AppFolio Tutorials - Ep. 13 Security Deposit Refunds Partial Refund

Hello everyone, and welcome to APM Academy. In today’s video, we’re going to go over security deposit refunds, including both partial and full refunds.

Partial Security Deposit Refund

Let’s walk through an example:

Scenario: Tenant “Thorn Open Shield” paid a $2,000 deposit and is eligible for a $1,000 partial refund (e.g., for yard work or maintenance).

Step 1 – Enter Charge

1. Go to the task on the right-hand side → Enter Charge.
2. Enter the refund amount ($1,000).
3. Set the charge date to the date of refund.
4. Select the GL account for clearing (e.g., 21410 – Deposit Clearing).
5. Add a description: Partial refund deposit.
6. Click Save.

At this point, the tenant’s balance will reflect the partial refund.

Step 2 – Enter Credit

1. Go to the task → Enter Credit.
2. Enter the refund amount ($1,000).
3. Set the credit date (same as charge date).
4. Use your Deposit GL account.
5. Copy the description from the charge or write something like: Partial deposit refund.
6. Click Save.

This reduces the total deposit paid for the tenant.

Step 3 – Remove Diagnostic Clearing

1. Go to the task → Tenant Payable.
2. Enter the total amount of the partial refund ($1,000).
3. Select the cash account:
   • If using two bank accounts, post the credit and then complete the bank transfer from the security deposit account to the rents account.
   • If using one cash/bank setup, leave it as automatic.
4. Set the GL account to the clearing account.
5. Add Bill Date and Due Date as the refund date.
6. Add remarks: Partial refund of deposit.
7. Click Save.

Step 4 – Issue Payment

• You can select Pay by Check Now or choose an online payment platform.
• Select Other Payment if needed, then click Save.

Once completed, the tenant ledger will reflect the reduced deposit and the $1,000 refund.

Summary

• Partial refunds involve three main steps: Enter Charge → Enter Credit → Post Tenant Payable.
• Always check the Diagnostics page to ensure the clearing account balance is zero.
• Fill out remarks and descriptions carefully, as these appear on owner statements.

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