If you need to return a deposit or any other liability payment to your tenant, open the Transactions/Expenses page from the Financials left-side menu.
Click on the Money Out button and select the Return deposit option from the drop-down list:
Select the tenant from the drop-down. You will see the list of available liabilities. Check the boxes of those you are about to return, enter the date, and the amount if you are returning only a part of it.
"Mark as paid" option will only record the deposit as returned, while "Pay now" will initiate a deposit return transaction.
Note! You can return online only those payments that were made online. The refund can be processed to the original payment method used for the deposit transaction. If a bank account has been removed or closed, the deposit return payment will fail. In this case, you will want to return the deposit outside the system and manually record it as returned in the system.
Deposits can only be returned online within 720 days of the original payment date. Payments older than 720 days must be returned outside the system.
Alternatively, you can access the same page from the Renters page - simply open the tenant's list, view the profile for the needed one and choose "Return" from the Actions menu next to the Deposit section:
Deducting charges from a tenant’s security deposit
Before returning a deposit, you may need to first deduct charges for move-out expenses by creating an income invoice and applying the tenant's security deposit to cover those charges. This ensures accurate accounting and reflects the deductions properly.
To apply a tenant’s security deposit toward move-out charges, follow these steps:
Create an income invoice for the charges: How do I create an invoice?
Apply the deposit to it by following these instructions: How to apply deposits/credits towards invoices?
Create the matching expense or open the existing one: How do I add an expense invoice?
Mark the expense as paid and add a note indicating the payment source (e.g., "Paid from tenant’s security deposit"): How do I mark a transaction as paid?
Repeat these steps for each charge you need to deduct. This process reduces the deposit held balance, shows the tenant charge as paid by the deposit, and keeps your property accounting balanced.