Series

We have several posts here at Begin Coding Now that are on QuickBooks Online that are grouped into Series. Click the previous link to see the list.

QuickBooks Online has an invoice deposit feature. When would you want to use this feature and how do you activate it?

Sometimes when customers pay in advance, they want both a receipt for the deposit they just gave and an invoice for the entire balance of the job right at the start of the job. You activate this feature in QuickBooks Online by first going to the Cog Wheel button. Go to Your Company, Account and Settings. Here below is the screen shot.

After you click Save and Done, invoices will now look like this at the bottom.

With this method, you have to create the invoice for the whole entire job on the day that you receive the deposit or down payment. You can give the client the invoice as proof of payment for the deposit. It will show the decrease for the deposit and the remaining balance.

1. create the invoice for the whole entire job on the day that you receive the deposit or down payment.
2. You record the amount received in the field for deposit. QuickBooks online will deduct the amount of the deposit field from the total.
3. You give the client the invoice as proof of payment for the deposit.

GAAP

Generally Accepted Accounting Principles (GAAP) require that companies record income when it’s earned, not when cash is received. But here we recorded an invoice before the work was even started! This deposit feature also records the balance owed before the job is done. Our AR went up. So, if you must report your formal financial statements and they have to be reported after receiving the deposit, but before completing the job, then you will need to make a normal accountant adjustment, which is usually done by a journal entry. You will need to decrease your income and decrease your accounts receivable.