How do I map the deposit field that shows on invoices to a liability account? The option is found on the Sales Form Content screen. It currently posts to cash.

Hello there, @svieira.

Welcome and thank you for dropping a post here in the Community page.

Allow me to share some information about deposits in QuickBooks Online (QBO).

If you're referring to receiving the payment to the invoices created and depositing it to a specific bank account. We don't have the option to choose a liability account under the Deposit to field. However, we can only choose to either Bank or Other Current Assets. You can check this here:

1. Go to the Plus (+) icon.
2. Select Receive Payment.
3. Select a customer.
4. Click the Deposit to drop-down menu.
5. You can only select to either bank or other current assets.
6. If you wish to add a new account, click Add new. The option under Account Type is only Bank or Other Current Assets.

However, don't hesitate to let me know if you're referring to something else by adding a comment below. Have a good day!

I have this same question.  Unfortunately, the answer above is not the solution. 

Does anyone out there know how to map the "Deposit" box on a Sales Invoice to a the appropriate "Customer Deposit" Liability Account?

Thanks!

@svieira

Hi Rustler, thanks for your swift reply. 

I agree that deposits do not pay down liabilities.  In our case, for example, a customer pays us $25k up-front for equipment that is delivered 2-months later.  There is clear language in our estimates that states if equipment is not delivered, we must return the deposit.  Therefore:

1)  Creating the invoice for a deposit inflates our income for the month because we are not recognizing the COGS, even as we map the deposit to a liability. 

2) Our preference is to create an invoice when the equipment has been delivered. 

3) When we do create the invoice, I want to apply the advanced deposit (recorded as a Sales Receipt mapped to the Customer Deposit liability account). However, QBO does not have "Customer Deposit" as a payment method. 

I also prefer not to enter the customer deposit as a negative on the Invoice because then the INvoice shows as $0.  We want to see the true amount.  

Following these steps (to invoice ONLY when equipment is delivered (dropshipped) by our vendor and paid for by us allows to properly match the sales and the COGS for accurate reporting analysis.  

Am I over-reaching here?  Is this even possible in QBO? Thanks!

"Re: How do I map the deposit field that shows on invoices to a liability account? "

You can't. Deposit field on invoice form is Intuit hard-wired to receiving a partial payment on that invoice. It's more like pre-payment field than a typical deposit type if you want to set up as a liability account.

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@ellichristina wrote:

Hi Rustler, thanks for your swift reply. 

 

I agree that deposits do not pay down liabilities.  In our case, for example, a customer pays us $25k up-front for equipment that is delivered 2-months later.  There is clear language in our estimates that states if equipment is not delivered, we must return the deposit.  Therefore:

 

1)  Creating the invoice for a deposit inflates our income for the month because we are not recognizing the COGS, even as we map the deposit to a liability. 

 

Create a service item named deposit and link it to a liability account, use that on the invoice or sales receipt.  That will post the amount to the liability account and the funds can then be deposited with no effect on income.

 

2) Our preference is to create an invoice when the equipment has been delivered. 

 

Yes of course, you list the items being delivered, at full price, each item posts to an income account.  As the last item you use the deposit item, set the qty to negative one, and enter the deposit amount.  the customer pays the balance due.  Using the deposit item that way zero's out the liability account and posts that amount to income.

 

I also prefer not to enter the customer deposit as a negative on the Invoice because then the INvoice shows as $0.  We want to see the true amount.  

 

Does not apply when doing it the way I suggest - unless the deposit amount = sales amount

 

 

 

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Can you tell me where QBO puts the deposit when it is recorded in the 'deposit' box of the invoice? I have created a test invoice with a deposit deducted from this box and don't see the total in undeposited funds. Where does it put it? Is it a posting transaction or not? 

Thanks in advance.

Dawn

Thanks for joining the Community, Dawn.

I'm here to help you in determining why your deposit isn't showing in Undeposited Funds. One of the possible reasons why payments that have been entered into Undeposited Funds will not appear on the Deposit page is that payments have already been deposited directly to your bank. Let's verify if this is the case:

1. From the Accounting menu, select Chart of Accounts.
2. Locate the Undeposited Funds account and select View register in the Action column.
3. Click on a Customer Payment that isn't appearing and select Edit.
4. Check in the top left of the screen to see if it has a linked transaction. If it is, you can click the blue link to see it.

I would also recommend checking the setup of your Undeposited Funds account. The Account Type needs to be Other Current Assets and the Detail Type should be Undeposited Funds.

I'm including this article on how to use the undeposited funds account to receive payments in QBO for your guide.

I've also added this link about recording and making deposits in QBO for your reference.

Feel free to leave a comment below if you have any other questions. I'm always here to help.

Please read the thread to which I am commenting.  What I am trying to discover is where the money goes when you use the "deposit" box on an invoice.  It doesn't go to the undeposited funds account. In fact, I adjusted a few for a client where I deleted the previously recorded total in the "deposit" box of the invoice and created a line item instead to offset some deposit liabilities as mentioned above and there was no change to my P&L report.  

