NetLease - Security Deposits

Overview

This article explains how to handle security deposits within NetLease. The appropriate method for recording a security deposit depends on whether the deposit is refundable or non-refundable, and whether it is paid before or after lease commencement.

Security Deposit Types

The following table summarizes how each type of security deposit should be handled in NetLease:

Considerations

• Refundable security deposits are not included in NetLease functionality. These deposits must be managed outside of the application using standard NetSuite processes.
• Non-refundable deposits paid before commencement should be recorded in the Prepaid Lease Payment field on the lease record. This ensures the amount is properly incorporated into the lease calculations at commencement.
• Non-refundable deposits paid after commencement should be entered as a one-time payment within the lease payment schedule to reflect the correct timing of the cash outflow.
• If a security deposit is intended to offset the final lease payment, that offset should be reflected directly in the last payment amount within the payment schedule.
• If the period in which a deposit will be applied or refunded is not yet known at the time of lease entry, the lease can be recorded without the security deposit. When the period becomes known, a lease modification can be processed to account for the change.

Limitations/Callouts

• Refundable security deposits are outside the scope of NetLease and must be tracked separately within NetSuite or through another process established by the organization. Any transactions booked can be tagged to the NetLease record so it shows under Related Records.
• If the timing of a deposit application is uncertain, do not estimate the period. Process a modification at the appropriate time when the details are confirmed to ensure accurate lease accounting.