Customer Deposits on Sales Orders

Can anyone tell me how to handle deposits on sales orders to show a sales order balance after applying a deposit?  

When you receive the deposit, find the Open Sales Order and select your Customer Deposit item.  on that line, enter the deposit amount as a negative.  Thats it!  You can add the subtotal item to the SO to get balance owed, or the total at the bottom of the SO will have the same balance due figure.

This method causes problems.

The first problem is that it reduces the value of the total sales order in the list of sales orders.  A $1000 sale with a $500 negative "deposit item" reduces the value of the order by $500 and then the list of orders shows a $500 order with a $500 balance when it's actually a $1000 order with a $500 deposit.

The second problem is that the deposit doesn't actually hit its associated account until the sales order is invoiced.  This is unacceptable when recording customer deposits.  There is no way at this point to validate or verify that a custom has a deposit on their account, and there's no accounting of that deposit.

Is there a way to attach a payment to a customer account and then use that deposit on the account towards an invoice while also keeping a reference to the order which the deposit is intended to be applied?

Hi, it's a pleasure to have you in the Community today. I've got you covered, and let's work this out so you can complete your tasks in QuickBooks Desktop (QBDT).

Before we do so, can you tell me more about your concern? Are you trying to process customer payments? What are you trying to do when you say "attach a payment to a customer account and then use that deposit on the account towards an invoice while also keeping a reference to the order in which the deposit is intended to be applied?" This way, I can provide you with the most accurate resolution to your query.

You may also attach screenshots as well so we can have a better picture of your concern.

Additionally, I'm adding this article as your guide in recording customer transactions: Get started with customer transaction workflows in QuickBooks Desktop.

The Community is rooting for your reply. Take care and have a good one!

When we create an order, it's for custom clothing which will be manufactured.  We take a 50% deposit up front.  We have limited choices because we are unable to tie a deposit (i.e. credit memo) to a specific sales order.  

The correct action is to receive a payment from a customer so it hits the Undeposited Funds account and is reflected as a negative on the Accounts Receivable, and therefore recorded as a deposit to the customer.

The problem is that we can only record that to the customer's account as a credit memo, not to the sales order, and there's no way to connect the two together.

If we use the hack, which is creating a "deposit item" then we have no accounting record of that money, only a "note" on an open sales order.  Until we invoice the order, which won't happen often for a few months, that money sits in limbo, and we are liable for it if there's a problem.

It used to be that you could receive payment and create an overpayment to be applied later. When you would create an invoice you could click on apply credits and it would give the option to apply it. That very simple way of doing it (which I had been doing for over a decade) came to an end when I updated in 2020. I spent hours trying to figure it out and did a remote with a tech for several more hours. Long story was after getting higher up with techs it was a known problem that supposedly was going to receive a patch. It never has, which is ridiculous. Here's a link to that saga-

https://quickbooks.intuit.com/learn-support/en-us/payments/applying-credits-to-invoices/00/805547

Thank you for getting back and providing us with more details about your concern, @arretx.

You can record it in QuickBooks Desktop as upfront deposits or retainers. Then, you can apply this deposit to your invoices. 

To create a liability account:

1. Go to the Lists menu and click on Chart of Accounts.
2. Click on New from the pop-up menu.
3. Select Other Current Liability as the Account Type.
4. Set an account name.
5. Click on Ok.

To create an upfront deposit item:

1. Go to the Lists menu and click on Item List.
2. In the Item List window, right-click and select New from the pop-up menu.
3. From the Type dropdown menu, 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. Set a name. 
6. Select the Upfront Deposit liability account you created from the Account drop-down list.
7. Click on Ok.

Here's how to record upfront deposits or retainers you receive: 

1. From the Customers menu, select Enter Sales Receipts.
2. From the Customer:Job drop-down list, select the customer or job.
3. If the Deposit To field appears, select the account into which to deposit the funds.
4. Enter all the information needed.
5. Click on Save and close.

For detailed guidance with setting up, recording, and managing upfront deposits, check out this article: Manage upfront deposits or retainers. 

See this article on how to receive payments you receive from your customers in QuickBooks Desktop: Record an invoice payment. 

Let me know if you have further questions about recording your transactions. I'm always here to help. Have a great rest of the day!

The problem is not solved.

There seems to be no provision to attach a set $$$ amount in the form of a customer payment to a specific sales order such that when the sales order is converted to an invoice, it simply uses those funds.

The only way we can get the books to be accurate real-time without a myriad of manual entries is to receive payment and generate a credit memo for use later, which means we have to somehow reference exactly WHAT Sales Order that payment is supposed to be paying for.  This can get messy if the same customer orders two of the same thing on separate sales orders.

What we really need is the ability to create a sales order, send a link to a payment interface to the customer for 50% of the order, let the customer securely enter their CC info, charge the card and automatically attach those monies directly to that order so they can be settled in the future when the order goes to invoice.

Right now, there's just too much margin for error in the process because there's too much manual maintenance required.

We have a very similar issue, difference being that those are Wire Transfers incoming, and we have no way to link the payments with the sourced Estimates or Sales Orders.

In the end, we need to basically do the cross reference manually, and twice - when the money comes in, and then later when we actually invoice the customer, which could be (many) months later. This is very time consuming, and prone to error.

Would be great if there was a way to link a payment (or credit memo) to a Sales Order, so when it's invoiced, it just processes the payment towards invoice, without need for hoops again. And without reducing the value of the Invoice/SO.

Why is this not a feature yet? Or if it is, how on earth can I do it?

I recognize each business has distinct needs.

Currently, we're unable to link a payment or a credit memo to a sales order in QuickBooks Desktop (QBDT). At this time, there's no scheduled date for when this feature will be available in QBDT. While we value your input, it's subject for review and approval by our software engineers.

Having said that, I'll assist you in relaying your feedback to our software engineers directly. This way, they can assess your request and will consider including it in our future product upgrades.

Here's how:

1. Go to the Help menu and select Send Feedback Online.
2. Click the Product Suggestion option.
3. Enter your feature request and select the Send Feedback button.

Additionally, completing sales orders could be an intricate process. Don't worry. QBDT has the Sales Order Fulfillment Worksheet that gives you access to the procedure in one convenient location.

If you have additional concerns about sales orders, please don't hesitate to swing by the Community. We're always available to help. Keep safe!