Set Up Special Charge & Credit Descriptions

First you'll go to Charge / Credit Descriptions and review the tabs called "Special Charge" and "Special Credit".

1. Under Special Charges set up a maximum of five different descriptions by typing over the existing names like "Deposit Tuition: General", for example you might rename it to "Pre-Registration Deposit".
2. Each Special Charge must have a corresponding Special Credit. Go to Special Credits and create the appropriate description.  For example you might type over "Deposit Refund: General" with "Pre-Registration Refund".

Note: If you get confused as to which deposit goes with which refund you may use the Reset Defaults button to return to their original names, however, this will change the names of those items on any Ledger Cards where they have been used.

Charge a Deposit and Refund it Later

Charging the Family a Deposit

1. On the Account Ledger Card post a charge using one of the deposit descriptions you set up under the "Special Charge" category. The Deposit Button ( bottom of Ledger) will add this to the Deposit on Account total.

Note: This amount is held as a liability until it is later refunded.

2. Enter the payment you received to pay the deposit. Normally this would be entered as a "Pmt by Check" on the very next line.

Refunding a Deposit

1. On the Account Ledger Card post a credit using the corresponding deposit refund description you set up under the "Special Credit" category.

Note: The Deposits Button (bottom of Ledger) will be updated with the revised amount still on deposit.

2. At this point there are several options:
   1. The family's balance is now zero, in other words the Deposit Refund paid their balance in full. In this case you're done!
       
   2. The family's balance is zero, but you wish to refund a portion of the tuition they were charged. Enter a credit with a description called something like "Tuition Refund" which will give the family a credit balance. Then enter a Customer Refund charge to bring their balance to zero.
       
   3. The family still has a balance due. When you receive their payment enter it to bring their balance back to zero. If they have left the center and this amount cannot be collected you may choose to write it off as Bad Debt.
       
   4. The family now has a credit balance on their ledger card. If they are using the deposit to pay tuition simply post a tuition charge to bring their balance back to zero or you may refund the money directly to them by entering a Customer Refund. It's fine if part of the deposit is going to pay an outstanding balance and part is being refunded back to the family.

Changing a Refundable Deposit to a Non-Refundable Registration Fee

You may wish to change a Deposit to a Registration Fee if you charge the family a refundable Deposit to hold their space but consider it to be refundable only if the family actually enrolls at the center. If the family doesn't enroll then the original Deposit becomes a non-refundable Registration Fee.

1. Enter the Deposit, Payment, and Deposit Refund as indicated above. At this point the family would have a credit balance on their ledger card.
2. Charge a Registration Fee to bring their balance back to zero.

Entering a Deposit that was Paid in a Prior Year

1. On the family's Ledger Card post a charge using the Deposit description dated 12/31 of the year they originally paid the deposit (or if you don't remember 12/31 of last year).
2. Next enter a Balance Forward (using the same date) and enter the amount as a NEGATIVE number (like -50.00) to show that the deposit was paid in a prior year. DO NOT use a payment description like Pmt by Check or it will show up on your Deposit Report.

Deferred Revenue

Deferring revenue essentially means to accept payment for goods or services that have not yet been provided. For example you may accept payment (or partial payment) in the Spring for childcare that will not be provided until the Fall. If you choose to count this as revenue in the Fall (instead of at the time the payment was originally received) then the revenue is deferred.

Follow the same basic steps to Charge and Refund a Deposit as indicated above.

1. At the time payment is received post a Deposit then a Payment (like Pmt. by Check).

Note: The payment will increase the bank account (an asset) while the deposit sets the funds aside as a "deposit on account" (a liability) so that no revenue is counted at that time.

2. Later, when the childcare service is provided post a Deposit Refund and a Tuition Charge (revenue).

Note: This moves the funds out of the liability and into revenue. The bank account does not change since no money was received at this time.

Printing a Deposit/Refund Report

To keep track of deposits and deposit refunds you'll want to print the "Account Deposit Activity" report. This report is located under Family Accounting Reports in the "Miscellaneous Ledger Activity" section.