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JamesWoodcock
November 30, 2021
Question

Customer Booking Deposits

  • November 30, 2021
  • 1 reply
  • 0 views

So customers pay a booking deposit in advance of their treatments. This is charged on invoice to customer as a current liability so appears within the Balance Sheet but not P/L. Then the customer is invoiced for treatment some weeks later the booking deposit is credited to the booking hence clearing the Balance Sheet to zero. The question I have is that on certain occasions if the customer does not cancel the treatment booking within the prescribed notice period then the booking deposit is forfeited. So in that instance what are the specific QuickBooks steps I need to take to effectively balance out the Balance Sheet and credit the deposit amount to Income. Appreciate your advice. Thanks.

1 reply

K
Kurt_M
November 30, 2021

Thank you for taking the time to post your query here in the Community, @JamesWoodcock. Let me help you.

 

In response to your question, we will most likely create a Journal Entry to shift the balances from liability to revenue.

 

Journal entries are only used as a last resort when it comes to recording transactions. They allow you to transfer funds between accounts and make your books balance in specified ways.

 

Here’s how to create a Journal entry:

  1. Select +New and then Navigate to Journal entry.
  2. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  3. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
  4. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  5. Enter information in the memo section so you know why you made the journal entry. Select Save and new or Save and close.

 You can also refer to your preferred accountant for other options.

 

Here's an article if you want to learn more about how to record a retainer or deposit.

 

Leave a comment below if you have other questions or concerns about this. I'm always here to help.

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