Hi again RPP2021,
It's great to hear that you're already working with an accountant. I can appreciate not being sure of the proper steps to take in this situation and I want to make sure both you and your accountant have the information you need for moving forward with recording these kinds of transactions in your books.
As a member of the technical support team, I can't advise you on the best steps to take to record the transaction you're looking for. As Caroline mentioned, that falls into accounting territory, and since I don't have the training for that area, I leave it to the pros. What I will do is highlight a few of the different ways to record deposits in QuickBooks Online.
There are a few ways you can record deposits against invoices in the program. The first way is to turn on and use the built-in deposit feature so that the amount deposited is accounted for right away while the balance of the invoice is left open. Here's how you can turn on that feature.
- Go to the Gear icon.
- Choose Account and settings.
- Select Sales.
- Click the Sales form content section.
- Toggle the option for Deposit.
- Click Save.
Now when you go back to your invoice transactions, you'll see the deposit field in the subtotal, where you can enter the amount of the deposit as needed.
Another way to handle deposits is to use the steps outlined in the following article: Record a retainer or deposit. This method offers a bit more of an in-depth, although manual process of how you can go about it. This may be useful for your accountant.
As for your reporting, one thing to consider is if you're running the report in cash or accrual. If it's in accrual, it's going to show the amounts from invoices as well, even though those funds haven't actually been collected. For your purposes, running a report in cash may give you the more accurate outlook on your numbers that you're seeing. Here's an article about cash and accrual accounting: Choose between cash and accrual accounting methods in reports
As a note for your accountant, if they haven't already, they're welcome to sign up for a QuickBooks Online Accountant account. This kind of account gives them the tools they need and the opportunity to connect with you via the My Accountant tab to work with you directly in your books. They also have access to in-product training and certification to help them learn the ropes of using QuickBooks in an accounting capacity.
I hope that this information has helped you both. You may still receive responses from others in community who may be able to offer more accounting-based guidance on this, but this should get you started.
Take care and have a great week!
