I declare ANYTHING clients give me in the way of 'fees' as income because we are suppose to declare ALL income sources .... so their weekly fees, if they are late picking up and pay me overtime fee or they are late with a payment or if they get charged a NSF fee by me, sunscreen program, additional field trip costs and so forth all get recorded as income in my files ... however only their WEEKLY FEES get incorporated into their actual childcare tax receipt column because IMU the rest are not 'childcare fees' but rather account penalties so they have a separate column in their ledger to record them that does not get added into their year end receipt .... still income for ME but they are not eligible for the tax break for the parent just strictly the 'childcare' costs

Also remember if YOU get charged a bank fee for an NSF cheque due to a client make sure to claim that as a banking expense ... same with I claim any income clients give me for sunscreen but than I turn around and claim the sunscreen as an 'expense' so it balances out it just proper book keeping to record everything that comes in and goes out regardless so that in an audit there are no discrepancies!

With the security deposit ~ I do use the accrual method Treeholm has mentioned ~ so it gets recorded in the security deposit section of each clients ledger but does not get 'claimed' as income by me until I apply it to their account at the end of care in that tax year ~ which is when it will show up for them as a childcare expense.