Finance User Manual ENG -> 3. Payments -> 3.4 Specific Payments and Journal Entries -> LUFI-30303 Deposits or Guarantees
LUFI-30403 Deposits or Guarantees
LU Introduction
Sometimes suppliers request a guarantee (e.g. to rent houses, for a phone line, etc.) which should normally be returned at the end of the agreement. When cash is given to the supplier, you will record a transaction in the register on an account {Guarantee and Deposits}.
Depending on your section’s policy, you can differentiate if the guarantee is more or less than one year and use a different account depending on the case.
When the cash will be returned at the end of the renting contract you will record it in the register. A manual reconciliation on the {Guarantee and Deposits} account needs to be done to settle the balance. The reconciliation can be done once both entries are hard-posted.
USD 3,000 Short-term deposits for Expat house rental
| Description | Account | De | Cr | Entries matching |
| Deposit paid to supplier | ||||
| Cash on hand | 10100 | 3,000 | ||
| Short-term deposit | 11000 | 3,000 | A1 | |
| Deposit return | ||||
| Cash account | 10100 | 3,000 | ||
| Short-term deposit | 11000 | 3,000 | A1 |
How to Record a Guarantee or a Deposit to a Supplier
Go to: Accounting/ Registers:
- Open the appropriate register to record the money out.
- Click on {New} to create a register line.
- Complete the line. In the {account} field, select the account {Guarantee and Deposits}. Select your supplier in the {partner} field.
- Save this entry.
- After the money is returned, repeat the process with money coming in. Save this entry. Ensure both entries are hard posted.
- These two entries can now be reconciled in the journals.
