Deposits from clients before Invoice

scasey1 · ‎July 18, 2022

I am having challenges with accepting payments in QB Desktop 22. My clients provide deposits on equipment purchase. We write them up on a Purchase Order which is outside of QB. They provide a deposit and we start to manufacture the equipment. This process takes up to 90 days. We send them a balance form (again outside of QB) and they pay their balance and shipping. We will invoice the clients after we have received final payment. We do this invoicing when we record the final payment deposit. Here is where I require some help;

1. The initial deposits are made be either credit card (outside of QB) or direct bank transfer. We record these deposits in "undeposited funds" sometimes individually or in group deposits for that day.

2. The balances payments are again recorded during bank reconcile and we generate QB Invoices at this point.

The Problems:
I am having a problem with the "undeposited funds". I have created a Chart Line 1201 for Undeposited funds and I use this when recording the deposit. I then go to receive payment from the client which then allows me to apply the payments to the invoice. However, the payments are not always recognized. Sometimes The Payment and the Deposit are showing when I bank reconcile which means that I am making double deposit entries.

I would appreciate some advice on how to handle these deposits before an invoice is generated and how to properly use undeposited funds and receive payments to correctly record the deposit one time. I am missing something fundamental here but cannot find answers.

BigRedConsulting · ‎July 18, 2022

Probably a better way to handle this is to use the Receive Payments feature when recording the customer deposit on account. Then record a Deposit transaction and include the Payment(s) in it.

Later, when you create the invoice, edit the payment and apply it to the invoice.

OR, you could create the invoice first and give it a date in the future when you expect the work be invoiced, and then receive the payment against that invoice. Then later edit and update/finalize the invoice and then print it/send it to the customer.

scasey1 · ‎July 18, 2022

Thanks for your reply and you assistance.

I apologize but I still not quite clear on your suggestion. Here is confusion;

1. Use receive payments when customer places a deposit for goods purchase.

As I understand - I would use "receive payments". create the new customer info at this point and receive the payment.

What account do I receive this payment under? Undeposited funds? Or Accounts Receivable? or?

A couple months later I will receive the balance payment. I will then record this payment under "receive payments"?

and then record the deposit? I am very unclear on the relationship between receive payments and record deposits?

The result for me has been duplicate payments and deposits showing up when I reconcile.

As for creating invoices when I receive the deposits - I want to avoid this as I would then create a sales tax liability 2 months before I receive payment from client. These are lager orders and sales tax could me more than or a substantial portion of the deposit received.

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Deposits from clients before Invoice

Deposits from clients before Invoice

Deposits from clients before Invoice

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