Forfeit a security deposit
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When a customer breaks the agreement a security deposit secured, you may keep all or part of it. This page is for whoever looks after customer deposits.
Before you start
Section titled “Before you start”You need Invoice View and Edit set to All records, and the Forfeit security deposits control in your role. The receipt must still hold a security deposit, and your country must be confirmed under System settings → Tax.
Forfeiting is for compensation only. A deposit that pays for rent, fees, repairs or an invoice is a sale: use Allocate deposit to invoices or Invoice from deposit instead.
- Open the receipt from the account’s Receipts tab.
- In the ··· menu, select Forfeit security deposit. If it is greyed out, the line under it says why.
- Under Why is the deposit being kept?, choose the reason, such as The agreement ended early, as its terms allow the deposit to be kept. Choosing It pays for rent, fees, repairs or an invoice shows That is not a forfeiture and offers the two other routes.
- Check the amount, such as Amount to forfeit (SGD). It starts at the whole deposit held; type less to keep only part of it.
- Leave Forfeiture date blank for today, or choose an earlier day on or after the deposit was received.
- Add a Note. It is required for Other compensation (describe it below).
- Read the notice below the fields: it states the tax treatment and the condition it rests on. If it shows a red error instead, easySales cannot record this forfeiture and Forfeit stays greyed out.
- Tick I confirm the deposit is kept as compensation for the customer’s breach, not as payment for goods or services. and select Forfeit.
What happens next
Section titled “What happens next”easySales says “Forfeiture DF-… recorded.” No invoice is issued and no tax is charged; the amount is
recorded as other income. The receipt shows a Forfeited figure and a Forfeitures section,
where the forfeiture’s DF- number opens the NOTICE OF FORFEITURE OF SECURITY DEPOSIT (PDF) to
send the customer. Their statement lists the forfeiture in a note, never in the balance.
To undo a forfeiture entered in error, select Reverse on its row, fill in Why it was forfeited in error and select Reverse forfeiture. The amount is held again, and the record and its notice are kept, marked reversed.
Security deposit forfeitures register
Section titled “Security deposit forfeitures register”On the Invoices list, open the ··· menu and select Security deposit forfeitures under Registers. Filter by Forfeited between, Account and Show reversed, read the totals, and select Download CSV. It needs Invoice View set to All records.
Rules to know
Section titled “Rules to know”- Forfeiting is refused for a company registered for tax in Malaysia, New Zealand or Australia, and while your country is not confirmed. A Malaysian company that is not registered but issues e-invoices through MyInvois is warned that the forfeiture needs one, which you submit yourself.
- You cannot forfeit more than the deposit still held.
- A receipt with a forfeiture on it cannot be voided. Reverse the forfeiture first.
Why it works this way
Section titled “Why it works this way”Compensation is not a sale. When you keep a deposit because the customer broke the agreement, you
are not supplying them anything in return. That is why easySales records it as other income on its
own DF- record instead of issuing an invoice, and why it asks you to confirm it is compensation.
Money kept to pay for rent, fees or repairs is payment for a supply, so it goes through an invoice.
Your registration on the day decides the tax. The treatment is judged on your tax registration on the forfeiture date and written onto the record. A later change to your tax settings does not rewrite a forfeiture already made, so last quarter’s figures stay as you reported them.
The customer gets a notice, not an invoice. The notice shows the deposit received, the amount kept and what is still held for them. They can see exactly how their deposit was dealt with, and you have a document to point to if they dispute it.
Kept apart from sales. The register lists forfeitures as other income, separate from sales, so your accountant can report them correctly at year end.
Work faster
Section titled “Work faster”- Keep only what the agreement allows. Type the forfeited amount; the rest stays held, ready to refund. See Refund a customer.
- Send the notice straight from the receipt. The
DF-number under Forfeitures opens the notice in a new tab, ready to save and email. - Pick the route that fits. If the money pays for repairs or an invoice, Invoice from deposit or Allocate deposit to invoices is the right step. See Deposits and prepayments.
- Review forfeitures at period end. The Security deposit forfeitures register filters by date and account, totals them, and downloads as CSV for your accountant.
Examples
Section titled “Examples”Harbour Café left a refundable SGD 2,000.00 deposit on RCT-10000016 for display pieces it borrows. It ends the loan early, and the agreement lets Lim & Co keep SGD 500.00.
Mei Tan opens RCT-10000016, selects Forfeit security deposit, chooses the early-termination reason and types 500.00. The notice reads “No GST is charged on this forfeiture, …”. She ticks the confirmation and selects Forfeit. DF-10000001 is recorded, and its notice shows:
| Line | Amount |
|---|---|
| Security deposit received | SGD 2,000.00 |
| Retained by this notice | SGD 500.00 |
| Security deposit still held for you | SGD 1,500.00 |
Mei emails the notice, then selects Refund security deposit to pay back the SGD 1,500.00.
A forfeiture entered on the wrong receipt. Daniel Lim forfeits SGD 300.00 from RCT-10000023, a deposit of SGD 1,000.00 from another customer, instead of from Harbour Café’s. He opens RCT-10000023, selects Reverse on DF-10000002, types Entered on the wrong customer’s deposit and selects Reverse forfeiture. RCT-10000023 again holds SGD 1,000.00, and DF-10000002 stays in the register, marked reversed, when Show reversed is on.
Common questions
Section titled “Common questions”- Can I keep a customer’s deposit if they cancel? Yes, when the agreement allows it. Choose the reason that fits, such as the deal being cancelled with nothing supplied, and forfeit the amount the agreement lets you keep.
- Do I charge GST on a forfeited deposit? Not in Singapore: it is compensation, recorded as other income with no invoice. For a company registered for tax in Malaysia, New Zealand or Australia, easySales refuses the forfeiture. See Country tax & invoice rules.
- Can I keep only part of the deposit? Yes. Type the smaller amount in Amount to forfeit; the rest stays held.
- How do I undo a forfeiture? Select Reverse on it in the receipt’s Forfeitures section and give the reason. The amount is held again.
- Can I forfeit a deposit to pay for repairs? No. Repairs are a service: use Invoice from deposit to charge for them from the deposit.
- Why is Forfeit security deposit greyed out? The line under it gives the reason. Without the Forfeit security deposits control in your role, it does not appear at all.