How to handle Deposits held in a Custodial Scheme (Quickbooks Users)

Creating the deposit control accounts in Arthur & QuickBooks

If you are going to operate using a Custodial Scheme to deal with your tenants deposits, you must first set up the deposit control account in Arthur

Select “Financials” from the subheadings followed by Bank Accounts. From here select “Add Bank Account” and set up as follows. Adjust the custodial section of the name to any alternative named scheme that you may use.

Map Arthur Bank Account to QuickBooks

  1. Select Financials > Go to QuickBooks Screen > Mapping Bank Accounts
  2. Map the QuickBooks Online Bank Account “Arthur Custodial Scheme” to the Arthur Payments/Bank Accounts “DPS custodial”
  3. Save the mapping

Synchronise Arthur and QuickBooks. You will now be able to find and use this account in QuickBooks.

Once you have set this up – follow these next guidelines

How to Account for Registered Deposits

Step 1: Create the Registered Deposit Charge in Arthur

Go into the Tenancy > Add Transaction type “Registered deposit charge”. This will create the charge on the tenant deposit statement.

Select Save Transaction then conduct a synchronisation between Arthur and QuickBooks

Step 2: Reconcile the Registered Deposit Charge

Go into Quickbooks > Banking and match the the bank line with the relevant deposit invoice posted by Arthur.

Step 4: Transferring to the Custodial Scheme

Once you conduct a bank transfer to the custodial scheme (in real life), you will be met by a spent item in QuickBooks.

From here, you would select the Transaction and fill in the fields as follows;

  • Transaction Type: “Expense”
  • Select Payee: “Custodial Scheme” contact (You may need to create a new supplier contact)
  • Account: “Arthur – Custodial Scheme” (Insert/choose your respective custodial scheme) – This is the account created in the first section – How to Set Up your Deposit Custodial Account
  • Select VAT
  • Select Class: You will need to select the relative unit

Complete this by using the “Add” feature in QuickBooks. This will credit the Custodial Scheme Account.

To locate the list of accounts. Go to Account > Chart of Accounts.

Step 5: Refunding the tenant

How to Refund Tenants Deposits Directly Held with Custodial Scheme

This is for a scenario where the Custodial Scheme (DPS, TDS, My Deposits) refunds the tenant directly.

Step 1 – Transferring the Deposit

Initially, the deposit needs to transfer back into the main tenant account in preparation for its return. This is created in Arthur using the Add Transaction within the tenancy, and use transaction type “Deposit Transfer to Rent Account”

Step 2 – Dealing with deductions

*Ignore this step if there are no deductions to the tenant.*

Ignore this step if there are no deductions to the tenant. If there are deductions, you must undergo two steps, one in Arthur and one in QuickBooks

In Arthur

This is done within the tenancy in Arthur. Select Add Transaction and enter “Sundry Charge”. This will decrease the amount owing to the tenant and count as a deduction.

In QuickBooks (this will be after you sync)

Go onto your Banking page. If there are any deductions, the Custodial Scheme will send you the funds directly. You must deal with these in order to level off the nominal account within Arthur. Find the received item from the Custodial Scheme and follow these steps

In…

Payee – Select the custodial scheme

Category – The Account set up for your custodial scheme

Memo – Description

Class – Tracking codes for unit and properties

Step 3 – Remitting to the tenant

This is done in the ‘Close tenancy’ function within the tenancy screen in Arthur. On the left click on the three dots and select Close Tenancy. At the point of closing the tenancy you will be prompted to enter a bank account from where the refund is coming from.

It will create a remittance totaling the sum of Deposit less deductions.  No entry will go through the bank account in QuickBooks as the credit will be created in QuickBooks as a credit to the custodial account.

If the you are refunding the tenant directly, select your client bank account as the ‘Remittance bank account'( in the image above). You can then reconcile the tenant remittance transaction against the payments (refund) made to the tenant on QuickBooks.

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