your end by wire transfer, check, or whatever other means you use.

You can view the outcome of this transfer by going to the Transaction Details report and filtering the type by Transfer. You’ll see that funds came out of one account and into another. This can also be viewed under Accounting > Banking and click the two bank transfer accounts. One will show a negative transfer while the other a positive one.

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