@ellichristina wrote:
Hi Rustler, thanks for your swift reply.
I agree that deposits do not pay down liabilities. In our case, for example, a customer pays us $25k up-front for equipment that is delivered 2-months later. There is clear language in our estimates that states if equipment is not delivered, we must return the deposit. Therefore:
1) Creating the invoice for a deposit inflates our income for the month because we are not recognizing the COGS, even as we map the deposit to a liability.
Create a service item named deposit and link it to a liability account, use that on the invoice or sales receipt. That will post the amount to the liability account and the funds can then be deposited with no effect on income.
2) Our preference is to create an invoice when the equipment has been delivered.
Yes of course, you list the items being delivered, at full price, each item posts to an income account. As the last item you use the deposit item, set the qty to negative one, and enter the deposit amount. the customer pays the balance due. Using the deposit item that way zero's out the liability account and posts that amount to income.
I also prefer not to enter the customer deposit as a negative on the Invoice because then the INvoice shows as $0. We want to see the true amount.
Does not apply when doing it the way I suggest - unless the deposit amount = sales amount
