I have a client who runs a letting agency, its a new business and I am running the books on Quickbooks. MY question is where in the COA should I put the DPS?
The DPS is a Deposit Protection Service, which the agency have to pay the tenant's deposits to, it is a government based scheme. Years ago the agency was responsible for holding the deposits in a separate bank account, but this is no longer the case and they have to be registered with a government based scheme.
Do I set it up as a 'Bank account' or a 'Current Asset account'? Can't make my mind up which to do? At the end of the tenancy if everything is as it should be the tenant gets their full deposit back, if they had stained a carpet or broken something, then the money to replace the item broken comes out of the deposit etc, so in which case they would only get some of the deposit back and the remainder would be transferred into the agency's bank account to forward onto the landlord, so they can replace the broken items etc. Hope all that makes sense?
So any help would be greatly appreciated as this is my first letting agency.
Many thanks,
PS they have separate software to actually run their part of the business.
I have set up as a psudo bank account in the same way as CIS with subcontractors. When the tenant moves out you can then deal with monies returned to them or pay invoices for make good repairs from this account, or do a transfer into the current account.
Is it worth asking the Government agency that runs the scheme, if they have any advice (ok prob a stupid suggestion really!!)?
In some cases, money like this should be shown in the accounts.. hell knows where it should be shown, but I had a big issue a few years ago with a Financial Advisor who had a bank account with these deposits, but it couldnt appear in the accounts! I couldn't get my head round it!
