My customer wants an invoice of a product we build. (Which takes a few weeks to create)
We require a deposit before making the product. (But the customer wants to see the deposit on the Original invoice)
But we do not want to bill the customer until the product is completed with the final payment.
We would like to keep the GST in the correct quarter when final payment is made.
How do we create an invoice for the customer to see with everything on it, BUT not bill it out till a later date?
Delayed charge will not work due to it does not print off a copy for the customer.
Hello there, @AJinAB.
I appreciate you providing details about your concern. I can help you account and record the deposit for the product your build for your customer.
The retainer or deposit is treated as a liability in QBO. 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.
To record this correctly, you'll have to follow the steps below:
Turn retainers into credits on invoices
Transfer funds from your trust liability account to your operating account
After that, run and customize the Balance Sheet report to track deposits or retainers by customer. For detailed steps and recommendation, you can refer to this article: How to record a retainer or deposit.
That should do it, @AJinAB. Please let me know how it goes or if you have any follow-up questions. I'll get back to you as soon as possible.
Thank you for you help but this does not answer my question. Your answer is for recording a deposit.. I need a "temporary" invoice.
Customer wants an invoice up front.
We do not want to create an invoice until final payment is made.
(I have already created customer deposit in the G/L and in Products & Services)Recording this is not issue.
How do I make a "temporary" invoice for the customer (which could be April, so we could receive a deposit from them. (Not just the deposit invoice) & a final one (Which could be July) for the company when the product is completed?
I want to record the GST in the proper quarter.
I want to make sure to point you in the right direction for help setting up an invoice in your account.
Invoices are typically issued before final payments are made. It sounds like you may be referring to an Estimate. Take a look at this article on how to 'Set up and use estimates and quotes'.
Here's another helpful article you may need: Set up and send progress invoices in QuickBooks Online. Progress invoicing lets you split an estimate into as many invoices as you need. Instead of asking for full payment at the beginning of a project, you can invoice customers for partial payments. As you complete work, add items from the initial estimate to progress invoices. This keeps project payments organized and connected from start to finish.
Since you're looking for something quite specific, I'd recommend calling our phone support team if these articles don't fit your needs. The number to call is 855-253-1536, and the hours are 9am-8pm EST, Monday-Friday.
I hope this helps. Let me know if you've got questions.
Have a great day.
You are correct that you should not bill any GST until the actual 'real' invoice is created. To get a payment from your client that is simply a deposit should not require any paperwork except a receipt, indicating that you have received money from them. It is simply an amount paid in advance without tax implications at this point. However, I know some businesses are fussy about this and want some kind of invoice for their records.
You indicate that you 'have already created customer deposit in the G/L and in Products & Services'. But since you have already recorded the deposit to the bank and you have already recorded the sale, that leaves you nowhere to post your 'temporary invoice' to. The sale should not be recorded at this point. When you receive the cash, you now simply have a liability on the books, to that client. The entry should be to Debit the bank and Credit the liability. If you have not yet reconciled the bank account that contains this deposit transaction, you can do the following:
1. Delete the deposit or the line in the deposit pertaining to this customer deposit.
2. Create an Invoice using your Customer's Name. Create an 'Item' called something like Customer Deposits, or whatever you like. Make the item an 'Other Charge' item type. Use Tax Code 'E'. If you do not currently have an Other Current Liability G/L account called 'Customer Deposits' or some other such name, create one now. Use this account in your Customer Deposit item.
3. Enter your Customer Deposit item name on your invoice. Type in whatever description you want, something like Customer Deposit received in advance of job completion.
4. Enter the amount of your deposit.
5. Receive deposit payment against this invoice.
6. Deposit payment into the bank.
You now have a) given your customer the invoice they require, b) recorded the deposit into an other liability account and c) deposited your customer's money at the bank.
When you make up the real invoice, put in all your sales items and applicable tax items as necessary. Then make another line with a -1 in quantity, or (-) $ amount to deduct the amount of deposits already received. The real invoice will now reflect a) your proper sales amounts b) your proper tax amounts and c) record of all deposits already paid, leaving a bottom line of Balance Due from this customer. The negative Deposit line on this invoice will clear the liability you created on your original invoice to the Other Current Liability account.
If you have already reconciled the bank account that contains the customer's advance deposit, there are a few more steps you'd have to do to complete the above.
1. Find the deposit where your customer's advance payment was deposited to the bank.
2. Add a line to the deposit using some kind of 'slush' account in your G/L. I have a bank account called 'Internal Clearing' that I use for this purpose.
3. Put in the exact $ amount of the advance deposit received from your customer.
4. Delete the original deposit line from the customer.
5. Note the deposit amount has not changed. Save the deposit, but keep it open.
6. Create the invoice as described above.
7. Receive payment of advance deposit against invoice created above.
8. Go back to your deposit.
9. Click on payments. The payment receipt you just made for the customer is in the list. Choose it.
10. Now the correct payment transaction is in your deposit.
11. Delete the line you previously created as a 'placeholder'. Save the deposit.
The previous bank reconciliation doesn't care about the 'content' of your deposits, only the $ amount. That is why you can do the above without messing up the previous reconciliation.
Either one of these situations describe should accomplish what you are looking for.