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.
Create an invoice for the customer.
Enter the item for the cancelled project or work order on the invoice.
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.
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.
This creates an invoice that moves the amount of the deposit from the
QuickBooks liability account to an income account.
refund check and allocate the check to the Customer Deposits or Client
Retainers liability account (instead of to the Accounts Receivable
deposits and retainers