Hi there, Stella. I'd be glad to clarify my colleague's steps for tracking prepaid services in QuickBooks Online (QBO).

The first invoice tracks the prepaid service for the customer under the unearned income. Furthermore, the net zero invoice transfers the unearned revenue to your income account.

To learn more about this topic, you can read this article for reference: Record a retainer or deposit

Also, here’s more information on how to record invoice payments in QuickBooks Online.

I’m always here if you need help recording your income in QBO. Let me know in the reply section below. Have a great rest of the day!