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Handling an upfront deposit or retainer for a cancelled job

If the customer cancels a project or work order for which you received an upfront deposit or retainer, determine whether you will return the deposit or keep all or a portion of the deposit.

If you keep all or part of the deposit

  1. Create an invoice for the customer.

  2. Enter the item for the cancelled project or work order on the invoice.

  3. On the next line, enter the Upfront Deposit or Retainer item.

    For the Amount, enter a negative value for the amount of the deposit that you are keeping.

  4. You may want to enter a Description of the transaction to indicate that this income was for a deposit for an unfilled order to make the information easier to track and understand in reports.

  5. Click Save.

    This creates an invoice that moves the amount of the deposit from the QuickBooks liability account to an income account.

If the customer is owed a refund

  • Create a refund check and allocate the check to the Customer Deposits or Client Retainers liability account (instead of to the Accounts Receivable account).

See also

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