How to account for customer deposits using QuickBooks Online – QuickBooks Online Tutorial

This is a quick blog post describing how to account for customer deposits in QuickBooks. I have also made a YouTube video showing step by step instructions, followed by a example of accepting a customer deposit and later on invoicing that same customer.

Instructions for accepting a customer deposit

1. Set up a new “Other Current Liabilities” account in your company file’s chart of accounts called “Customer Deposits.”
2. Create a new product/service item in your item list called “Customer Deposit,” the income account associated with this item will be the Other current liability account we created in step 1.
3. Accept a deposit from the customer or client using the Sales Receipt option under your customer center.
4. Continue to filling out the sales receipt as usual and when choosing an item, choose the Customer Deposit item and input the amount of the deposit.

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