Depending on your business’s line of work, you may have customers or clients who pay a partial amount of their bill. These “down payments” must be handled in a different manner than full payments. And failure to distinguish between the two could throw your books off. So, how exactly do you handle down deposits using the Quickbooks accounting software?
Before we begin, it’s important to note that down deposits are typically used as a “retainer” for either a service or product that has not yet been delivered. The business owner may ask the client or customer to make a down payment as insurance. Once the product has been delivered or service rendered, the customer or client pays the remaining balance. Of course, this is just one of the many ways in which down payments are used. Regardless of how you intend to use them, you can refer to the steps below to properly record them in Quickbooks.
Recording a down deposit is a quick and easy process using Quickbooks. Once you’ve received the initial down payment, go ahead and fire up your Quickbooks account software. From the main screen, select Customers > Receive Payment, at which point you should enter the account where the deposit will be made in the “Deposit To” field. You can also change the date of the down payment by clicking the “Date” field. This is completely optional, however, and should not affect the actual down payment transactions.
In the “Amount” field, enter the total amount of the down payment. You should include how much the customer or client initially paid for his or her down payment, not the amount of the product or service. In the “Check #” field, feel free to include the check number used by the client or customer. Much like the date, this is a completely optional step that should not affect the transaction in any way. Lastly, you can include a note about the down payment in the “Memo” field, which is also an optional step.
Next, make sure all boxes in the “Invoices and outstanding transactions” menu are empty and not checked. If you see any boxes checked, click them again so they are unchecked. Congratulations, you’ve just recorded a down payment using the Quickbooks accounting software! Just remember to go back and record the remaining payment after the customer or client has made it.
Did this tutorial work for you? Let us know in the comments section below!