@NonFinanceFolks
create a service type item named deposit, and link it to a liability account you set up called customer deposits
use that on an invoice or sales receipt when you get the deposit
use that same item with a qty of negative one when they with draw from the service if there is a balance due, or just issue the refund and use that deposit liability account as the expense (reason) for the payment
You can start a discussion as to whether or not the customer payment is income, in theory it is, and then you have an expense you pay, and on the P&L income is reduced by expense so it is a wash. But some states tax you on gross income, so use a liability account named for the service when you pay the expense, and use a service item linked to that liability account when you invoice the customer. the income and expense will wash in the liability account.
