DEPOSIT INVOICING

I can help you record advanced invoice payments made by your customers in QuickBooks Online (QBO), Emily.

Once you receive the prepayment, you can record it as a retainer or deposit, which is treated as a liability. While your business is holding the money from a deposit or retainer, it doesn't belong to you until it's used to pay for services. Once you invoice the customer and receive payment against it, you can convert that liability into income.
 
Here’s what you need to do:
 
Step 1. Create a liability account.
Step 2. Create a retainer item.
Step 3. Create a trust liability bank account (Not always needed).
Step 4. Create Sales receipt or Invoice for deposits or retainers.
Step 5. Turn retainers into credits on invoices.
Step 6. Transfer funds from your trust liability account to your operating account.
 
For a detailed step-by-step process for each step, feel free to read this article: Record a retainer or deposit.
 
Most importantly, I recommend seeking help from your accountant, as they may provide additional methods for recording advance payments from your clients in QuickBooks.
 
If you want valuable insights into your sales and inventory status, you can easily generate reports in QBO. For assistance, check out this article: Use reports to see your sales and inventory status in QuickBooks Online.
 
Additionally, we have a team of experts who can offer personalized guidance on linking your accounts, automating tasks, and teaching best bookkeeping practices to enhance your efficiency. For more details, check out QuickBooks Live Expert Assisted.
 
You can always rely on us if you have questions about customizing your sales reports. We'll ensure that every query you have is addressed.