How do I enter a deposit invoice from a trade partner?
When a trade partner sends a deposit invoice, there are two things to get right when you enter it.
Leave off retail sales tax
If you charge retail sales tax, do not include it on this invoice, per CRA and IRS rules.
Enter only the deposit amount
If the trade has sent you the full invoice with a 50% request, do not enter the full amount. Enter only the deposit or payment amount. Otherwise the rest will sit on the aged payables (A/P) report in QBO until the balance of the work is invoiced. That falsely shows your payables position, because the work isn't complete and the balance isn't due yet.
Both are set on the expense: the amount in Cost $, and the tax in Tax and Tax $.
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