We have made equipment purchases for $x. We have paid 50% deposit. Equipment is not yet received.How do I categorise the deposit payment?

Hi there.

It's great to see you here in the Community. I'd like to address your concern about how to handle these deposits in QuickBooks Online.

We can set up a retainer or deposit in your QBO. This can be considered a liability since your business retains the money from the deposit. Thus, it doesn't belong to you until it's used to pay for services. You can turn that liability into money once you invoice the customer and get paid.

To do so, you'll need to create a liability account first to track the amount of the deposits you receive from the customers. I'll guide you on how:

1. Go to Settings, then select Chart of accounts.
2. Tick New.
3. From the Account Type ▼ dropdown menu, choose Current liabilities.
4. From the Detail Type ▼ dropdown menu, Client Trust Accounts - Liabilities.
5. Enter a Name for the account (for example, Trust Liabilities) or accept the suggested name.
6. Select a Default GST Code, enter an Unpaid balance, and an as of date.
7. Click Save and Close.

From there, create a retainer item. Here's how:

1. Go to the Gear icon, then choose Products and services.
2. Click New.
3. From the Product/Service information, select Service.
4. Enter a name for the new product or service item.
5. From the Income account ▼ dropdown menu, select the liability account you created.
6. Tick Save and close.

Once done, you can now follow Steps 4 to 6 in this article for a detailed step-by-step process. Although Step 3 in this reference isn't necessary, you can proceed if you keep money from the customer retainers and deposit it in a different trust account: Record a retainer or deposit.

About categorising the deposit payment, you can choose the account where you want to post the payment. However, it's best to consult your accountant for further guidance about the best process to handle these transactions.

On top of that, you might want to read through this resource to learn more about organising your transactions in QBO: Categorise and match online bank transactions in QuickBooks Online.

Please let me know if you have additional questions or concerns about deposits in QBO. I'll be right here to help. Wishing you the best.