Overview When a customer provides a deposit, the deposit should actually become a liability and therefore reside under liabilities until the project has been invoiced.
This method will also record the deposit on the invoice for the customer's records and it will provide a receipt for the deposit.
- Create the customer.
- Create a Sales Receipt for the customer's deposit.
- Use "Advance Deposit" item and update the amount to the deposit amount.
- This should post the deposit to the "Undeposited Funds" account and should also post the deposit to the "Advanced Customer Payments" liability account. The deposit should not show under P&S's sales, but will show under the Liabilities on the Balance Sheet.
- Deposit the "Undeposited Fund" as normal to the chequing account.
- Create the invoice when the project is done (or when we need to bill). Add a line item, "advance deposit", to the invoice and use QTY of -1 and the amount should be the deposit amount. This will clear the deposit from the liability account.
- The invoice will now show the invoiced items and the deposit and the balance will show the outstanding amount.