Overview

Customers pay deposits to show their commitment to a purchase or booking. For businesses, deposits help cover early costs and reduce the risk of losing money if the customer cancels. For customers, a deposit secures their spot, promises priority service, or locks in a price. Non-refundable deposits also make people less likely to cancel because they have already paid part of the cost.

These tutorials explain the different ways to treat Customer Deposits, how to choose the best way for your business, and how to record customer deposits.

Navigation: Main Menu > Accounting > Ledger

How to Indicate a Deposit Requirement on a Quotation

1. Navigate to the Main Menu > Customers > Customers.

2. Double click to open the Customer.

3. Click the Accounting (tab).

4. Select the payment Terms from the dropdown list.

   • Note: If there is no term that indicates the deposit requirement, you can create one (see below).

5. Click Save (button).

How to Create a New Credit Term

1. Navigate to Main Menu > Setup > Accounting.

2. Click Credit Terms (tab).

3. Add a Credit Term as required.

4. Click Save (button).

Option A: Credit Customer Accounts with the Deposits  

Procedure:

• A Pro-forma Invoice or Quotation is issued with a request for a deposit.

• The deposit is credited to the customer's account.

Advantages of this method: 

• Full transparency: Both the organisation and the customer can keep track of the deposits.

• Aligns with IFRS 15, recognising revenue only when performance obligations are met.

• VAT is not due until an invoice is issued.

Disadvantages of this method:

• It is difficult to distinguish between Customer Deposits and Customer Overpayments.

• If a customer has multiple orders, it will become difficult to track which deposits belong to which orders.

• It may understate the value of the Customer Age Analysis for lending purposes.

• Requesting the deposit, and following up on it, is a manual process.

Choose this option if:

• Deposits are not a regular part of the organisation's trading activities.

• The Customer Age Analysis is not tied to credit facilities.

• The organisation is small (e.g. only has one bookkeeper who is knowledgeable about the business).

How to Enter a Deposit Received Manually

Customer Receipts can also be captured when doing a Bank Import.

1. Navigate to Main Menu > Accounting > Ledger.

2. Click New (button) > Mouse-over Customer Transactions > Click Customer Receipts.

3. Enter the Date and Period as per the Bank Statement.

4. Select Cr. Account = Customer Account.

5. Select Dr. Account = Bank Account. 

6. Enter the amount received next to Total (Inc) and select No VAT.

7. Enter a Reference and Note in the sections provided.

8. Click View (button) and select Items to show a list of outstanding items.

9. Leave the Receipt unallocated. 

10. Click Done (button).

How to Allocate Deposits Received to Invoices

1. Navigate to the Main Menu > Accounting > Ledger.

2. Set the Date on the left.

3. Select Filter = Customer Account.

4. Select the Customer who paid a deposit.

5. Click View (button).

6. Double click to open any unallocated Receipt in the Outstanding column and allocate it to an Invoice:

   1. On the bottom right in the Outstanding section, click the Invoice the deposit must be allocated to.

   2. Click Allocate (button).

7. Click Save (button).

With Option A, Customer Invoices are entered according to standard procedures.

Option B: Use Control Accounts to Manage Customer Deposits

Procedure:

• A Pro-forma Invoice or Quotation is issued with a request for a deposit.

• The deposit is credited to a Control Account (e.g. Customer Deposits Held).

• Once an Invoice is generated, the deposit is transferred to the customer's account.

Advantages of this method: 

• The organisation can keep track of its deposits.

• Deposits can be clearly distinguished from Customer Overpayments.

• Interest can be paid on the deposits (e.g. if the money is held in an interest-bearing bank account).

• The organisation's Customer Age Analysis correctly reflects what customers owe.

• Aligns with IFRS 15, recognising revenue only when performance obligations are met.

• VAT is not due until an invoice is issued.

Disadvantages of this method:

• Requesting the deposit, and following up on it, is a manual process.

• Extra accounting transactions are needed to enter and transfer the deposits.

• The control account must be reconciled.

Choose this option if:

• The Customer Age Analysis is tied to credit facilities.

• Interest must be paid on deposits.

• Accounts are audited by external auditors.

• Deposits are refundable.

How to Create a Deposit Control Account

Creating individual accounts makes it easier to manage and reconcile the control account.

