Customer Deposits in Quickbooks

Any non-Tax accounting topics go here.
#1
Posts:
2772
Joined:
22-Apr-2014 1:34pm
Location:
North Carolina
Client is changing software, moving to QuickBooks. They get large customer deposits before they order merchandise for customer. If they post the deposit in the "receive payment" window, it correctly post to A/R, giving them a credit balance.
Once the merchandise comes in and it is delivered and installed, the total sale and A/R are recorded. However, because of the large deposits, the A/R always has a credit balance, which is deceiving.

We think it would be better to post deposits to a liability account called "customer deposits." However, we cannot find a way to get the deposits to credit the accounts receivable account when billed, other than by a journal entry. Does anyone know if these two accounts can somehow be linked to each other, so that the deposits are shown on the customer accounts? The journal entry is easy to miss with the number of customers they have.
 

#2
Posts:
2468
Joined:
24-Apr-2014 7:54am
Location:
Wisconsin
Seaside CPA wrote:We think it would be better to post deposits to a liability account called "customer deposits." However, we cannot find a way to get the deposits to credit the accounts receivable account when billed, other than by a journal entry. Does anyone know if these two accounts can somehow be linked to each other, so that the deposits are shown on the customer accounts? The journal entry is easy to miss with the number of customers they have.


I would consider creating an extra item on the invoice linked to the Customer Deposits Liability account. The invoice entry would have two items, line 1 being the item being sold and line 2 being a negative number to record the previous customer deposit. The problem with this method is that it is tough to reconcile your customer deposits liability account, and you have the issue with missing the entry.

I don't believe QB allows you to handle customer deposits properly, and it doesn't allow your A/R account to be out of balance with the aging report.
 

#3
makbo  
Posts:
6840
Joined:
23-Apr-2014 3:44pm
Location:
In The Counting House
The QB built-in help (desktop) has a pretty thorough explanation of how to do this, including a few alternative methods. Search for "Handle upfront deposits or retainers".
 

#4
Posts:
2772
Joined:
22-Apr-2014 1:34pm
Location:
North Carolina
Thanks to you both! Using the above to search helped. I evidently put in the wrong words when I was looking. We were trying to get the extra item on the invoice, and simultaneously reduce customer deposits. I think with these detailed instructions, we can do it.
 

#5
Posts:
15
Joined:
1-Nov-2016 8:31pm
Location:
Florida
The following is a link to a YouTube tutorial video I published demonstrating how I account for customer deposits in QuickBooks online. I don't know if you are using the Online or Desktop versions, but the process is basically the same. I made the video a while ago so I forgot whether or not I show this, but you can also create a detailed report showing open deposits by customer. I hope this helps!

https://www.youtube.com/watch?v=5bH6wLhcmMM
 


Return to General Accounting



Who is online

Users browsing this forum: No registered users and 17 guests