Thanks for reaching out to the Community, wilson. I'll ensure you can set up a credit entry when creating a new invoice using a Balance sheet or a Liability account in QuickBooks Online (QBO).
Yes, you can use a Balance sheet or a Liability account to record a retainer or deposit in QBO. The retainer or deposit is treated 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. When you invoice the customer and receive payment against it, you'll turn that liability into income.
Initially, you'll want to set up a liability account from your chart of accounts. See the steps below:
After that, create a retainer item.
Once done, the retainer item can now be selected when creating an invoice or sales receipt for a deposit or retainer payment. After then, you can create sales receipts or invoices for deposits or retainers. See this article for the following steps and process: Record a retainer or deposit.
I'll be adding this article for future reference: Record invoice payments in QuickBooks Online.
Feel free to get back to us if you have clarification about the process or any other QuickBooks-related concerns. Take care always!
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