I have a bit of a unique situation that I was hoping someone else might give me a few ideas on how to address.
I have a client who runs an event venue. When they sign contracts with their customers, they require a deposit of 50% of the total for the rental up front and then collect the remainder two weeks before the event date. The time between the deposit and the final payment varies drastically from a few weeks to a year or two.
Currently, my client uses the Invoice feature in QBO to track amounts owed and paid to date. The problem with this is recognizing income before it's actually income. My client's solution to this was to put the Invoice date (not the due date) as the date the event will happen. This effectively keeps the income out of the P&L and Sales Tax Center until the correct date when the services are rendered.
My question is how can we be doing this better? My first instinct is to put the cash received to date into a Deferred Revenue Account via a Bank Deposit since we're receiving cash before services are rendered (and all deposits are non-refundable, so I wouldn't use a separate Deposits account). However, this would not show the deposit in the transaction list of the customer's profile. Also, my client uses the invoice feature to see how much the customer still owes on a specific event and that wouldn't be tracked when using this method, either.
Using an Invoice and creating a "Deferred Revenue" product/service then places the total for the rental in the Sales Tax Center (even though it's listed as Nontaxable).
I'm at a bit of a loss on how to handle this. I think my best bet is to just use the Bank Deposit approach enter it as Deferred Revenue and skip the invoice since no services are provided until long after the deposit.
