You're already on the right track in recording a deposit on a job, @jkeim. I'll share more details about this below so you can manage your project transactions in QuickBooks Online (QBO) accordingly.

Cash basis reports will not reflect deposit/retainer as received until the invoice is paid in full. That's why your invoice is showing up in your accounts receivable reports. You can also speak with your accountant regarding a workaround that includes a journal entry.

For the complete guide in recording deposits in QBO, please see this article: Record a retainer or deposit.

Also, you may want to check out this article as your reference to guide you in using projects to track your labour costs and profitability in QBO: Track hourly labour costs and profitability by project in QuickBooks Online.

Please feel free to leave a comment below if you have other concerns about managing project transactions in QBO. I'm always ready to help. Take care, @jkeim.