Deposit

[happytoddlers]

Hi All!

Can anyone advise me please on how to account for deposits? If I take a deposit then do I declare this as an income immediately then treat it as an expense when I return it? Or do I not account for it unless it is legally mine through breach of contract or as a payment for the last month's childminding?

One confused childminder!

Hayley

[Bridey]

I use my deposit as payment for the first invoice. The other option is that you keep it during the contracted period and use it as payment for the last invoice. Therefore it gets entered as income and stays there.

You don't return it unless you are unable to offer the parents the place - deposits are non returnable! If that is the case I would put it down as a misc expense labelled "returned deposit to Mr & Mrs ***" and get the parents to sign a receipt.

[MrAnchovy]

The second one Hayley - it is only income when you are entitled to keep it.