I run a travel and tourism business and I'm wondering what is the best way to use quotes and invoices?
Our customers book for a tour and pay a deposit up to 12 months in advance and then pay the balance of tour costs about 2 months before the tour.
Currently when they book I issue an invoice for the full tour costs, and record a partial payment when they pay their deposit. The problem with this is that I record the income on the date of the invoice which can be months and months before the actual tour operates and it can really skew P&L etc.
Would I be better to issue an invoice for the deposit only and a quote for the balance of the tour costs that I then convert to an invoice when the customer is due to pay?
Let me share with you some information about invoice and quote in QuickBooks Online.
In the scenario you've shared above, we can record the deposit as a retainer. The retainer or deposit is treated as a liability to show that, although your business is holding the money from a deposit or retainer, it doesn't belong to you until it's used to pay for services. When you invoice the customer and receive payment against it, you'll turn that liability into income.