Enter a Client Deposit
If you need to account for a Client Deposit, you've come to the right place. In context of these instructions, we are applying a general deposit on account to be applied against some future invoice. This deposit is not tied to any specific invoice yet.
- If you have already entered a Client Deposit and you need to know how to apply the Deposit to an Order then check out this article on How to Apply a Customer Deposit.
- If you want to enter a Client Deposit directly via an open Sales Order, see these instructions.
- If you want to Invoice a customer now and collect a pre-payment before shipping, you may want to look at the Deferred Revenue feature.
1. Create a new Receipt
First, navigate to Accounts Receivable ➤ Receipts. Click the + symbol or use the keyboard shortcut Command + N.
- Fill out the Client Information and Receipt Information just as you would when entering an open A/R Receipt.
- Click the plus + symbol in the detail area.
2. Create a new document ...
You will be prompted to either enter Invoice Number (Apply) or Create a new document. Click the Create button.
3. What type of document would you like to create?
Your choice here mostly depends on which G/L account you want to post the prepayment to. The decision is up to you (and your accountant).
- Both options will affect the balance sheet.
- A/R Credits will affect the assets side.
- Client Deposits will affect the liabilities side.
- The net effect to the balance sheet will be the same either way.
- Both options will appear on A/R Aging reports.
- The deposit/credit can be applied to future invoices via either method.
- A/R: Posts a credit to the Client's A/R (contra-asset).
- Deposit: Posts a credit to Client Deposits (liability).
4. Enter the Amount of the deposit.
If you selected Deposit in the previous step then you will see a new line item that has the Type = dep; if you chose to enter an A/R credit, the line will have the Type = ch. See below for an example of each.
Enter the amount of the Receipt in the Applied column. When the Distribution remaining = $0.00, click OK to save and don't forget to post!