Client Deposits Confused?
Do you collect deposits before starting work? Don’t record them as income too early. If you get paid upfront for a project or retainer, it’s tempting to call it revenue right away. But until the work is performed, it’s actually a liability—money you owe in services or goods. Recording it early can inflate your income and tax bill.
QuickBooks allows you to track deposits as “Unearned Revenue” or “Customer Deposits” and recognize it later when you actually earn it. A Chandler CPA (like us) can help you set this up so your income reflects reality, not just cash in the door.
Questions? Call us at 480 747 3935 or visit our Monthly Accounting Services page, too!
