It is more and more common nowadays for businesses to take deposits from customers which means it is more important to know how to record these transactions in QuickBooks!
In many professional services industries like legal and accounting we call it a “retainer”. It’s the same thing it just sounds more sophisticated! Especially in this economy it is so important to do this. People are over spending, living way beyond their means and you want to make sure you are going to get paid before you put in your hard work. The simple reality is that if you are going to do the work right away, the customer should be willing to pay for it right away. When I switched to this method of billing this year I had one client complain that I was no longer giving him the “professional courtesy” of billing with terms. My response was that all too often I was not getting the professional courtesy of a timely payment 🙂
I can also speak from experience and tell you that when you start doing business this way it will dramatically increase your cash flow and that MOST people actually respect and commend me on the practice!
I have covered how to record customer deposits in QuickBooks before. Here is an updated video on how I do it in QuickBooks when I do it on my own company file. For a much more detailed step by step walk through of how to set this up and record these transactions in QuickBooks please visit my Knowledge Store and download the full length (36 Minute video) recording on the entire Accounts Receivable cycle where I go over 2 different ways of doing this including the one you see here.