Receive customer prepayments on sales orders in QuickBooks Desktop Enterprise (2024)

Learn how to set up, record, and manage Customer Prepayments (Customer Deposits) in QuickBooks Desktop Enterprise.

Customer prepayments (customer deposits) are when you get money before a product or service is done. You don't have an invoice for the payment yet.

To manage prepayments in QuickBooks Enterprise 24.0 or later:

Receive customer prepayments

Step 1: Turn on ‌prepayments

1. Go toEdit, and thenPreferences.
2. SelectPaymentsand thenCompany Preferences.
3. Go toPrepaymentsand then selectPrepayment Settings.
4. Select the checkbox toTurn On Prepayments.
5. Select a current liability account from the dropdown. You can create a new current liability account. Just selectAdd New.
6. Once you are done, selectOKand then selectOKagain in preferences.

Step 2: Receive prepayments on an open sales order

Create and save a new sales order or open any existing sales order.

Note: If you don't have sales orders turned on in your company file, you'll have to turn it on first.

1. Go to Sales Order and select Receive Payments.
2. This will take you to Customer Payment. You'll see a checkbox on your customer payment called Prepayment on Sales Order.
   Note: If you want to open the Customer Payment from Home or Customer Center, first select the checkbox Prepayment on Sales Order.
3. Enter the amount and other details for the prepayment and then select Save and Close.
4. Check the sales order to make sure the prepayment amount and balance due have been updated.

Print a sales order that shows you received a prepayment

1. Open the sales order and then go to Formatting.
2. Select Customize Data Layout, and then go to Footer.
3. Select the checkbox for Prepayments and Balance Due.
   Note: You can adjust the position of these fields in the Print template. Just select the Layout Designer.
4. Once you're done, select OK.
5. Open the sales order and select Print. Check the Sales Order for details about prepayments and balance due.

Apply a prepayment credit to an Invoice

1. Open the sales order and select Create Invoice.
2. Select Save this invoice and then Yes to apply prepayment credits.
3. You’ll see available Prepayment Credits for this Invoice. We recommend you apply prepayment credits linked to the invoice. You also see other available credits for this customer like a credit memo or other prepayments received for a different sales order not linked to this invoice.
4. Select the prepayment credit and enter or edit the amount of credit to apply to this Invoice. Then select Done.
5. Check to see if the prepayment credit and balance due have been updated. You can print the invoice with details for payments/credits and balance due.

How QuickBooks applies prepayment credits

QuickBooks creates two general journal entries for each prepayment credit when you apply it to an invoice.

To see these in QuickBooks, go to the Customer Center and find the Customer/Job you created an Invoice for, and applied a Prepayment credit.

You’ll see two general journal entries for each prepayment credit.

• The first general journal entry ‌is mapped to a liability account with a positive amount.
• The second general journal entry is mapped to an A/R account with a negative amount.

Note: The Account for Prepayment Transfer in both general journal entries is an inactive account QuickBooks creates. QuickBooks uses it to transfer an amount from a liability account to an A/R account.

Edit a prepayment

You can edit a prepayment if you haven’t applied it to an invoice. You can't edit a Prepayment after it's been applied to an Invoice.

If you need to make changes to a prepayment after you apply it to an invoice, you’ll need to delete the prepayment. This will delete the general journal entries QuicBooks creates automatically.

Run an Open Prepayments by Customer report

This report shows you all open prepayments you’ve received that you haven’t applied to an invoice.

1. Go to Reports and then Customers & Receivables,
2. Select Open Prepayments by Customer.

To view all prepayments including those you’ve applied to an invoice, just customize this report.

1. Select Customize Report, then go to Filters.
2. Select Prepayment Balance, then select Either and then OK.

Run an Open Sales Order by Customer report

1. Go to Reports and then Sales.
2. Select Open Sales Order by Customer Report.