Why is a customer deposit going into my sales by customer report as a sale?

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

I can provide clarifications about running sales reports in QuickBooks Online. There are several possible reasons why it shows on your Sales by Customer report.

You can open the deposit and check if it's posting to an income account or the VAT code entered include sales. For example, if you choose No vat (sales), it would still post to the report regardless of the amount.

If your transactions are coming from the Banking section, I recommend recording the deposit manually and match them to the downloaded deposits in bank feeds. By doing so, you'll be able to choose your own vat codes without indicating if it's sales or purchase.

For additional reference, I've attached some articles you can use along the process:

• Categorise and match online bank transactions in QuickBooks Online.

• Record and make Bank Deposits in QuickBooks Online.

Please know that I'm just a post away if you have any other questions. Have a great day ahead.