Thanks for joining this thread, RidgelineHi.

Prepayment should be treated as a liability to show that it doesn’t belong to you until it’s used to pay for services.

As shared by my colleague Rasa-LilaM above, we have to create a liability account to track the amount of prepayments. Let me show you how:

1. Go to Accounting on the left pane, then choose Chart of Accounts.
2. Hit New and choose Other Current Liabilities from the Account Type drop-down list.
3. Select Trust Accounts - Liabilities under the Detail Type drop-down.
4. Enter a name for the account example, Trust Liabilities.
5. Click Save and close.

Next, create a service item that you can use when recording invoices. Here's how:

1. Click the Gear icon and choose Products and Services.
2. Hit New.
3. Select Service from the Product/Service Information.
4. Add the service item.
5. From the Income Account drop-down, choose Trust Liability Account.
6. Lastly, click Save and close.

Here's an article for the complete details about prepayments:How to record a retainer or deposit.

As always, I'm only a few clicks away if you should have questions about this or anything else. Take care.