Best Practice: Customer Deposits/Deferred Income QBO

Recording customer deposits against future work or deferred income

Create an Other Current Liability GL Account in QBO for Customer Deposit

Create a Non Inventory Item & link to Customer Deposit Liability account

To track easily create memorized report based on a Quick Report of the deposit item. Group the report by customer

Create Invoice to take deposit or deferred income using the deposit item.

 To recognize the revenue create a recurring invoice to decrement the deposit item and increase sales item.

Each month (or whatever frequency you defined in the recurring invoice) Recur360 will create a $0 invoice to decrease the liability and increase sales.

This reduces the liability account and shows on the custom report.

Note: The Deposit/Customer Liability account does not show on Profit & Loss Statements, but does show on the Balance Sheet Report