AR Deposits, Prepays, Retainers


This topic discusses the details of how to handle deposits, prepays and retainers on your invoices.


1. Create / Edit the contra-asset or liability account that will receive the CR for amount of the deposit, prepayment, or retainer.

This account must be given the G/L Account Attribute of “AR Control”

2. Manually create a Sales Journal Transaction with the following attributes.

Entry Type  = “Credit Memo”

A/R Control  = “Contra-Asset/Liability” account from previous step.

Detail G/L Account = “Sweep / Undeposited Account”

Detail Revenue Type = “n/a” **very important

G/L Impact (example)

DR: Sweep/Undeposited   1000


3. Create & Post Invoice according to normal billing procedures.

Note: Deposit / Prepayment / Retainer will not appear within the context of the job’s invoice details, but will show as a credit in the “A/R Summary” section on the invoice, if that option was selected at the invoice print options screen.

G/L Impact (example)

DR: A/R   1000

CR: INCOME   1000

4. Create an AR Cash Receipt transaction.

Select the outstanding credit memo along with the invoice/s that apply.

If necessary, adjust the detail amounts of either the credit memo or invoice/s such that the application results in a net-zero transaction.

In cases where there is an unapplied balance for the credit memo, the balance will remain available for future similar applications. If the credit memo does not fully satisfy the invoice/s, then additional separate A/R Cash Receipt transactions can be recorded as payments are received.

G/L Impact (Example)


CR:  A/R       1000