Accounting entry

Good morning, @Whitney4715.

How are you doing today?  I hope all is well. 

If you accept upfront deposits or retainers for products or services, there are several steps you need to take to account for that money. I'll walk you through the steps below. 

First, you'll need to create a liability account for upfront deposits. Here's how:

1. From Transactions, click on Chart of accounts.
2. In the Chart of Accounts window, right-click and hit New from the pop-up menu.
3. Choose Other Current Liability as the account Type.
4. Enter a name for the account (for example, Upfront Deposit) in the Name field.
   Note: You should set up the account with a zero opening balance unless you are tracking existing upfront deposits or retainers.
5. Select Ok.

Next, you'll need to create a deposit item. This item is linked to the liability account you just set up to properly record upfront deposits. Here's how:

1. From the Lists menu, choose Item List.
2. In the Item List window, right-click and select New from the pop-up menu.
3. From the Type drop-down menu, choose the purpose of the deposits you collect.
   You can hit Service if you collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.
4. Enter a name for the item (for example Upfront Deposit) in the Item Name/Number field.
5. Click on the Upfront Deposit liability account you created from the Account drop-down list.
6. Tap on OK.

Now, you can record the deposit:

1. From the Customers menu, select Enter Sales Receipts.
2. From the Customer:Job drop-down list, choose the customer or job.
3. If the Deposit To field appears, select the account into which to deposit the funds.
   If this field does not appear, the funds are identified as Undeposited Funds and can be deposited at a later point.
4. Select the Payment method.
5. Enter relevant information, such as the Date and Sale No, in the appropriate fields.
6. In the Detail section, click on the Upfront Deposit item you created from the Item drop-down list.
7. In the Amount field, enter the amount of the deposit or retainer.
8. Tap on Save and close.

After recording the deposit, you can create the invoice to link to the deposit. To see the steps to do that, check out: Manage upfront deposits or retainers in QuickBooks Desktop (Step 4).

If you have any questions or concerns about this process, please don't hesitate to let me know. I'm happy to help you any time. Take care!