Record the agreement before recording the settlement
Keep the equipment list, hire period, deposit terms, extension rules and return conditions with the customer reference. The contract and actual facts determine the accounting and tax treatment. A label in the booking system does not settle every question.
Operational staff should record dispatch, return and the condition of the equipment. Their evidence supports the manager’s decision on extensions, missing items or adjustments. The bookkeeper should not infer damage charges from an unexplained difference in the refund.
Illustrative example: the security deposit is returned
A Burnaby production supplier collects a genuinely refundable $4,000 security deposit under the booking agreement. Equipment is returned without a claim and the full $4,000 is refunded. The rental fees are invoiced separately.
The deposit schedule shows the receipt and matching refund, rather than presenting the security funds as an extra rental sale followed by a general expense. Actual sales-tax treatment of the booking and any later charges is reviewed from the agreement and relevant rules; the example does not classify every payment called a deposit.
Build a final-settlement checklist
Match the agreed hire dates to dispatch and return records. Confirm approved extensions, transport charges, customer credits and outstanding supplier costs. Identify who authorized each adjustment and preserve the original invoice plus any credit or replacement document.
If equipment was subcontracted from another supplier, reconcile that supplier’s deposit or credit separately. A customer refund does not automatically establish that the business has recovered its own security deposit or resolved its payable balance.
Keep old bookings visible until settled
The event or production date may pass while refunds, claims and vendor credits remain unresolved. Assign each significant item a responsible person and review date. Do not clear a deposit balance simply because the booking is marked complete in an operational calendar.
At month end, compare the booking schedule with the customer and deposit accounts in the ledger. That reconciliation explains why cash received can exceed rental revenue and why a later refund need not represent a loss. It also gives the owner a reliable list of money still owed back or awaiting a documented decision.
Put this into practice
Sources and current guidance
A practical next step
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