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Frequent Explorer **

Use Sales Receipt for Customer Deposits

I use sales receipts to record customer deposits. I have a chart of accounts other liability item and a list item tied to the other liability account. I create a sales receipt to record the deposit as a liability using the liability account.  When I create an invoice to charge the customer for the work, I add a line on the invoice using the customer deposit and using the amount as a negative number. The invoice comes out fine. But the amount on the sales receipt in the transaction center open balance does not change. Is this normal or am I doing something wrong? Best, Scott

6 Comments
Established Community Backer ***

Re: Use Sales Receipt for Customer Deposits

You are doing it right Smiley Happy - past sales should not change - only the balance in the liability GL account changes.

Established Community Backer ***

Re: Use Sales Receipt for Customer Deposits

I would recommend Not putting a negative on the invoice.

 

Put the Prepayment item on a Credit Memo and apply it to the invoice. That way, the Invoice in the customer transactions listing and reporting will still show the Amount that was this sale. Putting the negative on the invoice results in the the invoice showing a reduced about as "this total sale" when really, what you want to see is the prepayment as part of Credits Applied from that credit memo and from any other Payment they make against any remaining balance owed.

 

And make sure your business tax entity type is allowed to hold this as Liability. A Cash Basis entity that is not allowed to hold it as liability should link that prepayment item to Income. For Cash Basis, that is income when you get it, and reverses income when you Apply it, the same as a Discount for the amount prepaid (already reported as income).

Frequent Explorer **

Re: Use Sales Receipt for Customer Deposits

Hello all. 

 
First thank your your responses.
 
I have received your advice to put the use of the deposit in a credit memo and apply it to the invoice. When I google how to apply a credit memo to an invoice it says to apply it as a payment. But then the customer does not see the deposit they paid on the invoice to reduce the amount due. I do not understand why this is a good idea. 
 
My other thought is why does the Sales Receipt have a balance column if it is not going to change? The invoice screen has Amount and Open balance columns that reflect activity. Why doesn’t the Sales Receipt reflect activity?
 
Please understand that I am a small business owner who is not an accountant or bookkeeper. I simply use Quickbooks. I have no real interest in being either a bookkeeper or and accountant. I need to use something to run my business and this is what I use. So please do not berate me for not understanding how these things work. THANKS! I have had some unfortunate interactions over the lack of accounting knowledge before. Hence the comment.
 
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This is for the people who develop the Mac version of Quickbooks. It is very inconsistent. Many things that should work the same do not. Drop down lists that do not react the same way depending on where you are in the program come to mind. Some drop down lists alphabetized and some appear random. Sometimes you get find as you type in a drop down list and sometimes you don’t. Etc… Do the people who code this ever use it? Very frustrating.
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 MikeinBC how do I find the ledger you refer to?
QuickBooks Team

Re: Use Sales Receipt for Customer Deposits

Good day, Scott5702.

I can provide you with little insights about using sales receipt for customer deposits in QuickBooks for Mac.

 

If you want to apply the deposit to the invoice, you'll need to use the Accounts Receivable for the deposit and apply it to the customer. This way it will reduce the invoice amount due.

 

If the report shows an open balance, that column will always be zero. Since the Sales receipt is tagged as a paid sale.

 

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Re: Use Sales Receipt for Customer Deposits

@RoseMarjorieA

 

Please Learn from the input here. You have given Bad Guidance. The use of AR for the Deposit is not right for what is being reviewed.

 

The Sales Receipt entry for managing Funds prepaid means you use the same prepayment item and amount on the Credit Memo. This clears your liability account, if that is what you are allowed to hold prepayments as. Or, it offsets that this was already treated as income when you got it, for a cash basis tax reporting entity.

 

Nothing here is also AR, manually. And using AR in "deposit entries" is Wrong for both cash and accrual basis tax entities.

 

@Scott5702

 

Yes, you Apply the credit memo to the invoices. For this:

"When I google how to apply a credit memo to an invoice it says to apply it as a payment. But then the customer does not see the deposit they paid on the invoice to reduce the amount due. I do not understand why this is a good idea."

 

You likely need to Customize your Invoice template; Intuit tends not to make them meet our needs. You need the Footer to show the following:

Total <== this sale

Payments/Credits Applied <== the CM prepaid value will show here

Balance Due<== eventually goes to Zero.

 

And you can use Statements. That would show, for instance:

Invoice $5,000

Credit Memo -$2,500

 

Which explains why the Footer on the invoice also shows they still owe $2,500 for that partially prepaid sale.

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Re: Use Sales Receipt for Customer Deposits

@RoseMarjorieA

 

Intuit's Own Support Article is right here:

https://community.intuit.com/articles/1774522