Deposits paid to venues and caterers
How an organiser records deposits paid to venues and caterers before an event, as part payments on a bill or as prepayments, and settles the balance.
By Achekam · · 4 min read · For Events businesses in South Africa, Nigeria, Kenya
Good venues are booked a year ahead, and they want money to hold the date. The caterer wants a deposit when the menu is confirmed, the marquee company when the layout is signed off, the headline act's agent when the contract is countersigned. By the time the event arrives, you may have paid a large part of its cost already, in instalments, to suppliers who have not yet delivered anything.
Those deposits are not costs of the month you paid them. They are amounts you are owed in goods and services. Recorded as expenses on the day they leave your bank, they make the months before an event look like losses and the event month look better than it was. This article shows two clean ways to record them in Achekam and how to settle the balance afterwards.
A deposit before the vendor's final invoice
A deposit paid ahead of delivery is a prepayment: you have paid for something you have not received yet. Investopedia's guide to prepaid expenses explains how payments made in advance are recorded first as an asset and then expensed as the goods or services arrive. For an event, "as they arrive" usually means the event month.
How you record the deposit depends on one question: has the vendor given you an invoice yet?
| The vendor has... | Record it as |
|---|---|
| Issued an invoice for the whole booking, with a payment schedule | One supplier bill, paid in parts |
| Asked for a deposit with no invoice, only a booking form or quote | A prepayment, by journal, until the invoice arrives |
Where you can, ask for the invoice up front. A venue that issues one when the booking is confirmed makes everything that follows simpler.
Paying a bill in parts
When the vendor's invoice comes first, record it once as a supplier bill, line by line with its VAT. A bill entered without a purchase order waits for approval before it posts, so a second person sees every large commitment. A bill can be paid in full or in parts from the bank account you choose, so the deposit is simply the first part payment and the balance is the last.
The bill is then in your payables for the full amount from the start, and what is still owed reduces with each payment. Ask your accountant whether the bill should sit in the event month or the month of the invoice; for a booking invoiced far ahead, they may want the cost held as a prepayment until the event, using a journal.
A note for organisers in Nigeria and Kenya: supplier bills currently offer only 15% or 0% VAT and default to 15%. Check each line's VAT before the bill posts, and agree any adjustment with your accountant.
Prepayments by journal where there is no bill yet
When a venue wants a deposit against a signed booking form and will invoice only after the event, there is no bill to pay against. Your chart of accounts can be extended, so add an asset account called something like "Deposits paid to event suppliers".
When the deposit leaves your bank, it appears on your imported statement. Bank lines are matched by suggestion and a person accepts each one, and a line not yet in the books becomes a suggested journal that a person approves. Book the deposit line to the deposits account, not to an expense, and put the vendor and the event in the description.
When the vendor's final invoice arrives, record it as a bill for the full amount and pay only the balance. The deposit already paid is still sitting in the deposits account, so clear it against the vendor with a journal your accountant sets up, and make sure nobody pays the full bill by mistake. A posted journal is corrected only by reversing it, so agree the entry before posting.
Committed spend from approved orders
Deposits are a symptom of commitments, and commitments are where event budgets go wrong. If you raise purchase orders for your big suppliers, each one is raised from the selected quotation of an approved requisition, and the person who raised it cannot approve it.
Approved orders count as committed spend against your budgets per expense account and period. The procurement screen shows budget, spent, committed and available for each line, and flags over-committed lines without blocking a purchase. Months before the event, that view answers the question that deposits on their own cannot: how much of the budget is already promised away, paid or not.
Settling the balance after the event
After the event, each vendor's final position should be checked before the last payment goes out:
- Compare the vendor's final invoice with the order or booking, and with what you actually received.
- Where the invoice is recorded against a purchase order, a difference in price or quantity holds it until someone writes a resolution note.
- Pay only the balance after deposits.
- Check the deposits account for the event in the general ledger. It should be back to nothing.
Anything left in the deposits account after the event is a deposit never matched to an invoice: either the vendor has not invoiced, or the deposit was refundable and is still owed to you. Chase both.
Set up the deposits account before the next booking, and ask every new vendor for an invoice when you pay them. To keep the total inside the event budget from the first deposit onwards, read keeping vendor spend inside the event budget, and for confirming orders with suppliers, see getting an approved order to a vendor.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
