Handling Deposits for Future Work with QuickBooks
Handling Deposits for Future Work with QuickBooks
There are a lot of factors that impact how you will want to handle deposits between BizScheduler and QuickBooks (Desktop or Online). Some of those factors have to do with:
- Whether you are using Cash or Accrual accounting practices
- If your services are taxable or not
- If they are taxable, does your state require you to charge tax on your deposit (back to Cash or Accrual in most cases)
- Timing between when you take the deposit and when you actually do the work
- ...and a variety of other situations based on your state, province, country, etc.
So, for the sake of this article, we will show an example for this process that covers most cases. This will require at least one Service for Deposits, though your accountant may prefer that you use two separate services: one for Deposits Received and a second one for Deposits Prepaid (or some titles along those lines). As with all accounting-specific questions, it is best to seek the counsel of your accountant or tax adviser to determine if the Deposit account will be an income account or a liability account. Regardless of what you name them, make sure that the account names used in your BizScheduler Services match what you have in QuickBooks.
Deposit as its own Job, Separate from the Work
To receive the deposit, create a job that consists only of the Deposit that is being received. This job would typically be created for the day that you receive the deposit. Then for the work do be done, schedule that job as well and be sure to add a line item that recognizes the deposit that was prepaid by the customer. Here are the basic steps...
- Create a job with a single service using the Deposits Received service
- Make sure that you are entering the deposit as a positive number
- Enter the Payment Type information at the bottom of the job (e.g. credit card charge) and save
- Export the job to QuickBooks from the Accounting Report as you would any other job
- This results in an increase in your Deposits Received account, which would be a revenue account under Cash accounting, and a Liability account under accrual
- Schedule the Job to perform the services that your customer is requesting
- This will have all of your services that you are charging for
- This will also have an entry for Deposits Paid, which will be a negative number
- Enter the Payment Type information at the bottom of the job (e.g. credit card charge) and save
- Export the job to QuickBooks from the Accounting Report
Again, when it comes to your specific accounting needs and situations, please contact a tax/accounting professional whom you trust.
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