How do I take a security deposit and refund it when the unit is vacated?

A deposit is money you hold in trust, not income. That is why it has its own tab inside the contract and a global list showing everything you are holding.

At the start of the contract

1. Enter the deposit amount on the contract form and a separate deposit record is created for it.
2. From the deposit tab inside the contract, record a receipt movement with the amount and date.
3. The deposit balance becomes visible and its status is open.

When the unit is vacated

1. Inspect the unit, then record a deduction against damage or unpaid utility bills, writing the reason.
2. Then record a refund movement for the remainder to the tenant.
3. When the balance reaches zero the status becomes closed.

Tracking every deposit

Open Property Rental → Deposits and securities — Figure 1 — to see each contract with its expected amount, current balance and status in one place.

Notes

• Never mix the deposit with the rent; the first is a liability of yours, the second is income due to the owner.
• A deduction with no written reason and no documented inspection is a deferred argument with the tenant.
• Photograph the unit at handover and at vacating and upload the photos under contract attachments; that is your evidence when you deduct.
• Review the deposits list monthly; a deposit on an ended contract that was never refunded stays a liability in your books.