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How to Record and Apply a Security Deposit in Stessa

Refunding all or part of a tenant's deposit? Follow these steps to record it correctly and keep your tenant ledger and reports accurate.

Flow 1: Partial Refund (Applying Part of the Deposit Toward Expenses or Unpaid Rent)

Use this process when part of the deposit is refunded to the tenant and the remaining balance is applied toward expenses, such as maintenance, or toward unpaid rent.

Step 1: Add a Credit to the Tenant Ledger

  1. Navigate to the Tenant Ledger.

  2. Add a Credit entry.

  3. Label: Security Deposit Refund

  4. Amount: the full security deposit amount

Step 2: Record the Refund Transaction

  1. Go to the Transactions page and create a transaction.

  2. Name: Security Deposit Refund

  3. Type: Money Out

  4. Amount: the amount being refunded to the tenant

  5. Category: Security Deposit

  6. Property & Unit: select the applicable records

  7. Save the transaction.

Step 3: Record the Retained Portion of the Deposit

  1. Add another transaction.

  2. Name: Security Deposit Refund used for [Expense Type]

  3. Type: Money Out

  4. Amount: the portion kept from the deposit

  5. Category: Security Deposit

  6. Property & Tenant: select the applicable records

  7. Save the transaction.

Step 4: Record the Expense or Rent Payment

  1. Add a final transaction.

  2. Name: [Expense Type] paid for by Security Deposit

  3. Type: Money In

  4. Amount: the same amount as the retained portion in Step 3

  5. Category: based on what the deposit is covering:

    • For damages or repairs: select the expense category (e.g., Repairs & Maintenance → Painting)

    • For unpaid rent: select Rent

  6. Property & Unit: select the applicable records

  7. Save the transaction.

Tip: If the deposit covers both repairs and unpaid rent, repeat Steps 3 and 4 for each one.

Result: The security deposit is split between the refund and the amounts retained, the retained funds are reclassified from Security Deposit to the appropriate expense or rent category, and your ledger and financial reports stay accurate and balanced.

Flow 2: Full Security Deposit Refund

Use this process when the tenant is receiving their full deposit back.

Step 1: Add a Credit to the Tenant Ledger

  1. Navigate to the Tenant Ledger.

  2. Add a Credit entry.

  3. Label: Security Deposit Refund

  4. Amount: the full security deposit amount

Step 2: Record the Refund Transaction

  1. Go to the Transactions page and create a new transaction.

  2. Name: Security Deposit Refund

  3. Type: Money Out

  4. Amount: the full refund amount

  5. Category: Security Deposit

  6. Property & Unit: select the applicable records

  7. Save the transaction.

Result: The tenant ledger is balanced and your reports are updated accurately.

Note: Stessa does not issue refunds to tenants. Send any refund outside of Stessa using your preferred payment method, and keep a record of it.

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