Customer Deposits

Hello Cheryl, 

QuickBooks makes it simple to keep track of your transactions. With the amazing tools and features offered by the program, you can easily simplify the way you handle your accounting. I'd be glad to steer you in the right direction so you can focus on the things you enjoy doing. 

Making sure you're recording your transactions properly is an essential step for maintaining clean books. Based on what you've described, I encourage you to check out this helpful article which shows you how to properly: 

Manage upfront deposits or retainers in QuickBooks. I'd also suggest reaching out to an accounting professional for expert advice on how to categorize the transactions. If you're not in contact with a professional, don't worry, you can search for one using this link here.

If you still have questions after checking out the article above, feel free to leave a comment below. I'll be here to assist. 

@Cheryl_E 

Consider having an additional app to integrate with your QBO account.

Do you have suggestions for additional apps? I didn't even know this was a thing! 

So if I am understanding correctly, this is holding the deposit as a liability until applied to the final invoice upon completion of the project.

Would this still be applicable if I was using the funds received as a deposit to purchase the custom products and not being held as a liability?

What is the purpose of the deposit field on the invoice if that is not the correct way to record a deposit?!

Hello Cheryl_E. Glad to hear back from you again. You can search for third-party apps on our website using this link here. I recommend going with an app that suits your business needs based on the app description and reviews. The deposit is handled 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. This article here has more info on how to create a liability account if you need to and it also goes over how to best use the deposit feature in QuickBooks. Let me know if this info helps, I'll be one message away in case you need anything. 

@Cheryl_E 

Explore this app

https://get.practiceignition.com/quickbooks

I didn't see anything about the deposit box on the invoice in this link.  Can you explain its use for me?

Hi Cheryl,

Thanks for getting back to us on this thread. Knowing about features such as the deposit box on the invoice is a great way to maximize your work for your business. I'll be glad to help you with this.
 

In QuickBooks Online, the deposit box on the invoice allows you to record the money you have received in advance to reduce the balance due amount of the invoice. The PDF version of the invoice will show the total amount, the amount of the deposit received and the balance due on the invoice. The balance due will be the difference between the total amount of the invoice and the amount of the deposit received.

Let me know if you have any questions, I'll be happy to help.

Right.  But when a value is entered in the box, it records it as funds received in my chart of accounts.  So to use this deposit feature on the invoice, you have to create an invoice in order to accept a deposit that has been receive.  Since I have created the invoice, I am now paying the taxes this quarter for a job that is not being completed until next. I'm also left with a ton of open invoices. 

Here is my current work flow: 

1. Customer approves project

2. I create an estimate in QBO and mark as approved. 

3. I collect deposit from customer- either in person or over the phone

4. I create an invoice from the estimate in QBO

5. I enter the value of the deposit collected from the customer in the deposit box on the invoice

6. Adjust the due date of the invoice to beyond the projects expected end date so it doesn't get flagged as overdue

7. I send a copy of the invoice to the customer advising that the remaining balance is not due until completion of the project and to disregard the pay option at this time

So how do you use this deposit box on the invoice, while using the method to collect/record a deposit as linked above?

Hi Cheryl_E,

I'm happy to see you reaching back out to Community.  Thanks for sharing your workflow so we can have a better understanding of where you're at.  I'd be happy to assist!

In review of you're posts, I'd like to take this opportunity to offer my suggestions.  Initially, the best course of action would be to create a Deposit Item in the Products and Services, so it can be selected when you're creating an Invoice as outlined in this article; Step 2.  This would be similar to a Sales Receipt with the exception being, you won't select a Deposit To account until you've received payment against the invoice.  You'll then create the invoice and in the Product/Service column, select the Deposit item you've created previously.  Enter the Amount, Save and Close (see Option 2 in the article).  When you create an invoice for your customer for the services you've provided, you're going to enter the Deposit on the Last Line of the invoice as a negative amount so it's subtracted from the invoice.

This applies the credit to your customer's invoice, decreases the amount in your liability account and records it as income.  For more information and a better understanding of how this works, please refer to the article in the link I've provided above.  I hope this helps!

Don't hesitate to reach back out if you need further assistance.  We're here for you!