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L
LWC2020
January 31, 2022
Question

recording customer liability deposits

  • January 31, 2022
  • 1 reply
  • 0 views

I am preparing a quarterly GST return. I collect deposits from customers and place them in my liability account, once the work is completed I then invoice them and any deposits received  get deducted as a negative number on the invoice (taking them out of the liability account).   However, when it comes time to file the taxes those negative numbers bring down my total sales number.  The deposit also increases the sales total, which it should not because there is no tax collected on the deposit.  

 

1 reply

T
Trish_T
January 31, 2022

Hi LWC2020.

 

Thanks for reaching out here.  QuickBooks is a dynamic program for completing your daily tasks with peace of mind.  I can see how concerning it can become when customer deposits impact your sales and taxes unexpectedly.  I'll be happy to provide more information so you're on the right track with your work.

 

Based on the information you've provided, I recommend reviewing how to manage upfront deposits or retainers to ensure you're recording them correctly.  This will ensure a smooth workflow so your GST return is accurate.  If you require additional assistance, I suggest reaching out to your accountant.  If you don't have one, you can locate a ProAdvisor in your area here.

 

Please reach back out if you have any other questions.  We'd be glad to help!

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