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Level 1

How to record payments today for future services and not mess up this month's P&L

Hi

 

  • We run a travel company and can take bookings for trips running up to two years in advance.
  • We take a deposit, with the balance due 90 days before the trip.
  • The trouble I'm having is that the sale is showing up on this month's P&L, which is causing chaos.
  • I need two things:
    • The invoice to show as a liability until the trip is delivered
    • The income from that invoice to match to the same month as the costs incurred in delivering the trip, not the month I made the sale.

Any help greatly appreciated!

 

Bruce

Solved
Best answer May 21, 2020

Accepted Solutions
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QuickBooks Team

How to record payments today for future services and not mess up this month's P&L

Good day, Bruce J.

 

The best way to record this payment is by a retainer. This is a deposit or advance payment from your clients that we consider as a liability until we apply it as a payment to your invoices or sales receipt.

 

The first thing we need to do is to create a liability account where we'll record the funds. You can follow these steps:

  1. Go to the Accounting tab and select Chart of Accounts.
  2. Select New. Choose Current Liabilities as your Account Type and Trust Accounts - Liabilities for the Detail Type.
  3. Enter the other details, then Save and close.

Once done, create a service item for the retainer and use the liability account you set up as its income account. Then, use a sales receipt to record the deposit.

 

You can also refer to this link for the detailed steps: Record a retainer or deposit. It'll also show you how to apply it when you record the final sale transaction.

 

Please post again if you need anything else. Wishing you all the best!

View solution in original post

2 REPLIES 2
Highlighted
QuickBooks Team

How to record payments today for future services and not mess up this month's P&L

Good day, Bruce J.

 

The best way to record this payment is by a retainer. This is a deposit or advance payment from your clients that we consider as a liability until we apply it as a payment to your invoices or sales receipt.

 

The first thing we need to do is to create a liability account where we'll record the funds. You can follow these steps:

  1. Go to the Accounting tab and select Chart of Accounts.
  2. Select New. Choose Current Liabilities as your Account Type and Trust Accounts - Liabilities for the Detail Type.
  3. Enter the other details, then Save and close.

Once done, create a service item for the retainer and use the liability account you set up as its income account. Then, use a sales receipt to record the deposit.

 

You can also refer to this link for the detailed steps: Record a retainer or deposit. It'll also show you how to apply it when you record the final sale transaction.

 

Please post again if you need anything else. Wishing you all the best!

View solution in original post

Highlighted
Level 1

How to record payments today for future services and not mess up this month's P&L

thank you very much!