We are a small contracting company that creates estimates for customers using QuickBooks. On the estimates, we list a payment schedule of 30% before the start of the job, 30% halfway through, and 40% upon completion.
How do I handle those two 30% advance payments? From what I understand, I first need an 'Other Current Liability' account. So I created one called 'Customer Deposits'.
Next, I read I need to create an item tied to that account. But what item type should I use?? Service, Other Charge, or Payment? (see attached image). My mind tells me it should be 'payment', but I'm not sure.
From there I know I then need to make a sales receipt with the deposit item and the amount equal to the deposit.
Do I do this same procedure for additional pre-invoice deposits? In the past we have also had some customers who had different payment schedules, such as 20%, 20%, 20%, 20%, 20%. So four separate 20% payments during the job and an invoice for the remaining 20% after completion.
Thank you!
