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info461
Level 2

recording customer liability deposits

I am preparing a quarterly GST return. i collect deposits from clients and place them in my liability account. once the work is completed i invoice them and any deposits received show up as a negative number on the invoice (taking them out of the liability account). however, when it comes time to file the taxes those negative numbers bring down my total sales number. how are these recorded to reflect my proper sales.

thanks so much.

 

8 Comments 8
AddieC
QuickBooks Team

recording customer liability deposits

Hello,

 

Thanks for reaching out to us here in the Community! I'd be happy to point you in the right direction to get this sorted out. 

 

Making sure your GST return is correct is so important, as this is an essential part of your business. In cases like these, it's typically best to reach out to our tech support team so that we can take a look at how you've set up your transactions. The resolution is largely going to be based on the way you've entered information.

 

In the meantime, take a look at this article for steps and information regarding recording a deposit or retainer: Record a retainer or deposit. I'd also recommend reaching out to your accountant. If you're not already connected to an accountant, you can find one in your area here: Find a ProAdvisor.

 

I'd suggest reaching out to our team via phone. The phone agents have the ability to remotely share your screen to help you navigate through your account. If you'd prefer getting in touch another way, feel free to do so. 

 

Here's how you can contact us: 

 

Phone: 1-833-317-2226 from Monday to Friday from 9 a.m. to 8 p.m. ET or Saturday from 9 a.m. to 6 p.m. ET

Schedule a Callback: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Get a callback

Social Media: Facebook and Twitter from Monday to Friday between 9 a.m. and 8 p.m. ET

Chat: click (?)Help in the upper right > click Contact Us > explain your situation > click Let's Talk > choose Start a Chat

 

I hope this helps you begin the path towards resolving your issue. If you have any questions, let me know. 

 

Cheers.

ahrehirchuk
Level 1

recording customer liability deposits

I feel that there is an error within Quickbooks Desktop 2020 on this issue.  When we collect a deposit from a customer for a prepaying for working this gets entered as a sales receipt with the item being contract deposit and the tax set to E for Exempt.  This item was setup as a liability account so the transaction shows up on the balance sheet as a liability.  This transaction does not show up on the P&L, however it does show up on line 101 of the Sales Tax Report when filing GST even though it is recorded as exempt.   

Anyone have an thoughts on this?

LauraAB
QuickBooks Team

recording customer liability deposits

Hello ahrehirchuk,

 

Thanks for reaching out about this in regards to QuickBooks Desktop 2020. Like my colleague mentioned to the original poster and their question with QuickBooks Online, it's important to see in these situations how the transactions are recorded in your books to ensure accuracy in your numbers.

 

I've got an article that talks about retainers and deposits in QuickBooks Desktop, which you may have come across before. I encourage you to review what it says and if you're still having trouble, to get in touch with support. Here's the article: Manage upfront deposits or retainers

 

Learn how to get in touch with support by taking a look at the Intuit QuickBooks Desktop software support policies. This outlines not only policies, but also hours and contact options.

 

Have a great rest of your day!

ahrehirchuk1
Level 1

recording customer liability deposits

Hi Laura:

 

I agree with the articles, however when following these steps or other trial ways, it is not recording the GST correctly.

The item has been setup pointing to the liability account with E for GST exempt.  However when you create either a sales receipt or an invoice with that item code, it shows up on the Sales Tax Agency report on Line 101 as revenue.  It's not revenue until an invoice is created with an item code pointing to revenue.  

I've called into the call center and they are only following their manuals and don't understand what the issue is.

 

Thoughts

AL

LauraAB
QuickBooks Team

recording customer liability deposits

Hello again. I appreciate the follow-up on this issue. I do have one other idea as to what may be going on and then I have another avenue of support you can try so a closer look can be taken at this.

 

One important thing to note with sales tax is that there's an hierarchy of which codes are used when. For instance, although you're assigning a E tax code to the item, on the transaction it may be switching if you have a tax code assigned to the customer. Customer preferences trump the item preferences for sales tax. Manually changing the code will trump both of those.

 

If you return to the sales receipt, double-check whether it's still got the E tax code for the item or if it switched to match your customer's sales tax code. If it did, simply manually change the item code to E and you should be good to go.

 

If you're still having trouble, I invite you to reach out via one of our social media channels. Feel free to mention me and this thread so that we're immediately up-to-speed with what's going on. Here are the social media contact options: Facebook and Twitter from Monday to Friday between 9 a.m. and 8 p.m. ET.

 

Give me a shout if you need more help.

info461
Level 2

recording customer liability deposits

What about labeling it as out of scope until the project is invoiced and then Switching it to exempt once completed?(Out of scope keeps it off any reports)

ahrehirchuk1
Level 1

recording customer liability deposits

Out of scope is not an option for desktop Quickbooks, only online version

LWC2020
Level 1

recording customer liability deposits

Hi  ahrehirchuk,

 

Did you ever figure out how to stop the deposit from calculating on the sales tax line 101?  

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