To clarify, are you referring to the Deposit to field in the Receive Payment page? When receiving an invoice payment, the Deposit to drop-down list is where you select the account you put the payment into. You can put the money directly into an account, like your checking account. You can also select Undeposited funds if you need to group the payment with others. This account holds everything before you record the deposit.
How do I change the account tied to the deposit field in the invoice screen? Mine is currently posting directly to my checking account, but it should be deposit liability
No, I am not referring to the receive payments area. In the invoice screen, after billing out all the sales items, there is the subtotal, sales tax, and then deposit field. This deposit field we have been using to input pre-payments (or deposits) received so it's clear to the customer that their deposit was applied. When the invoice is saved, the amount listed in the deposit field is recorded automatically as a deposit into checking. This should be hitting the liability account "Deposits from Customers". Where do I go to change this setting?
You'll need to turn off the Automatically apply credits option in QuickBooks Online, so your customer's advance payment will not be applied to the current invoices.
The Automatically apply credits feature is the reason why invoices are showing as paid since any credit on the same customer will be used to their open invoices.
To turn it off:
Select the Gear icon.
Click Account and Settings.
Tap on Advanced on the left of the screen.
Click the Pencil icon in Automation.
make sure to disable the Automatically apply credits option.
Click Save and select Done.
Once done, we can now delete the payment that was associated with the invoice. This way, the invoice will be marked as unpaid, and you can apply the appropriate payment then deposit it to the right account afterward.
Open your customers invoice and double click it.
On the Payment Status section, click the 1 payment link and tap on the Date hyperlink.