Where do the client deposits for services go once you record them to the invoice using the "deposits" box on the invoice? Is this a non-posting account?

I appreciate that you take the time to read the previous posts, @DawnK.

Allow me to explain it briefly, undeposited funds is a place to hold funds. P&L report is a profit and loss, this is why it is not yet counted as expense or income since it is not yet deposited to the bank. If you want to see the undeposited funds you can run a balance sheet report.

Let me guide you how:

1. On the left navigation pane, click on Reports.
2. On the Find report by name box, type in Balance sheet.
3. It will give you the options related to Balance sheet.

You can also create a report of your total Undeposited Funds.

I'm glad to help you further if you have additional questions, take care!

Wow, you guys are amazing.  I understand accounting perfectly well.  Here is the question I have for you, for the 3rd time.  Let's see if you can actually try to answer it this time...

If a client uses the 'deposit' box on an invoice instead of deducting a deposit as a line item where does the 'deposit' get recorded? 

For background here is what has been discovered so far...

1) There is no record of it in undeposited funds so it isn't posting there.  2) Removing it does not change the P&L in any way so it is not posting directly to an income account.  3) It is also not posting directly to the bank account.  

Since this is a QBO created account can you please tell me where I can see it on a report.  What account is it suppose to be posting to?   

Sincerely,

Dawn

Hi there, DawnK,

The default invoice template in QuickBooks Online (QBO) doesn't have a "Deposit" box.

The box may have been added as a custom field in the form. This will not affect any of your records, such as reports and bank accounts. It only tracks the information that matters most to you and your customers. See the screenshots attached below for your visual guide.

When you record the customer payment, the bank from the Deposit to field is where the funds go.

You need to open the account where it was deposited to. That's the one you'll pull up on your register.

I've added these articles for additional information about custom fields and recording payments:

• How to add custom fields to invoices 
• Record invoice payments in QuickBooks Online .

Let me know if you have follow-up questions, and I'm always around to help you out.

I can clearly see Dawn K's frustrations. 

All the responses from QBO staff and yet noone has answered her question. AND no the customizable field is not what she is referring to... see attached. 

In account settings>Sales> there is a Deposit toggle field that will activate a deposit box at the bottom of a sales invoice in which you can enter an amount and the total invoice will be reduced. 

Where does this money go? Is this field just for looks?

I'm here to sort things out with you, jenniejadin. 

The Deposit field on the Invoice page will reduce the total invoice. The deposit is placed in the Undeposited Funds account in which it has not been associated to the actual account yet. We'll have to create a Bank deposit to do that. 

Let me show you how:

1. We can create an invoice or open the existing one. 
2. Enter the invoice's information and an amount on the Deposit field. 
3. You'll see that the invoice Balance Due is reduced by the deposit amount. 
4. Then, click Save and close. 

Let's create a bank deposit to put the funds into the actual bank. 

1. Go to the +New button.
2. Click Bank deposit.
3. Select the correct the bank for the deposit.
4. You'll see that under the Select the payment included in this deposit there's an invoice (deposit) amount.
5. Select on it and click Save and close. 

If you need more help, you can always leave a reply. Take care always!

I just got off the phone with Quickbooks support and was able to solve the problem.

By using the deposit field on the invoice, QBO will automatically record the deposit as a deposit into the bank account you've selected.

To see the details you can click at the bottom of the invoice More > Transaction Journal and from there you can see exactly which accounts were debited and credited.

As long as you selected the correct bank account that the deposit was made to, there's nothing else to do to record the payment other than when you take the final payment for the remaining balance.

This post is years old and not one single person has been able to answer the question.  Here we are and the problem still exists.  This is one of the most frustrating things about Quickbooks Customer Service is they don't actually know what they are doing nor do they really read posters questions...ever.

I have the same problem as the original poster. ... When using the deposit "box", that is when you have turned the "deposit" box toggle on and input a number into it, the question was where does the deposit go? If an employee reads this... we are not talking about payments, we are not talking about undeposited funds, or a custom field on the invoice/sales receipt.  We are talking about QB feature that can be turned on and off that allows an invoice/sales receipt to be reduced without an actual payment being made and without an associated service/line item.

To further clarify, in my situation, I see where the amount put in the "deposit box" is going.  It is somehow increasing the Bank Accounts heading... a non-existent account.  So, a clarifying question might be how do you change the account the money placed in the deposit box goes to? It does not go to undeposited funds.  If it does, then in my case, and I'm guessing the original poster's question it has been changed so how did that happen?

Thanks for getting in touch with the Community, dswazes.

You can change the account your money's placed into by using the Deposit to drop-down list.

Here's how:

1. Create a new invoice/sales receipt or access an existing one.
2. Enter the necessary details.
3. In your Deposit to drop-down, choose an account you'd like the funds to be placed into. If you need to create a new account, click Add new.
4. When you're finished, select Save and close.

