Undeposited funds account with co-funding deductions

Thanks for posting in the Community, @Lokitha.

You can create a trust liability account in QuickBooks Online (QBO) and treat it as the co-founding bank. Then, enter an invoice for deposit or retainers for that account. This increases the amount in your liability account to show that the money isn't truly yours yet, and to avoid treating it as income until later.

To create a trust liability account, here's how:

1. In QBO, go to the Accounting menu at the left pane to get to the Chart of Accounts.
2. Click New at the upper right.
3. In the Account Type drop-down, pick Other Current liabilities.
4. In the Detail Type drop-down, select Trust Accounts- Liabilities.
5. Enter a Name for the account or accept the suggested name.
6. Choose an option from the When do you want to start tracking your finances from this account in QuickBooks? dropdown list.
7. Select a Default Tax Code and enter an Unpaid balance and as of date.
8. Hit Save and close.

After that, you need to create a retainer item. Please refer to these steps:

1. Go to the Sales menu at the left pane to get to the Products and Services page.
2. Click New at the upper right.
3. In the Product/Service, select Service.
4. Enter a name for the new product or service item.
5. In the Income account drop-down menu, pick Trust Liability Account.
6. Hit Save and close.

Once done, you can now enter an invoice for deposits or retainers. Check out this article and proceed to step 4 for further guidance: Record a retainer or deposit.

You may also consult your accountant for other options on how to go about the process.

Please let me know if you have any additional questions in the comment section below. I'm more than willing to assist. Have a good one!