Third Party Deposits

A third party deposit arises when a third party remits cash to cover the deposit needs of one or more accounts. Both cash and non-cash deposits must be created to record a third party deposit. The following example will explain how to do this.

Assume the Salvation Army remits $5,000 on behalf of 50 customers (where each customer's account is allocated $100). In this situation, you'd create the following information in the system:

• The Salvation Army must have an account with a deposit service agreement.
• When the Salvation Army remits the funds:

• Create an adjustment to "bill" the deposit service agreement (causing the deposit SA's current balance to be $5,000 and the payoff balance to be 0).
• Add a payment for the $5,000 against the Salvation Army's account. This payment will cause the deposit SA's current balance to be 0 and the payoff balance to be -$5,000. Note, if you don't mind the Salvation Army's current balance to be -$5,000 after the payment is made, you wouldn't have to create the adjustment to "bill" the deposit.
• Create a non-cash deposit for each of the 50 accounts being covered by the cash deposit. On each non-cash deposit, define the appropriate non-cash deposit type (e.g., 3rd party deposit) and amount $100 each.
• Interest will be applied to the Salvation Army's deposit service agreement as per the interest algorithm on the deposit SA's deposit class.
• If you need to use the Salvation Army's payment to payoff overdue debt, you will use a transfer adjustment(s) to transfer from the deposit service agreement to the respective overdue service agreement(s).