Hi walter-weppler-w,
Thanks for reaching out in the Community! I'd be happy to provide some information on deferred sales.
To set up deferred revenue in your QuickBooks Online account, follow these steps:
- Create a Liability Account for Deferred Revenue:
1. Sign in to QBO as the primary admin.
2. Click the Gear icon ⚙ at the top right corner and select Chart of Accounts.
3. Click New to create a new account.
4. Choose “Other Current Liability” as the account type.
5. Name the account “Deferred Revenue” or a similar descriptive name.
6. Click Save & Close.
- Create a "Retainer" Item:
1. Go to the Gear icon ⚙, then select Products and Services.
2. Click New to add a new product or service item.
3. Choose Service as the type.
4. Enter a name for the new item (e.x., “Retainer”).
5. From the Income account dropdown menu, select the liability account you created earlier.
6. Click Save and Close.
- Apply Prepayment to Invoices:
When you invoice a customer for services or products, you can turn the retainer (prepayment) into credit on the invoice.
- Apply the prepayment to the invoice that includes both product and service content.
- The remaining balance will be reflected in your invoice.
Remember that deferred revenue represents income received for services or products that will be delivered at a later date.
If there are specific accounting or legal considerations, seeking advice from a professional accountant is advisable.
You can open this article that details the process of recording a retainer in QuickBooks Online: Record a retainer or deposit.
For future reference, I'm adding this guide on how you can record a customer refund based on various scenarios: Record a customer refund in QuickBooks Online.
Let me know if you have follow-up questions by adding a reply below. I'm here to help.
