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.

  1. Fill out the Client Information and Receipt Information just as you would when entering an open A/R Receipt.
  2. Click the plus + symbol in the detail area.
Receipt - detail

2. Create a new document ...

You will be prompted to either enter Invoice Number (Apply) or Create a new document. Click the Create button.

Create a new document ...

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).
What type of document would you like to create?

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!

4.1. Deposit example

Receipt - detail (deposit)

4.2. A/R Credit example

Receipt - detail (A/R credit)