eSign Rental Deposit Receipt Made Easy

Deposit invoice

let's move on to client retainers so a client retainer is used whenever we receive a prepayment from a customer that is being served as a down payment as a deposit or a retainer that is then going to be used to pay invoices that are due for services that will be rendered in the future there's actually three ways to record this retainer the process alarm payments one is we can use a deposit method two we can use the accounts receivable method or the negative accounts receivable method and three we will use the earn income method now why do we need to choose one of the methods and why is it important for us to go this route so number one if we got a sales tax requirement so for example let's say that in your state you can only remit sales tax when the when the product has actually been delivered then you don't want to pre invoice that sale until you actually deliver it so it will require you to receive a payment upfront and and use one of these methods to record the prepayment before you actually create that invoice so again we're receiving a payment before an invoice is being created we could also have the other way where you can have a state where it doesn't matter if you were prepaid and you haven't delivered as long as you get paid then you owe the sales tax then in that case you would actually create the actual invoice when you get paid so that's really up to you now the other piece that could happen is sometimes you will get paid from using another system that that settles all the payments with your customers and maybe the timing in which you're creating invoices and the timing in which of recording payments is so far apart whether the payments are happening upfront or not it's just much easier to use this a prepayment account also materiality is important right for some folks using recording this pre payments could have a significant impact on the net income so that's also really important and and there's a lot of maintenance that goes in the process of keeping track of these pre payments so also consider client capable so if your client is not committed to to doing this in QuickBooks with high level of detail they may want to think about using something much simpler like the negative AR method or just screaming the invoice ahead of time now you want to record your invoice when the income is earned when the services have been delivered rendered and when the products have been shipped or delivered so that's why it's important to to separate the timing of payments with the timing of actual earned income which is why a payment and an invoice may have different dates and a payment could have a date before an actual invoice anyway let's start with the deposit method...