Need help with down payments?

When a customer makes a down payment on a piece of equipment, that money needs to be tracked and eventually applied to the final invoice once the equipment is delivered. But what's the best way to handle these down payments? A few things to keep in mind would be:

  • To have a Liability Account: because until the product is delivered there is a liability
  • To setup a Control Account: this will be used for the inventory item
  • To have an inventory item called Down Payment: this will be what the down payment is applied to
  • To apply the down payment to the final invoice: this is done by entering a line item for the down payment as a negative line on the invoice

Obviously, this is a brief summary, but rest asssured that we have a full write up on handling this specific scenario. Where do you get that you ask? Right here of course. Simply click the box below to read more!