Advertise here    

QuickBooks Forums      

Go Back   QuickBooks Forums > QuickBooks Software Support > QuickBooks Pro Forum

Reply
 
Thread Tools Rating: Thread Rating: 2 votes, 5.00 average. Display Modes
  #1  
Old 01-26-2008, 02:16 PM
ruthh ruthh is offline
Registered User
 
Join Date: Jan 2008
Posts: 6
Invoicing for deposits...

I'm an interior designer. I need to give my client a bid for a simple job: a window treatment. Within this job are: my design hours, the cost of fabrication labor, the cost of fabric, the cost of installation and sales tax on some of these items. At the time I'm required to produce the bid for my client, I am not yet in posession of the final, exact pricing for each item. But I am prepared to commit to a fixed bid price. In this circumstance, I invoice my client for a deposit and have it placed in a virtual, liability sub-account of my business bank account until I know the exact quantities. The only way that I then know to allocate that deposit amount to the correct 'items' and 'accounts', for my records once the final numbers come in, is to re-invoice, ending the invoice with an allocated payment from their previous deposit (sitting in a liability account), in the same amount as the new invoice total, leaving it as a zero balance and thus allocating the funds correctly within my books. My concern is that this seems rather convoluted. Also, if I send my client a monthly statement, they will see unfamiliar invoices with strange zero balances. Should I be approaching this completely differently?
Reply With Quote
  #2  
Old 02-02-2008, 09:38 PM
JTAlves JTAlves is offline
Registered User
 
Join Date: Dec 2004
Location: Honolulu
Posts: 322
Send a message via AIM to JTAlves Send a message via Yahoo to JTAlves
Ruth,

I am not sure if this helps you but...
We are a small architecture and interior design firm and face the same problem that I THINK you are referring to. This may not work for you and we might be doing this wrong from an accountant's viewpoint, but it seems to work for us and is less convoluted than your approach.

Create an Invoice for the client for a 10% deposit (plus applicable tax) on the agreed upon fee (I'll get to and estimated but not finalized later) indicating that the amount due is a "deposit" and not part of the fee and will be applied as the last 10% due on the project fee.

When the client pays the deposit we take it in as income so we can immediately use the funds rather than keeping it in "escrow" liability account.

Then we void the paid invoice leaving a credit for the client. We then start progress invoicing the client and the first invoice bills the client for the first 10% of the fee for instance.

Our A/R then appears with the negative amount which is ok but .... the Client's statement now shows the "deposit" as a payment and a negative amount on the client's statement which we don’t want because we want the statement to show the actual amount due at the moment not considering the invoice. So, we created the "deposit” invoice and payment under a similar Project number Like 08-001 for the actual ongoing project and 08-001-D for the deposit. The deposit then still appears on our A/R which is good as a reminder that amount needs to be applied to that client at one point. That amount does not however appear on the client's statement for project # 08-001

When the project gets to the time for billing the final 10% we create that invoice then change the project # on the deposit payment and apply it to that last invoice resulting in $0.00 owed on that invoice.

When the amount paid as a deposit is different from the final agreed upon fee amount we ask for an additional deposit and handle it the same as above, adjust the % number to what ever the deposit it is in relation to the total fee. We never return deposit dollars if the final agreed on fee is less than the original estimate. If the project is halted for some reason we apply the "deposit" to the final amount owed and refund any excess money back to the client.
__________________
Jeff
Jeff@Ifdesigninc.com
Reply With Quote
  #3  
Old 02-08-2008, 12:43 AM
YourVirtualAsst YourVirtualAsst is offline
Registered User
 
Join Date: Oct 2007
Location: Oklahoma
Posts: 82
Send a message via MSN to YourVirtualAsst Send a message via Yahoo to YourVirtualAsst
Here is an idea. Just create an invoice for the deposit, code it to an income account titled "deposits". Apply the payment received to the invoice, which will zero it out. The whole deposit amount will post to the "deposits" account. Then when you have the final invoice numbers create the invoice for the full contract amount and code it to whatever account is needed, then use a credit memo to post the deposit to the invoice, coding the credit memo to the "deposits" account. Applying the credit memo to the invoice will zero out the deposit account and allocate the monies to the accounts on the invoices.
__________________
Rebecka Melson ~ Virtual Business Services ~ www.vbsofok.com
Bookkeeping & Administrative Support

Last edited by YourVirtualAsst; 02-08-2008 at 12:52 AM.
Reply With Quote
  #4  
Old 02-08-2008, 12:47 AM
YourVirtualAsst YourVirtualAsst is offline
Registered User
 
Join Date: Oct 2007
Location: Oklahoma
Posts: 82
Send a message via MSN to YourVirtualAsst Send a message via Yahoo to YourVirtualAsst
Also, once you apply the credit to the invoice it will not show up on the statement if you choose the "open transactions" option. It will just show the invoice amount less the deposit.

Example:

You create an invoice for $1,000.00 and apply a credit (deposit) of $100.00 it will show up on the statement only as inv# - $900.00.
__________________
Rebecka Melson ~ Virtual Business Services ~ www.vbsofok.com
Bookkeeping & Administrative Support
Reply With Quote
Reply

Bookmarks
Bookmark and Share
Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is On

Forum Jump


All times are GMT -5. The time now is 11:17 AM.


 

Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
All contents copyright (c) by AccountingUsers Inc.
You Rated this Thread: