Invoices

Thank you for visiting the QuickBooks Community again, Engineering101. I'll be sharing various steps to ensure you can record the 25% deposit or retainers and apply this to the invoice in the future.

Some businesses receive deposits from customers/clients before conducting any services. When they invoice a customer for services, those entries are paid using the money from the deposits. With this, you can set up a deposit or retainer process for your company in QBDT. The money you hold is treated as a liability until it's used to pay for services. When you invoice the customer and receive payment against it, it'll turn that liability into income.

To start with, I suggest creating a liability account to track the number of retainers you receive from your customers.

Here's how:

1. From the Lists menu, select Chart of Accounts.
2. In the Chart of Accounts window, right-click and select New from the pop-up menu.
3. Select Other Current Liability as the account type.
4. Enter a name for the account (for example, Upfront Deposit) in the Name field. Take note that you should set up the account with a zero opening balance unless you are tracking existing upfront deposits or retainers.
5. Click Ok.

Once done, create a retainer item to use when recording deposits or retainers. Follow these steps:

1. From the Lists menu, select Item List.
2. In the Item List window, right-click and select New from the pop-up menu.
3. From the Type drop-down 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. Enter a name for the item (for example Upfront Deposit) in the Item Name/Number field.
6. Select the Upfront Deposit liability account you created from the Account drop-down list.
7. Select Ok.

After you have set up the accounts and the retainer or deposit item, you can begin to create either Invoices or Sales receipts. You can open this article to see extra details on how to perform and finish the process: Manage upfront deposits or retainers.

Lastly, you may refer to this article to view information on how you can set up progress invoicing in QBDT which lets you split the transaction into as many invoices as you need: Set up and send progress invoices in QuickBooks Desktop.

Please come back if you need further assistance in handling your entries. It's our priority to ensure everything is straightened out, Engineering101. Have a great day!