Hello guys,i have an agent who receives deposits on behalf our clients.The agent then writes us a cheque less his commission.

Hello there, @Murage. Let me help you record the transaction so it will appear in your current liabilities in QuickBooks.

You'll want to set up a retainer process and create a retainer item. A retainer doesn't belong to you until it's used to pay for services. When you invoice the customer and receive payment against it, you'll turn that liability into income.

First, create a liability account to track the number of retainers.

1. Go to the Accounting menu and select Chart of Accounts.
2. Click New.
3. Select the Account type as Liability as well as the detailed type.
4. Enter all the needed information.
5. Click Save and Close.

Then, create a retainer item. Here's how:

1. Go to the Sales menu and select Products and Services.
2. Select New.
3. From the Product/Service information panel, select Service.
4. Enter a name for the new product or service item (for example, Retainer).
5. From the Income account ▼ dropdown menu, select the liability account created in Step 1.
6. Select Save and Close.

To know more about this process, you can scan through this article: Record a retainer or deposit. It contains steps on how to manage these transactions as well as track them in QuickBooks Online.

Also, I'll be adding these articles that will help you make deposits and reconcile your account in QuickBooks:

• Record and make bank deposits in QuickBooks Online
• Reconcile an account in QuickBooks Online

If there's anything else that I can help you with, please let me know in the comments. I'll be here to lend a hand.

Thank you for your quick response, really appreciated.

Well after all this, the customer pays the final amount to us once the service is provided.So,how do i distributed this deposits from the agent to the individual customers so that it can reduce the invoice amount, once i invoice them upon delivering the service?

Great to see you again, @Murage. Thanks for coming back to the thread and making a follow-up. I'll conform with others and share insights to help you handle these deposits.

You'll want to utilize QuickBooks Online's progress invoicing. It lets you split an estimate into as many invoices as equivalent to your customers. 

First, ensure that your progress invoicing is on. Then there are the steps to create an estimate.

1. Select + New and then Estimate
2. Select your customer.
3. Fill out the rest of the estimate.
4. Select Save and New, Save and Close, or Save and Send.

You can then proceed to create a progress invoice from the created estimate:

1. Go to Accounting, select Transactions, then choose All Sales (Take me there).
2. Find the estimate on the list.
3. Select Create Invoice from the Action column. You can also open the estimate and select Create Invoice.
4. Decide how much you want to invoice for, then select Create Invoice. You can charge for a percentage or a specific amount. If you choose Custom amount for each line, enter a specific amount for each item on the invoice.
5. Fill out the rest of the invoice.
6. Select Save and New, Save and Share link, Save & Share (WhatsApp), or Save and Close.

For detailed information, refer to this article: Set up and send progress invoices in QuickBooks Online.

After that, you'll create an invoice and apply the retainer as a credit to it. Here's how:

1. Go to + New.
2. Select Invoice.
3. Choose the Customer name from the dropdown list.
4. In the Product/Service column, select the Retainer or Deposit item you set up.
5. Enter the amount received for the retainer or deposit in the Rate or Amount column.
6. Select Save and Close.

You may refer to this article for the detailed process: Record a retainer or deposit.

Furthermore, I'll share this text as a resource if you want to understand how to amend and remove sales tax payments in the tax center: Manage sales tax payments in QuickBooks Online.

For additional QuickBooks-related concerns, don't hesitate to post them here in the Community. We're always available and willing to lend a hand to your queries. Have a great day ahead.