Handling Deposits in your Accounting Software

RoomRaccoon software integrates seamlessly with your accounting system, transmitting transactions at the moment of invoicing—specifically when a tax invoice is generated. This process typically aligns with the guest's checkout, capturing both revenue and banking details within the transaction, which is structured as follows:

Debit: Bank

Credit: Revenue

Credit: VAT

In cases where payments or deposits are made prior to the invoice date, managing these prepayments becomes essential for accurate accounting.

Managing Prepayments and Deposits

Prepayments, such as deposits, appear on bank statements before an invoice is generated, leading to a temporary absence of these transactions in the accounting package since RoomRaccoon only sends transactions upon invoicing. To maintain accuracy, accountants or bookkeepers are advised to reconcile bank statements with the accounting software regularly, addressing the prepayments by:

Option #1: Recording the Transaction 

This is the preferred method and involves:

• Creating a "Guest Deposit" account in the General Ledger (GL) for the debit entry.
• Establishing a liability "Suspense Account" in the GL for the credit entry, ensuring the bank account and client deposit account collectively match the bank statement.
• Noting the deposit within the Property Management System (PMS) to inform both the software and reception staff.

Option #2: Leaving it in Bank Reconciliation 

Alternatively, the prepayment can remain unprocessed in the accounting package.

How to account for deposits:

We recommend the following methods:

• Option 1: Using Journals (preferred)
  Process transactions through journals, debiting the deposit account and crediting the creditor control, then reversing the entry post-checkout.
• Option 2: Raising an Invoice Externally
  Similar to journal use, but involves raising an invoice directly in the accounting system (outside RoomRaccoon), with the same debit and credit actions followed by a reversal upon guest checkout.

Upon raising the tax invoice, the accounting system receives the complete invoice amount, allowing for a straightforward update to revenue and bank accounts with full values. This approach ensures that deposits are seamlessly integrated and adjusted within the financial records.

Practical Example: Deposit Handling Process

Consider a scenario where a guest pre-pays €5,000 upon booking:

1. Initial Deposit Handling:
   [Debit Entry] Place $5,000 into the “Guest Deposit” account.
   [Credit Entry] Credit the “Suspense account” with €5,000.
   The deposit, now recorded, ensures the deposit and bank accounts align with the bank statement.
2. Post-Checkout
   Upon guest checkout, the final invoice amounts to €8,000, including VAT.

• The guest settles the remaining €3,000, with the PMS forwarding the complete transaction details to the accounting system.
• This reflects a €8,000 debit in the bank, alongside corresponding revenue and VAT credits, allowing for a reconciliation of the initial deposit.
• The initial deposit entry is reversed, crediting the guest deposit account and debiting the suspense account.

For more information on how to locate deposits in your RoomRaccoon account, click here.