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ChrisMarie2020
July 11, 2022
Question

How to set up unearned revenue account and post to customer's account

  • July 11, 2022
  • 1 reply
  • 0 views

We currently use QB Enterprise Desktop and for several years have used a cash accounting basis.

Our new employer wants to use an accrual accounting, with unearned revenue as an account to post down-payments to. My questions are 1)how do we set up the unearned revenue account, 2)how do we post the down payment to the customer's account when invoicing for the total amount, and 3)how do we apply the down payment when the cash is deposited? Thanks!

1 reply

M
mv32
July 11, 2022

Thank you for posting here in the Community, @ChrisMarie2020.

 

I can share some insights relevant to setting up an unearned account and posting customer payment in QuickBooks Desktop.

 

Commonly, some users use the Other Current Liability account when setting up an Unearned Revenue. In your case, I suggest checking with your accountant to make sure your book is accurate.

 

Meanwhile, when recording the payment and posting the Unearned Revenue account, there are two ways to collect the payment. You can either enter the upfront deposit/retainer as a line item on an invoice or a credit to the customer.

 

I recommend following the steps on the article I'm adding below to ensure the process is correct and will lead to the accurate posting: Manage upfront deposits or retainers. This includes the steps-by-step process to apply the down payment when the cash is deposited.

 

Please let me know if you have any other issues or concerns in the comment section below. I want to make sure everything is taken care of for you. Have a good one!

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