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Buy nowI know some steps for you to record the deposits for jobs that will be done in the future, Jim.
In QuickBooks Online (QBO), you can set up a deposit or retainer if you have a job that will be done in the future. This serves as a liability account that can be converted into an income account once you receive the payment.
Step 1: Create a liability account
Step 2: Create a retainer item
Step 3: (Optional) Create a trust liability bank account
If you keep the money from customer retainers and deposit it in a separate trust account, you can repeat step 1. Ensure that you enter a different name as you create it.
Step 4: Create an invoice for deposits or retainers
Please know that if you're using a cash basis report, it will not reflect the deposit/retainer as received until it is paid in full. You can reach out to your accountant regarding this.
Step 5: Turn retainers into credits on invoices
If you charge a customer for the services you've provided for them, you can turn the retainer or deposit into credit on an invoice and receive it like a payment. Ensure that the retainer amount is not greater than the invoice total. Please know that a negative total is not acceptable.
For more detailed steps, you can refer to this article since it consists of a lot of steps and information that can help you more when it comes to retainer or deposits: Record a retainer or deposit.
Additionally, you can also run a report and customize them according to your needs.
Let me know if you need further assistance with retainer, and I'll be glad to help you in any way possible.
Cash basis taxpayers don't have unearned revenue. A deposit for a job is income when received. You can set up a service item for the deposit mapped to an income account and then apply that item as a negative amount on the future invoice(s) to reduce the amount due. That will properly record the deposit as income when received, the full amount of income on future invoices, and you won't need to worry that you aren't reporting deposits received as income at year-end.
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