1. Navigate to Main Menu > Setup > Accounting.

2. On Accounts (tab), click the arrow to expand the Statement of Financial Position.

3. Click the arrow to expand Liabilities + Equity.

4. Click the arrow to expand Liabilities.

5. Right click on Current Liabilities > Add Account.

6. Create an account named: Customer Deposits Held.

7. Optionally create individual accounts under Customer Deposits Held: right click on Customer Deposits Held > Select Add Account (e.g. Customer Deposits Held - Customer A, Customer Deposits Held - Customer B).

How to Create an Entry Type for Customer Deposits

1. Navigate to Setup > Accounting.

2. Click Entry Types (tab) > Select Add Entry Type.

3. Create an Entry Type as follows:

   1. Description: Transfer Customer Deposits.

   2. VAT Type: No VAT.

   3. Debit: Ledger (leave the account field blank).

   4. Credit: Customer.

   5. Accept the defaults for all other fields. 

4. Click Save (button).

How to Record Customer Deposits Received

General Income can also be captured when doing a Bank Import.

1. Navigate to the Main Menu > Accounting > Ledger.

2. Click New > General Income.

3. Type the Date.

4. Select Dr. Account = Bank Account.

5. Select Cr. Account = Customer Deposits Held (or the individual accounts).

6. Type the Amount received.

7. Select No VAT.

8. Click Save (button).

How to Transfer the Deposit to the Customer Account

1. Navigate to Main Menu > Accounting > Ledger.

2. Click New > Customer Transactions > Transfer Customer Deposits.

3. Select the Date.

4. Select Dr. Account = Customer Deposits Held (or the individual account).

5. Select Cr. Account = Customer Account.

6. Type the amount held as a deposit in the Total (Inc) field.

7. Allocate the amount to the Outstanding Invoices:

   1. Tick the line items in the Outstanding block (bottom right).

   2. Click Allocate (button).

8. Click Save (button).

Method 1: How to Record Interest Received on the Deposit Account

Use Method 1 if only some customers receive interest and the organisation receives the rest of the interest. In South Africa, there is no VAT on interest received or paid. Other countries may have different rules.

1. Navigate to the Main Menu > Accounting > Ledger.

2. Click New > General Income.

3. Select Dr. Account = Bank Account.

4. Select Cr. Account = Interest Received.

5. Type the amount of interest received.

6. Select No VAT.

7. Click Save (button).

Note: Interest Received can also be captured when doing a Bank Import.

Method 1: How to Pay Interest to a Customer

1. Navigate to the Main Menu > Accounting > Ledger.

2. Click New > Customer Transactions > Transfer Customer Deposits.

3. Select Dr. Account = Interest Received.

   1. • Note: Interest Received was previously credited with the full amount of interest. Now part of this interest is taken away and allocated to the customer.

4. Select Cr. Account = Customer Account.

5. Enter the Date

6. Enter the Amount of interest the customer is receiving.

7. Type Interest Received in the Notes.

8. Allocate the amount to the Outstanding Invoices:

   1. Tick the line items in the Outstanding block (bottom right).

   2. Click Allocate (button).

9. Click Save (button).

Method 2: How to Record Interest Received on the Deposit Account

Use Method 2 if the deposits are held in trust and all the interest must be distributed to the customers. In South Africa, there is no VAT on interest received or paid. Other countries may have different rules.

1. Divide the Interest Received from the Bank among the Customer Deposit Accounts in proportion to their deposits.

   1. • Note: Total Interest Received divided by Total Deposits Held multiplied by the Customer's Deposit Held equals the Customer's Share of Interest Received.

2. Navigate to the Main Menu > Accounting > Ledger.

3. Click New > General Journal and record the Interest Received for each deposit:

   1. Select Dr. Account = Bank Account.

   2. Select Cr. Account = Individual Customer Deposit Accounts.

   3. Type the amount of interest the customer received.

   4. Select No VAT.

4. Click Save (button).

Method 2: How to Pay Interest to a Customer

1. Navigate to the Main Menu > Accounting > Ledger.

2. Click New > Customer Transactions > Transfer Customer Deposits.

3. Select Dr. Account = Individual Customer Deposit Account.

4. Select Cr. Account = Customer Account.

5. Enter the Date.

6. Enter the Amount of interest the customer received.

7. Type Interest Received in the Notes.

8. Allocate the amount to the Outstanding Invoices:

   1. Tick the line items in the Outstanding block (bottom right).

   2. Click Allocate (button).

9. Click Save (button).

With Option B, Customer Invoices and Receipts are entered according to standard procedures.

Option C: Raise an Invoice for the Deposit  

Procedure:

• A Customer Invoice is raised for the deposit or the full job when the Quotation is accepted.