I've additionally included a detailed resource about using your Undeposited Funds account which may come in handy moving forward: Deposit payments into the Undeposited Funds account

Please don't hesitate to send a reply if there's any questions. Enjoy the rest of your day!

@ZackE Your response is insufficient and doesn't answer the original poster or anyone else's questions.

@DawnK @svieira  Hi, I am a bookkeeper and I am sorry that you have had so much trouble with all of this. My response may come too late but perhaps someone else will search and this will help.

I will try to keep this as short as possible.  This is related to those who have toggled on the Deposit feature in the Account and Settings and want to use it to reduce an invoice by an amount already received in advance.  Between this and the other post, someone was saying that they were receiving an error to select an account to deposit to but couldn't see it.  The "deposit to" is shown in the center of the Invoice screen once you enter an amount into the deposit box and tab out of the box.  If you don't enter an amount and tab out, or remove the amount from the box the deposit to (which also includes a payment method and reference number) will disappear.

Ok, so that is how to enter it.  Now comes the bigger issue.  When you receive money in advance from your client you post it to a liability because you owe your service or product to them at some point in the future.  It is not income until you have earned it.  Then when you reduce the invoice (which is your earned income) by putting the amount you previously received in the box you need that amount to offset the liability (or to the account the original money was posted to; even though anything other than a liability is not the right way to do it from an accounting perspective).  The problem is that QB only allows you to use Asset account to deposit to not another account (again it should be liability).  This is an error on QB part.  So the workaround for now:

1. Create a liability account called Customer Deposits (or whatever name works for you). 
2. Create another asset account called something similar... I might use Customer Deposit Temp.
3. When you receive the original amount deposit it to the Customer Deposits liability (if you invoice for this make sure your item maps it to the liability account).
4. When you use the deposit, in the deposit box, deposit it to the temp asset account.
5. Then create a Journal Entry.  Your first line will be the Liability account and the amount will go to the Debit side (debits first).  The second line will be the temp account and the amount will go to the Credit side.  This journal entry will move the money from the asset account and offset your liability.  Eash persons books are slightly different so the deposit received may be more than you are using on a particular invoice.  Always journal the amount you used in the invoice so that you 0 out the temp account right away.

Please feel free to reach out to me if I can help.  

@dswazes Thank you!  I asked this question so long ago that I had forgotten all about it.  When I didn't receive an answer to my question, I created some sort of work around for the client.  As it turns out, this client is no longer in business, so I can't even go back and see what I did.  However, I appreciate the information you provided and will save this in case I come across this situation in the future!

This is just a great example of how QBO is more interest in selling apps and services than they are addressing improvement in the functionality of the program.  If they can't quickly monetize it, then it goes to the bottom of the list.  This is a major issue that they still have not fixed.  Everyone takes deposits, we all know how they need to stay as a liability until delivered and then properly applied.  Why can't they address this simplistic issue!?  HEY INTUIT!  Stop trying to sell me on 3% early payment features and fix a problem that all of us have to pay people on a wasted "work around" for every time.  Then maybe we can take the benefit and savings from our increased productivity and buy some more of your services!  If you don't make us waste money, we have more money to spend!  Simple accounting.    I give you guys 90 days to fix this and if not I am jumping over to Xero Accounting System.  For the money we pay you, you should be much more attentive to what we need, instead of what you think you can sell us more of!

I've been doing journal entries this entire time for Retainers and not using the Deposit field, but when I'm doing 150-200 invoices at a time, doing that many journal entries just plain sucks.  Sorry, there is no other word for it.  For what we pay for this system every year, there should be viable process for recording, processing, and reporting retainers that works and doesn't take hours of our time to maintain.  Is it really that much to ask for?

C

Hi @dswazes.  Thank you so much for your detailed instructions on how to work around this issue.  One thing that I am still not clear on: when I enter an value into the deposit cell I get the error message "You need to specify an account to credit the deposit to".  I can't find anywhere that allows me to map that cell to a GL Account.

Thanks in advance for your help!

""You need to specify an account to credit the deposit to".  I can't find anywhere that allows me to map that cell to a GL Account."

I agree, There is no drop down box on the invoice deposit field to select an account.

Hi ecocpa,

I'm here to ensure you can enter the invoice payment into the correct account.

There are times that an issue like this occurs when QuickBooks encounters unexpected browser-related crashes. To resolve it, log into your account on an incognito window. Here is a list of keyboard shortcuts to open one:

• For Google Chrome: Ctrl + Shift + N
• For Mozilla Firefox: Ctrl + Shift + P
• For Microsoft Edge: Ctrl + Shift + P
• For Safari: ⌘+ Shift + N

If it works, you can go back to a regular browser and clear its cache. Piled browser history can be the reason for some issues on the page. You may also switch to a different browser like Google Chrome, Mozilla Firefox, Safari, or Microsoft Edge.

For more resources in making deposits, you can check this reference: Record and make bank deposits.

I'll be around whenever you have questions about recording transactions.