Customer Payments and a Liability Account in QB Enterprise

I've got you covered, trocky. I'm here to help you map and record the deposits to a liability account.

In QuickBooks Desktop, you'll need to set up a current liability account before accepting upfront deposits. To do that:

1. Go to Lists and select Chart of Accounts.
2. In the Chart of Accounts window, right-click and select New from the pop-up menu.
3. Select Other Current Liability as the account Type.
4. Enter a name for the account in the Name field.

• Note: You should set up the account with a zero opening balance unless you are tracking existing upfront deposits or retainers.

      5. Select Ok.

Then, let's create an item to use when recording upfront deposits or retainers. Here's how:

1. Select Item List from the Lists menu.
2. In the Item List window, right-click and select New from the pop-up menu.
3. From the Type drop-down, select the purpose of the deposits you collect.
4. You can select Service if you collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.
5. Enter a name for the item (for example Upfront Deposit) in the Item Name/Number field.
6. Select the Upfront Deposit liability account you created from the Account drop-down list.
7. Select Ok.

Once done, let's create an invoice when receiving retainers or upfront deposits for a product or service. Then, apply them as payments on the invoice. Here's how:

1. On the Customers menu, select Create Invoices.
2. Select the customer or job from the Customer: Job drop-down list.
3. Enter relevant information such as the Date, Invoice #, Bill to/Sold to, and Terms in the appropriate fields on the form.
4. In the Detail section, select the items (products or services) to include in the sale.
5. Select Save and close.

To guide you further with the steps when applying these deposits as payments on the invoice, you may refer to this article: Manage upfront deposits or retainers.

Moreover, you can add other customizations to your reports to narrow down specific data when running them.

You're always welcome to reply in the comments below if you need additional assistance managing deposits. We'll gladly help you further. Take care!

Can you please clarify - will i be able to receive a payment if I do it this way or do I still need to add a line item as the retainer?

Hey Trocky,

Thanks for reaching back out.  Yes, you are correct! Once the line item is added you will be able to receive payment.  Please let me know if you need further help! Take care for now.