Question

Use Sales Receipt for Customer Deposits

Forum|Forum|7 years ago
January 26, 2019
3 replies
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I use sales receipts to record customer deposits. I have a chart of accounts other liability item and a list item tied to the other liability account. I create a sales receipt to record the deposit as a liability using the liability account. When I create an invoice to charge the customer for the work, I add a line on the invoice using the customer deposit and using the amount as a negative number. The invoice comes out fine. But the amount on the sales receipt in the transaction center open balance does not change. Is this normal or am I doing something wrong? Best, Scott

QuickBooks Desktop for Mac

A

Anonymous

You are doing it right :smileyhappy: - past sales should not change - only the balance in the liability GL account changes.

qbteachmt

I would recommend Not putting a negative on the invoice.

Put the Prepayment item on a Credit Memo and apply it to the invoice. That way, the Invoice in the customer transactions listing and reporting will still show the Amount that was this sale. Putting the negative on the invoice results in the the invoice showing a reduced about as "this total sale" when really, what you want to see is the prepayment as part of Credits Applied from that credit memo and from any other Payment they make against any remaining balance owed.

And make sure your business tax entity type is allowed to hold this as Liability. A Cash Basis entity that is not allowed to hold it as liability should link that prepayment item to Income. For Cash Basis, that is income when you get it, and reverses income when you Apply it, the same as a Discount for the amount prepaid (already reported as income).

S

Scott5702Author

Hello all.

First thank your your responses.

I have received your advice to put the use of the deposit in a credit memo and apply it to the invoice. When I google how to apply a credit memo to an invoice it says to apply it as a payment. But then the customer does not see the deposit they paid on the invoice to reduce the amount due. I do not understand why this is a good idea.

My other thought is why does the Sales Receipt have a balance column if it is not going to change? The invoice screen has Amount and Open balance columns that reflect activity. Why doesn’t the Sales Receipt reflect activity?

Please understand that I am a small business owner who is not an accountant or bookkeeper. I simply use Quickbooks. I have no real interest in being either a bookkeeper or and accountant. I need to use something to run my business and this is what I use. So please do not berate me for not understanding how these things work. THANKS! I have had some unfortunate interactions over the lack of accounting knowledge before. Hence the comment.

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This is for the people who develop the Mac version of Quickbooks. It is very inconsistent. Many things that should work the same do not. Drop down lists that do not react the same way depending on where you are in the program come to mind. Some drop down lists alphabetized and some appear random. Sometimes you get find as you type in a drop down list and sometimes you don’t. Etc… Do the people who code this ever use it? Very frustrating.

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MikeinBC how do I find the ledger you refer to?

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pcftampa

When I tried to do this same transaction, the income showed up when I created the Sales Receipt. I verified to make sure the item I created in the Products & Services was tied to my Current Liab (Def Income). What am I doing wrong?

R

RCV

Thanks for checking in with us, pcftampa.

The sales will not be declared in your Profit and Loss report yet since we’re using a liability account on the sales receipt.

There could be several reasons that might trigger errors in Profit and loss report data. Among these are the following:

You are selecting a different date range for both of the reports
Profit and loss reports are generated on a different basis
You have selected an incorrect sales account to pull up the sales items
There are transactions included in the profit and loss report that do not use items
The company file has damage in the transaction or list data

Let's check if the correct account is selected for the Items. Here's how:

Open the Lists section in QuickBooks and click Item List.
Right-click any list item and choose Customize Columns.
Ensure that the Cost Account and Account columns are selected.
Now verify that each sales item is pointing towards the correct account.
Make changes to the items that are linked to the wrong account.
Verify if the reports are accurate now.

If the same thing happens, there may be a damaged data on the company file you've been working with. This causes unusual behavior when running a report in QuickBooks. We can run the Rebuild Data tool is built-in to fix any company file data issues. Just follow the steps and detail in the Fix data damage on your QuickBooks Desktop company file article. We can also repair your QuickBooks Desktop to fix any damaged components in the software.

Visit our QuickBooks Help Articles page for more insight s about managing your business in your software.

Feel free to update us after performing the solutions, as I want to ensure this is resolved for you. Please reply to this post and I'll get back to you. You have a good one.

B

bb100

I have QB enterprise. QB item set up is blocking the use of a liability account with the error message that no accounts receivable or payable can be used only revenue. Please advise. The company's business is primarily a customer deposit before item is built so having customer deposits item is crucial.

M

MirriamM

Hi there, @bb100.

To make sure that you're able to set up an item to the liability account, you'll want to check if you've selected Service if you want to collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.

To do this, here's what you'll need to do:

Go to the Lists menu at the top.
Choose Item List.
In the Item List window, right-click and select New from the pop-up menu.
From the Type drop-down menu, select the purpose of the deposits you collect.
You can select Service if you collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.
Enter a name for the item (for example Upfront Deposit) in the Item Name/Number field.
Select the Upfront Deposit liability account you created from the Account drop-down list.
Click Ok.

To know more about this process, see this article: Manage Upfront Deposits or Retainers.

If there's anything else I can do for you, let me know by commenting below. I'd be happy to help. Have a great day.

B

bb100

Thank you but I selected every single option from service to other charges and no matter what I choose, I am not allowed to link to a liability account. Either something is wrong with Quickbooks program or in my set up at some other area in quickbooks. How do I fix this problem?

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