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Von-1
July 17, 2023
Solved

customer invoice item needs to point to a liability account for a depsoit/retainer

  • July 17, 2023
  • 1 reply
  • 0 views

We run a tour company and  require a minimum number of customers on most ocassions to proceed with any given tour. When we invoice an individual client we need to treat the amount received as a liability (deposit) until we have sufficient customers to run the tour. How do I invoice the client but instead of allocating the item as income the item or product/service needs to be a liability,

Best answer by Carneil_C

Thanks for your reply, @Von-1. Let me provide additional information on handling customer refunds in QuickBooks Online.

 

If the invoice has been paid and your customer wants to reduce their current balance immediately, we can utilize the adjustment note. I'll show you how: 

 

  1. Go to + New and select Adjustment note.
  2. From the Customer field, choose the appropriate customer.
  3. Enter the Adjustment Note Date, Amount, GST, and Product/Service (This is the category, product, or service you're getting credit for).
  4. Click Save and Close.

 

Otherwise, here's how you can refund an invoice that your customer has already been fully paid for: 

 

  1. Click + New and select Refund receipt.
  2. Choose the customer you want to refund from the Customer ▼ dropdown.
  3. Enter the details in the fields using the info from the original sale.
  4. Select which payment method and account you wish to refund the customer from.
  5. Tick Save and Close.

 

To learn more about it, please review this handy guide: Handle customer refunds in QuickBooks Online.

 

In case you'd like to send your customer a summary of their invoices, payments, credits, and balances. See the following article for detailed guidance: Create and send customer statements in QuickBooks Online.

 

You can always reply or reach out to us again if you need anything else with transactions in QBO. We're always here to guide and assist you whenever you need help.

1 reply

Adrian_A
Adrian_A
July 17, 2023

We can set up a retainer, Von.

 

The retainer is a liability to show that, although you received the money, it only belongs to you once used to pay for services. I'm here to guide you through the process.

 

First, we'll need to create a liability account to track the amount you received. Here's how:

 

  1. From the Accounting tab, select Chart of accounts.
  2. Click New.
  3. From the Account Type dropdown menu, select Current liabilities.
  4. From the Detail Type dropdown menu, select Client Trust Accounts - Liabilities.
  5. Enter a Name for the account.
  6. Select a Default GST Code, enter an Unpaid balance, and an as of date.
  7. Select Save and Close.

 

Then, let's set up a retainer item:

 

  1. Select Products and services from the Sales tab.
  2. Click New.
  3. From the Product/Service information panel, select Service.
  4. Give it a name.
  5. From the Income account dropdown, select the liability account.
  6. Click Save and close.

 

Afterward, you can create a liability account if you want to keep the money you received in a separate trust account. Lastly, you can create a sales receipt or invoice for the retainer you received. I've added this article for the detailed steps to add an invoice: Step 4. Create a sales receipt or invoice for deposits or retainers.

 

Also, if you use an external platform to process payments, you can keep track of those payments in QuickBooks. Here's an article for reference: Record invoice payments in QuickBooks Online.

 

I'm always around whenever you have concerns about recording a retainer.

V
Von-1Author
July 17, 2023

Thanks for the repsonse Adrian_A.  I had already followed those instructions to record a retainer or deposit and everything now appears to be correct in the chart of accounts, balance sheet and profit/loss reports.

If the tour has insufficent numbers to proceed how do I refund the payment received which is being held in a liability account? I have read the article on how to handle customer refunds in QBO but I am confused whether  we should use an adjustment note or a refund receipt? The invoice is fully paid and we are using Simple Start QBO on a cash basis.

C
Carneil_CAnswer
July 17, 2023

Thanks for your reply, @Von-1. Let me provide additional information on handling customer refunds in QuickBooks Online.

 

If the invoice has been paid and your customer wants to reduce their current balance immediately, we can utilize the adjustment note. I'll show you how: 

 

  1. Go to + New and select Adjustment note.
  2. From the Customer field, choose the appropriate customer.
  3. Enter the Adjustment Note Date, Amount, GST, and Product/Service (This is the category, product, or service you're getting credit for).
  4. Click Save and Close.

 

Otherwise, here's how you can refund an invoice that your customer has already been fully paid for: 

 

  1. Click + New and select Refund receipt.
  2. Choose the customer you want to refund from the Customer ▼ dropdown.
  3. Enter the details in the fields using the info from the original sale.
  4. Select which payment method and account you wish to refund the customer from.
  5. Tick Save and Close.

 

To learn more about it, please review this handy guide: Handle customer refunds in QuickBooks Online.

 

In case you'd like to send your customer a summary of their invoices, payments, credits, and balances. See the following article for detailed guidance: Create and send customer statements in QuickBooks Online.

 

You can always reply or reach out to us again if you need anything else with transactions in QBO. We're always here to guide and assist you whenever you need help.

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