If you are in the practice of accepting customer prepayments, retainers, or deposits on signing (which you should–a topic for another time), then it’s important to get the accounting right. It’s possible to accidentally double-report income and pay too much tax, and it’s also possible to under-report income and pay too little tax until audited.
By the end of this video, you’ll see a) conceptually how customer prepayments work, b) how to configure QuickBooks Online so that prepayments are accounted for correctly, and c) how to apply prepayments to customer invoices. I’ve also included a downloadable guide for both QuickBooks Online and QuickBooks desktop editions.
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