• The deposit is credited to the customer's account and allocated to the Invoice.

Advantages of this method: 

• No need to keep track of deposits.

• Complies with Payment-Based VAT (VAT is due or claimable when a payment takes place, not when an invoice is generated).

Disadvantages of this method:

• Income is recognised before the job is done:

  • Which might not comply with IFRS 15,

  • It may create a mismatch between income and expenditure,

  • Gross margins could be overstated.

• Multiple invoices must be issued for the same job.

Choose this option if:

• The organisation is registered for payments-based VAT.

• There is a very small lead time between the deposit being raised and the job being done.

How to Create Customer Invoices for Deposits

1. Navigate to Customer Invoices.

2. Click New (button).

3. Select the customer and fill in the header information: 

   1. Change the Date if necessary.

   2. Select the Customer from the dropdown list next to Customer.

   3. Select the Contact Person from the dropdown list next to Contact.

   4. Select the Representative from the dropdown list next to Rep.

   5. Select a Category from the dropdown list next to Category.

   6. Fill in a Reference and Note in the sections provided.

   7. Select a different Delivery Address (if needed).

      1. • Note: Click the (i) next to the customer to view the customer record > click the eye icon in the top-right corner to open the customer file 

   8. Select the Terms from the dropdown list next to Terms.

   9. Type an Order number next to Order No.

   10. Type a Reference number next to Ref. No.

4. Create the items by selecting an option next to Add:

   1. Custom:

      1. Enter a Description (e.g. Deposit for Quotation QT1021).

      2. Select an Income Account (e.g. Deposits Received).

      3. Select a VAT Option (e.g. Standard VAT).

      4. Enter the deposit amount as a Unit Price.

5. If you made a mistake, right-click on the item to view the context menu and select Delete Item.

6. Click Save (button).

How to Create Customer Invoices where Deposits Were Previously Invoiced

This process is to ensure accurate costing reports.

1. Start the procedure to Create a Customer Invoice either manually or automatically.

2. Once all the line items are created, Add a Custom Item:

   1. Enter a Description (e.g. Less Deposit Paid).

   2. Select the same Income Account as you selected for the deposit (e.g. Deposits Received).

   3. Select a VAT Type.

   4. Enter a Unit Price as a negative amount (to reduce the invoice by the deposit amount).

3. Click Save (button).

With Option C, Customer Receipts are entered according to standard procedures, regardless of whether the receipt was for the deposit or the final payment.

Option D: Invoice the Customer and Request a Deposit on the Invoice  

Procedure:

• A Customer Invoice is raised for the full job when the Quotation is accepted.

• The deposit is credited to the customer's account and allocated to the Invoice.

• When the job is complete, the customer is sent a Statement which shows the outstanding balance.

Advantages of this method: 

• Full transparency: Both the organisation and the customer can keep track of the deposits.

Disadvantages of this method:

• Income is recognised before the job is done:

  • Which might not comply with IFRS 15,

  • It may create a mismatch between income and expenditure,

  • Gross margins could be overstated.

• If the organisation is registered for Invoice-based VAT, VAT becomes due on the full invoice once it is issued.

Choose this option if:

• The organisation is registered for payments-based VAT.

• There is a very small lead time between the deposit being raised and the job being done.

How to Show a Deposit Requirement on an Invoice

This is a non-standard feature. Please contact support if you want this feature included in QuickEasy BOS Professional.

1. Navigate to the Main Menu > Customers > Customers.

2. Double click to open the Customer.

3. Navigate to Accounting (tab).

4. Select the payment Terms from the dropdown list.

   • Note: If there is no term that indicates the deposit requirement, you can create one.

5. Click Save (button).

How to Create Customer Invoices

1. Create a Customer Invoice as per standard procedures.

2. Indicate the deposit requirement in the terms on the invoice.

   • Note: Leave the Status of the Sales Order as Active (instead of marking it Complete).

With Option D, Customer Receipts are entered according to standard procedures, regardless of whether the receipt was for the deposit or the final payment.

How to Show the Deposit Payment to the Customer

1. Record and allocate the deposit payment to the Customer Invoice as per standard procedures.

2. Send the customer a Statement:

   1. Navigate to Accounting > Age Analysis.

   2. Select the Customer:

      1. Type the customer name in the search block, or

      2. Click the Soft Filter Icon in the Account field and select the specific Customer.

   3. Click Output (button) > Email > Customer Statement.

      2. 1. Note: You can also Print and Preview Customer Statements.