How to record current liability from monthly income at a church

We appreciate the detailed information about your concern, Big Dave.

Based on what you said, it seems that you want to know the exact way on how to set up and use an upfront deposits or retainers. Here's the process that we can take:

1. Set up an account for upfront deposits or retainers
2. Create an upfront item 
3. Record the upfront deposits you receive
4. Create invoices or bills
5. Apply the upfront deposits to the invoices or bills

The detailed instructions for every steps are laid out in this article: Manage upfront deposits or retainers.

If you're unsure whether which options is applicable to your scenario, I'd recommend reaching out to your accountant. They can provide you more ideas on how you can record them in QuickBooks.

Please let me know if you need assistance in any of the steps provided in the article. Have a great day!

@Big Dave you cannot have it both ways. Money in cannot be both income and liability. It can be income but when you disperse the funds it would be an expense. Or it is a liability that is reduced when you pay it out.

Rather than invoices as suggested by @JamesDuanT you may instead need to think about your partner organizations as vendors and create a bill (to be paid) for the current week/month collection that will be dispersed next week/month. By entering a bill it creates a liability in Accounts Payable, which will then show up even in an accrual balance sheet (under accrual rules the expense will post when the bill is created but under cash rules the expense will not occur until the check is written)

Thanks for the replies and advice, gentlemen.  I will try it both ways to see which way works best for the monthly reports I prepare for our officers and directors.    We do use cash accounting rather than accrual, so I don't know how the difference impacts the standard P&L and Balance Sheet reports I pull without customized modifications from Quickbooks.

Anyone else have other thoughts?

Hi there, Big Dave.

Just following up with you. With QuickBooks you can view reports based off either accounting method.

For instance with accrual the time when you enter a transaction and the time when you actually pay or receive cash can be two separate events, but the reports will show income regardless if you've been paid yet. It takes into account what income will be coming in at later time. 

Versus cash where you only show income or expenses that you actually received. You can view more on both of these methods and which work for you by viewing these articles below:

• Differentiate Cash and Accrual Basis
• Cash vs Accrual: Whats best for your business.

We here in the QuickBooks Community are always available to help. Please don't hesitate to reach out if you have any other questions. Have a great day.