To ensure that your lease records match what was received for security and other refundable deposits, use the refundable deposit report for the property to ensure that it matches the balance in the security deposit trust account. This information is taken from the lease record and should be used as a sub-ledger when doing a trust reconciliation. The report will break out the amounts that are
Outstanding
Collected
Retained for damages
Returned to the tenant
Interest expense accrued (interest is accrued on the lease's anniversary)
Collecting Deposits
When a security deposit (or other refundable deposit type) receivable is deposited in accounting the deposit will be automatically categorized as Collected as of the deposit date. If you need to manually change the deposit to collected you can do so by
Navigating to the lease and click on Manage Deposits
Select Collected
Click on Next: History
Update the date that the deposit was collected
Click on Update Refundable Deposits
Recording Interest Earned
Each month the interest earned by holing security deposits should be recorded. The Deposit Interest Adjustment batch, under Accounting Tasks, will allocate a portion of the interest earned to any properties that have had accrued deposit interest for the fiscal year. The balance of the interest is added to the admin property. This will ensure that the interest earned and the interest expense will match for each property.
Navigating to Accounting - Tasks click on Deposit Interest Adjustment
Select the bank group where interest has been earned
Enter the date the interest was earned
Enter the total interest amount earned and click Create
Review the amounts allocated to each property and click Post
Issuing Deposits
Deposits can be returned to the tenant, retained for damages or retained for rent collection from Issue Deposit.
If you need to manually change the deposit to returned you can do so by
Navigating to the lease and click on Manage Deposits
Select Returned
Click on Next: History
Update the date that the deposit was returned
Click on Update Refundable Deposits
Reconciliation
You should also do an account reconciliation for the security deposit trust account to the appropriate bank statements. Following these recommendations will provide you with 3 sources that should all correspond and match - refundable deposit report, security deposit trust account, and the bank statement.