Problems with Deposits?
Problems with Deposits?
Before you can take deposits, there are a few steps (usually undertaken during Onboarding) which are required particularly if you are synching to QuickBooks Desktop or QuickBooks Online.
You may have seen this error when trying to Take a Deposit.
This is entirely normal and easily fixable. Scroll down to the Background on Deposit Accounting section to understand the details. Hereafter are the steps to finish setting up the required accounts and items to record deposits properly.
Finish Setting up Deposit - QuickBooks Desktop
The details for this setup is covered in the Intuit Knowledge Base article:
Step 1: Create a DEFERRED REVENUE liability account in QuickBooks Desktop:
- From the Lists menu, select Chart of Accounts.
- In the Chart of Accounts window, right-click and select New from the pop-up menu.
- Select Other Current Liability as the account Type.
- Enter a name for the account (for example, RETAINER LIABILITY) in the Name field.
- Select Ok.
Note: You should set up the account with a zero opening balance unless you are tracking existing upfront deposits or retainers.
Step 2: Create an UPFRONT DEPOSIT ITEM in QuickBooks Desktop:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- From the Lists menu, select Item List.
- In the Item List window, right-click and select New from the pop-up menu.
- From the Type drop-down menu, select the purpose of the deposits you collect.
- You can select Service if you collect upfront deposits for services, or Other Charge if you collect upfront deposits for products.
- Enter a name for the item (for example RETAINER or DEPOSIT) in the Item Name/Number field.
- Select the Upfront Deposit liability account you created from the Account drop-down list. for example as above RETAINER LIABILITY
- Select Ok.
You can now use this item to record upfront deposits or retainers you accept.
Step 3: In Ignition, Select RETAINER ACCOUNT in Payment and Accounting System:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- Login to Ignition.
- Go to MyBusiness
- Select the RETAINER ACCOUNT you set up above (Example RETAINER LIABILITY) under under QuickBooks Deposit Account
Step 4: In Ignition, Select RETAINER ITEM DEPOSIT ITEM in QuickBooks Desktop:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- Login to Ignition.
- Go to MyBusiness
- Select the RETAINER ITEM you set up above (Example RETAINER) under under QuickBooks Deposit Item
Finish Setting up Deposit - QuickBooks Online
The details for this setup is covered in the Intuit Knowledge Base article:
Step 1: Create a DEFERRED REVENUE liability account in QuickBooks Desktop:
- In the left side Navigation menu, Right-click on Accounting and go to Charts of Accounts
- In the Chart of Accounts window, select New from the top menu.
- Fill out the Account details, selecting Other Current Liabilities in Account Type, and Other Current Liabilities in Detail Type.
- Enter a name for the account (for example, RETAINER LIABILITY) in the Name field.
- Select Save and Close.
Note: You should set up the account with a zero opening balance unless you are tracking existing upfront deposits or retainers.
Step 2: Create an UPFRONT DEPOSIT ITEM in QuickBooks Desktop:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- In the left side Navigation menu, Right-click on Sales and go to Products and Services
- In the Products and Services window, select New from the top menu, select Non-Inventory Item.
- Fill out the Item details, selecting the Deferred Revenue Current Liability account you created above in Income Account.
- Enter a name for the account (for example, RETAINER) in the Name field.
- Select Save and Close.
You can now use this item to record upfront deposits or retainers you accept.
Step 3: In Ignition, Select RETAINER ACCOUNT in Payment and Accounting System:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- Login to Ignition.
- Go to MyBusiness
- Select the RETAINER ACCOUNT you set up above (Example RETAINER LIABILITY) under under QuickBooks Deposit Account
Step 4: In Ignition, Select RETAINER ITEM DEPOSIT ITEM in QuickBooks Desktop:
To accept upfront deposits or retainers, you need to set up an item to use when you record the associated transactions. This item is linked to the liability account you just set up to properly record upfront deposits.
To create an item, follow these steps:
- Login to Ignition.
- Go to MyBusiness
- Select the RETAINER ITEM you set up above (Example RETAINER) under under QuickBooks Deposit Item
Background on Deposit Accounting
Recording Deposits properly
Taking a Deposit needs to be recorded as an increase in Cash matched with a Current Liability for Deferred Revenues reflecting the facts that the work has not been performed yet. A deposit does not generate Sales or Accounts Receivables at the time it is taken.
While you can take a deposit from a credit card from a Customer in Ignition anytime, the system needs to be able to sync to QuickBooks the Current Liability created by the Deposit at the same time it records the increase in Cash
