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A
Anonymous
March 25, 2019
Question

Customer Deposits on Sales Orders

  • March 25, 2019
  • 2 replies
  • 0 views

What is the best process to record customer deposits on sales orders? Customers place an order, might ship in say two weeks, they pay a deposit at the time of the order. I have an deposit item pointed to a current liability for the customer deposits. Do I just record a sales receipt for the deposit, then invoice the sales order once it ships, and use that same deposit item to deduct the deposit? Seems like there should be way to tie the deposit to the specific sales order, and not have to remember to deduct the customer's deposit when invoicing.

    2 replies

    A
    Anonymous
    March 25, 2019

    Yes what you have described is one way of handling deposits and its probably the best.

    FYI - you can add the deposit deduction onto the sales order so you dont have to remember later.

     

    The alternate (worse) way of handling deposits is to simple receive a bank deposit and code to AR with the customers name - but not enter any item. This just leaves on open credit within the customers AR record and you then apply that credit the ales invoice once its created.

    A
    Anonymous
    March 25, 2019

    I was thinking there's no point in putting the deposit on the sales order since it's non-posting, but that would make it automatically show up on the invoice created from the sales order, so that makes sense. Thanks!

      MJoy_D
      MJoy_D
      February 15, 2023

      Thank you for getting back and providing us with more details about your concern, @arretx.

       

      You can record it in QuickBooks Desktop as upfront deposits or retainers. Then, you can apply this deposit to your invoices. 

       

      To create a liability account:

       

      1. Go to the Lists menu and click on Chart of Accounts.
      2. Click on New from the pop-up menu.
      3. Select Other Current Liability as the Account Type.
      4. Set an account name.
      5. Click on Ok.

       

      To create an upfront deposit item:

       

      1. Go to the Lists menu and click on Item List.
      2. In the Item List window, right-click and select New from the pop-up menu.
      3. From the Type dropdown menu, select the purpose of the deposits you collect.
      4. You can select Service if you collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.
      5. Set a name. 
      6. Select the Upfront Deposit liability account you created from the Account drop-down list.
      7. Click on Ok.

       

      Here's how to record upfront deposits or retainers you receive: 

       

      1. From the Customers menu, select Enter Sales Receipts.
      2. From the Customer:Job drop-down list, select the customer or job.
      3. If the Deposit To field appears, select the account into which to deposit the funds.
      4. Enter all the information needed.
      5. Click on Save and close.

       

      For detailed guidance with setting up, recording, and managing upfront deposits, check out this article: Manage upfront deposits or retainers. 

       

      See this article on how to receive payments you receive from your customers in QuickBooks Desktop: Record an invoice payment. 

       

      Let me know if you have further questions about recording your transactions. I'm always here to help. Have a great rest of the day!

      A
      arretx
      February 16, 2023

      The problem is not solved.

       

      There seems to be no provision to attach a set $$$ amount in the form of a customer payment to a specific sales order such that when the sales order is converted to an invoice, it simply uses those funds.

       

      The only way we can get the books to be accurate real-time without a myriad of manual entries is to receive payment and generate a credit memo for use later, which means we have to somehow reference exactly WHAT Sales Order that payment is supposed to be paying for.  This can get messy if the same customer orders two of the same thing on separate sales orders.

       

      What we really need is the ability to create a sales order, send a link to a payment interface to the customer for 50% of the order, let the customer securely enter their CC info, charge the card and automatically attach those monies directly to that order so they can be settled in the future when the order goes to invoice.

       

      Right now, there's just too much margin for error in the process because there's too much manual maintenance required.

        G
        gipisi
        April 12, 2023

        We have a very similar issue, difference being that those are Wire Transfers incoming, and we have no way to link the payments with the sourced Estimates or Sales Orders.

         

        In the end, we need to basically do the cross reference manually, and twice - when the money comes in, and then later when we actually invoice the customer, which could be (many) months later. This is very time consuming, and prone to error.

         

        Would be great if there was a way to link a payment (or credit memo) to a Sales Order, so when it's invoiced, it just processes the payment towards invoice, without need for hoops again. And without reducing the value of the Invoice/SO.

         

        Why is this not a feature yet? Or if it is, how on earth can I do it?

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