To use the QuickBooks integration with EMD, you must have Commissions V2 QBO integration enabled. The integration is not required to track EMD outside of QuickBooks.
Earnest Money Deposit (EMD) demonstrates a buyer’s commitment to purchasing a property and is held by a neutral third party until closing. With BoldTrail BackOffice, managing EMDs is seamless, ensuring accurate tracking, compliance, and easy financial reporting.
Typical scenarios where EMD simplifies the process
An agent secures a buyer and needs to ensure the EMD is recorded and monitored. You can track expected, received, and refunded deposits right from the "Earnest money status" company report.
A brokerage needs to send deposit receipts to comply with state regulations. BoldTrail BackOffice allows quick and easy receipts generation for proper documentation. On the Earnest money page, go to Actions > Generate statement > Send to email.
A brokerage using QuickBooks wants all EMD transactions accurately recorded in their accounting books. The automated BTBO <> QBO sync ensures proper financial tracking without manual data entry.
An auditor requests a full breakdown of the brokerage’s EMD history. The Earnest money activity report clearly shows all EMD transactions with each deposit and distribution for complete transparency.
Step 1: Track an expected EMD
Once a purchase contract is signed, you can start tracking the expected earnest money deposit.
Navigate to Transaction > Finance > Earnest money.
Click Add Expected EMD.
Select whether your office holds the deposit or if it is held externally. Then, enter the expected amount and due date.
Choose whether to track EMD-related records in your general ledger.
Click Create to track the expected deposit.
Important: No financial entries are created until the funds are received.
Step 2: Record a received EMD
Once the buyer submits the deposit, you need to record it in the system.
Navigate to the Earnest money page > Actions > Add deposit.
Enter the payer’s details, payment method, and the Payment Date and Deposit Date (these may differ, especially for checks). Attach supporting documentation if needed.
Click Create to finalize the deposit entry.
Your Earnest money page will now reflect the received funds, with clear status indicators for any incomplete deposits.
EMD statuses
The EMD status indicator tells you what action should be taken next. You can also report on these status messages globally in Reports.
Status | What it means |
Not Received | The full expected EMD amount has not been received. |
Overdue | The full expected EMD amount has not been received, and the Due Date is in the past. |
Pending Bank Deposit | The full expected EMD amount has been received with Payment Date completed, but Deposit Date has not been input. |
Fully Deposited | The full expected EMD amount has been deposited. |
Distribute Balance | Total Funds Held is greater than $0 and the transaction status is Closed or Cancelled. |
Complete | Total Funds Held is $0 and the transaction status is Closed or Cancelled. |
Step 3: Apply EMD to an Invoice
When an EMD needs to be applied toward an agent’s invoice or closing costs:
Click Actions > Apply Deposit.
Select the Date, Payer, Bank account, and the specific outstanding transactions invoices to apply.
Confirm the allocation and click Create.
Step 4: Close a Transaction with EMD
As the transaction nears closing, it's a good idea to ensure all EMD funds are properly distributed:
If undistributed amounts remain, a DISTRIBUTE BALANCE callout will appear.
Navigate back to Earnest money and select Actions > Refund deposit.
Specify the refund details, including Payee, Amount, Payment method, and Date.
Click Create to complete the process.
Once finalized, the EMD balance will zero out, and the status will be updated to Complete.
Earnest money in the General Ledger
When tracking transactions in the General Ledger (a feature available in the Professional plan), please note that all earnest money deposit transactions must be handled through the Earnest money tab, not the General Ledger itself. This approach helps streamline your workflow and reduces the chance of accounting errors.
Step 5: Accessing Reports
For compliance and financial tracking, BoldTrail BackOffice provides two key reports:
Earnest Money Status Report
Provides a real-time snapshot of EMD balances across transactions.
Use EMD groups to view pre-selected expected deposits, distributed funds, or overdue amounts.
Filter by EMD status to fine-tune the displayed list.
Earnest Money Activity Report
A complete audit trail of all EMD transactions.
Ideal for audit preparation and compliance checks.
Step 6: Syncing EMD Transactions with QuickBooks
With the integration enabled, all EMD transactions automatically sync with QuickBooks to ensure seamless accounting.
Ensure you have enabled the latest QuickBooks General Ledger (V2) integration. Click here to learn more.
EMD transactions will not sync if you use the legacy QuickBooks Commissions Only (V1) integration)
Workflow example
When your brokerage receives an earnest money deposit, BoldTrail BackOffice automatically creates all necessary accounting entries in QuickBooks. Here's the example of how it works:
Let's say you receive a $2,000 deposit - the system first records this in your earnest money bank account while creating a matching entry, showing you're holding these funds.
When commissions are earned, the system creates receivable and payable entries for both agent and brokerage portions.
As you apply the deposit to cover commissions, transfer remaining funds, or issue refunds, all corresponding entries are created automatically in QuickBooks.
For example, if you're retaining $1,600 for commissions ($1,000 for agent, $600 for brokerage) and refunding $400 to the buyer, BoldTrail BackOffice handles all these movements seamlessly, updating your earnest money and operating accounts accordingly.
EMD records flow in QuickBooks Online
(+) means the amount increases
(-) means the amount decreases
All entries are created automatically
Your EMD balance should always match your liability account
The operating account is separate from the EMD holding account
Step | Action in BoldTrail BackOffice | What Happens in QuickBooks |
1 - Record deposit | Add deposit under EMD  |
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2 - Record commission | Post to General Ledger  |
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3 - Apply EMD to invoice | Apply deposit  |
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4 - Refund EMD | Refund deposit  |
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5 - Pay Agent | Record payment  |
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