Customer (sales) Deposits for a Receipts and Payments reporting organisation

If a customer makes an initial deposit payment as an advanced payment pending the completion of a rental or project and before final invoicing, we suggest following the simple process described below.

For charities or Churches reporting on a Receipts and Payments basis the deposit amount needs to be reflected as a receipt in the SoFA because the cash/bank balance is amended and therefore the Receipts and Payments basis Fund balance.

We suggest using the following process: -

1. Create an income account; something like Deposits received usually as a sub-account of Income from Other Trading Activities. See Account Details Maintenance for more on adding a custom account.
2. Set up a sales item for deposits making sure the posting account is the income account set up above. See Sales Items for more.
3. Create a sales invoice in the normal way selecting the deposits sale item created above, ensuring it is allocated to an appropriate Fund.
4. Receive the cash against the invoice as usual
5. When required, raise the full invoice with line items as needed and a final line item with a negative rate to represent the deposit already received.
6. Finally receive the cash to settle the invoice