When you take a deposit or partial payment on an order, Boatyard records it in QuickBooks as a sales receipt, not an invoice. The invoice is only created when you invoice your customer for the final payment.
This matters for sales tax. If Boatyard created an invoice for the full order amount when your customer only paid a deposit, you would owe sales tax on the full amount straight away.
Recording deposits as sales receipts means sales tax and revenue are posted when the work is complete, and the final invoice is sent.
What happens in QuickBooks
You take a deposit. Boatyard creates a sales receipt in QuickBooks for the deposit amount, labeled as a customer deposit.
The deposit is held in a liability account. Boatyard creates a BY Customer Deposits account in your chart of accounts (an Other Current Liability account) and posts the deposit there.
You send the final invoice or take the final payment on the order. Boatyard creates the invoice for the full order amount. Each deposit payment appears on the invoice as a negative line item, so the balance due is correct.
The liability account clears. When the invoice is posted, the deposit is moved out of the liability account, bringing it back to zero for that order.
If a deposit is refunded, the refund is applied against the liability account so your books stay balanced.
Example
Say you take a $200 deposit on a $1,000 order.
Step in Boatyard | What you'll see in QuickBooks | BY Customer Deposits balance |
Take a $200 deposit | A $200 sales receipt marked as a customer deposit | $200 |
Send final invoice or take the final payment | An invoice for $1,000 with a BY Customer Deposit line of -$200 | $0 |
The final invoice in QuickBooks would look like this:
Line item | Amount |
Service | $1,000 |
BY Customer Deposit | -$200 |
Balance due | $800 |
If you took more than one deposit, each one appears as its own negative line item.
Using your own liability account or Class
Boatyard uses the BY Customer Deposits account by default. To use a different liability account:
Go to Settings, then Integrations.
In the QuickBooks deposit settings, find the Deposit Liability Account field.
Select any other Other Current Liability account from your chart of accounts.
If you use Classes or Dimensions in QuickBooks, you can also choose which one is applied to deposit sales receipts for each of your Boatyard locations.
Good to know
Nothing is sent when you request a deposit. QuickBooks is only updated once the deposit is actually paid.
Past orders aren't changed. Invoices and sales receipts created in QuickBooks before this update stay as they are.
You don't need to set anything up. The BY Customer Deposits account and a matching nontaxable BY Customer Deposits product/service are created for you automatically.