The Deposit feature in Mews helps you declare tax on prepayments at the time of payment, which is essential in legal environments where tax liability starts when the payment is received. You use this feature to correctly record tax and deposit activity in your ledgers. You do this when handling advance payments for future stays, and you manage this process directly in Mews Operations.

 

How the deposit feature works:

• When a guest makes a prepayment and you use the deposit feature, either manually or through automated set up, Mews creates two deposit items:
  • Positive deposit item
  • Negative deposit item

Learn more in our help article Understanding deposits

 

 

 

In this article you can learn about:

• Accounting category setup
• What happens in your ledgers when you receive a deposit
• What happens when the guest checks in
• How to track if you used the deposit feature consistently for all prepayments

 

Accounting category setup 

 

To keep postings clear and easy to reconcile, Mews recommends using dedicated accounting categories:

 

For example:

 

What happens in your ledgers when you receive a deposit

Processing deposit items, for example, receiving payment, closing it against the positive deposit item, and declaring the tax results in the following ledger movements:

 

1. Creation of deposit items

 

2. Posting of the actual payment

 

 

 

The result of the system posting these entries is:

• The Deposit ledger shows the net prepayment amount.
• The Non-revenue ledger in the Ledger activity report shows the declared tax amount.
• The Payments ledger in the Ledger activity report reflects the payment transaction.

 

For example:

• Deposit ledger shows:
  • the net amount in the Deposit balance field
  • the Gross amount field to help reconcile the deposit ledger with actual payments
  • a warning icon if the system detects that tax has not been declared correctly. For example,
    • if the full payment amount does not have tax declared
    • if you have not closed the deposit bill to create a tax receipt

 

 

• Ledger activity report:
  • Non-revenue ledger:
    • Deposit created:
      • Amount: Positive deposit accounting category indicates the tax on deposit
      • Net: Payment value without tax

 

• Deposit ledger in the Ledger activity report:  
  • Deposit created:
    • Amount: Positive deposit accounting category shows total (gross) prepayment amount for which the system declared the tax
  • Deposit consumed:
    • Amount: Negative deposit accounting category plus shows prepayment amount after tax was declared (net) 
  • None:
    • Payment accounting categories shows gross amounts of payments registered for future stays
  • Total:
    • Net result of these postings is a net payment amount

 

 

What happens when the guest checks in

When a guest checks in, the following happens:

 

After this, the system posts stay charges to the Guest ledger.  Those charges also flow into Revenue and Non-revenue ledgers, where the system re-posts tax accordingly.

For example:

• Guest ledger: Shows open guest bill, where gross value of deposit is shown in Total payments field, and Outstanding balance shows remaining to be paid. As not all charges are consumed yet, outstanding balance is negative. Once the system consumes all charges it displays zero.
• Deposit ledger: Deposit is no longer visible.

• Ledger activity report:
  • Non-revenue ledger:
    • Deposit consumed: Negative deposit accounting category
      • Amount: Shows deposit tax consumed today
      • Net: Shows deposit amount after declaring tax

Note:

• The Non-revenue ledger gives clear indication on deposits created and consumed on a given day, with information about the declared tax amount and the amount after tax has been declared.
• Mews plans to add in the Gross amount so you will be able to easily reconcile the full payments amount in a future update.

 

 

 

How to track if the system used the deposit feature consistently for all prepayments

To validate you created deposits and declared tax for all your prepayments:

• Filter the Deposit ledger by the Tax declaration field.

• Use the Trial balance export to check the Deposit ledger section.
  • Look for the “Tax not correctly declared” flag in the Tax declaration column.