Labour, equipment and site cash
Post the cash margin of bank guarantees
When the bank holds a cash margin against a guarantee, post it out of the bank account on issue, back on release or expiry, and to a loss account when the guarantee is called.
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In this article
Banks often issue a guarantee only against a cash margin: a part of its amount, often 10% to 25%, held from your account until the guarantee is returned. That cash is still yours, but you cannot use it. Posting it moves it off the bank balance onto a guarantee margin account, so the bank account matches the statement and the money tied up shows on the balance sheet.
Turn it on
Open Projects › Project Accounts and find the Labour costing and guarantees card.
Turn on Post bank guarantee cash margins and save.
On the same screen, under Cash and guarantees, choose the guarantee margin account (a level-5 asset account). See project account settings.
Each guarantee needs its bank account, whose GL account the margin is paid from.
Issue with a margin
When you select Issue on a guarantee in the guarantees register, enter the Cash margin % of its amount, or the Cash margin amount itself.
Issuing posts the margin: the guarantee margin account is debited and the bank's account credited. When the guarantee is for an award with a project, the margin carries that project.
Release, expiry and claim
Release, or the guarantee Expired on its date: the margin comes back to the bank account.
Claim: the bank keeps the margin. Choose the account it is charged to in Charge the forfeited margin to, usually an expense or a receivable from the client, and confirm.
Common questions
What happens with the setting off? The margin is only recorded on the guarantee; nothing is posted.
Are bank commissions posted too? No. Post the bank's commission and fees from the bank statement as usual.