This article describes how to explain a refundable rental deposit paid out of your bank account to a tenant if you have an unincorporated landlord account in FreeAgent.
If you return a refundable deposit to one of your tenants, you should follow the steps below to explain the money received from the Tenancy Deposit Scheme (if applicable) and the money paid out to the tenant.
Please note that the unincorporated landlord account type is currently only available if you work with an accountant who is a FreeAgent Partner. You’ll need level 7 access or above to your FreeAgent account to follow the steps below.
If you have a sole trader, partnership or limited company account and you return a refundable rental deposit to a tenant, find out how to explain the money paid back to the tenant.
If you've received a refundable deposit from one of your tenants, find out how to explain a rental deposit received from a tenant.
Explaining the money paid into your bank account
If you’ve received a deposit back from a Tenancy Deposit Scheme and the relevant bank transaction has been imported into your FreeAgent account via a bank feed or uploaded from a bank statement, you will need to explain it using the appropriate ‘Type’ and ‘Category’ as detailed below.
Begin by navigating to the ‘Banking’ tab at the top of the screen and selecting ‘Bank Accounts’ from the drop-down menu.
Choose the relevant bank account from the list.
Select the transaction that relates to the rental deposit.
Select ‘Rental Deposits In’ from the ‘Type’ drop-down menu.
Select ‘Receipt under Rental Deposit Scheme’ from the ‘Category’ drop-down menu.
Select ‘Explain Transaction’ to complete the process.
A record of the bank transaction being explained will appear in your Audit Trail report.
Explaining the money paid out of your bank account
Once the money is paid out of your business bank account to the tenant and the transaction has been imported into FreeAgent, navigate to the relevant bank transaction and select ‘Rental Deposits Out’ from the ‘Type’ drop-down menu.
Select ‘Refund of Rental Deposit Received’ from the ‘Category’ drop-down menu.
Select ‘Explain Transaction’ to complete the process.
A record of the bank transaction being explained will appear in your Audit Trail report.
