Take a deposit before you start the job

Ask for it on the quote

You can put the request on the document itself. On a quote or an invoice, tick Ask for a deposit before the work starts and say how much, as a percentage of the total or an amount. It prints on the PDF as "Deposit requested" and shows on the customer's portal page before they accept.

Asking records nothing. Nothing reaches your books until the money arrives, and then you record it on its bank line as below. A percentage is worked out on the total including sales tax, because that is what the customer is being asked to pay, and the request never changes the total: the whole amount is still what the job costs.

When you convert an accepted quote into an invoice, the request does not carry across, because by then the deposit is usually already in hand and the invoice's job is to apply it rather than ask again. A duplicate of an invoice does not inherit it either, and a credit note cannot ask for a deposit: it gives money back, so there is nothing to ask for.

A plumber does not start a $9,000 bathroom without money up front. When that money arrives it is in your bank, but you have not earned it: until the work is done you owe it back. TALISK_HQ records it as a customer deposit, which keeps it out of your income and off your sales tax return until you invoice the work.

Record the deposit when it arrives

1. On Ledger › Banking › Transactions, find the deposit that arrived and open its details with the chevron at the start of the row.
2. Under Change what this is, click Customer deposit.
3. Pick the customer it came from and click OK.

The line is now recorded, and the customer carries that deposit. You can see what everyone is holding on Invoicing › Clients, in the Deposit held column. To reverse the whole thing, open the line's details again and click Undo customer deposit.

Record a deposit before the bank statement arrives

Money often lands days before the statement does. On Invoicing › Clients, open the customer and use Record a deposit. Enter what arrived and the day it arrived.

Where TALISK_HQ holds it until the bank line turns up depends on one setting on your book, Received payments deposit to:

• Bank account (Cash) — deposit straight to the bank, which is the default, books it to your general Cash and Bank account. That is not the account it really landed in, so until the bank line is matched, the bank you actually banked it into will read short by the deposit.
• Undeposited Funds — hold until the bank deposit lands books it to Undeposited Funds instead, which is a holding account for money in hand that has not reached the bank yet.

Either way, when the real bank line turns up on Ledger › Banking › Transactions, open its details and use Settle customer deposit. TALISK_HQ then moves the money onto that bank's own account and marks the line, so the same money is never recorded twice. What you owe the customer does not change, and neither does your income: the deposit stays in the account your books use for customer deposits until you invoice the work, refund it, or keep it because the customer walked away.

If you had already categorized that bank line, settling it removes the entry behind the category, because the deposit already recorded that money; the line keeps the category you picked, and undoing the settle puts the entry back.

Deposits still waiting for a bank line are listed on the customer's page as Awaiting the bank line, so nothing sits there forgotten.

TALISK_HQ settles a deposit on its own only when the bank line is unmistakable: it is the only waiting deposit of exactly that amount, the line is dated no more than 5 days before the day the money was received and no more than 30 days after it, and no customer receipt or store sale within 5 cents of that amount is still waiting in Undeposited Funds. Anything less certain waits for you to settle it by hand.

A deposit's own bank line is also kept away from your invoices, so the same money is never recorded twice. While a deposit from a customer is still waiting for its bank line, a payment from that customer of the same amount (within 5 cents) asks for a second click if it is dated any time from 5 days before the deposit was received onwards, however late: matching it to one of their invoices stops, names the deposit by the day it was received and its amount, and points you to Settle customer deposit. If it really is a different payment, choose Match it anyway. TALISK_HQ's own matching never pairs such a line with an invoice; it offers it as a suggestion instead, and the review queue says why. A same-amount payment from a different customer is held back the same way only while it is dated within that 5-days-before, 30-days-after span of the deposit, and only from automatic matching.

Three things end this for a deposit: settling it to its own bank line with Settle customer deposit; removing it from the customer's page, which you can do only while none of it has been put towards an invoice; or telling TALISK_HQ that Its money arrived elsewhere (below). Keeping a deposit because the customer walked away does not end it, because the money is still expected on a bank line. Until one of the three, Match it anyway is the way through.

Sometimes a deposit's money never reaches an account TALISK_HQ tracks: you kept it as cash, or it was paid into an account you have not connected to TALISK_HQ. Then no bank line of its own will ever turn up for Settle customer deposit to take. On the customer's page, choose Its money arrived elsewhere on that deposit, say where it went, and choose Stop waiting for it. Nothing is posted: the money is already on Cash and Bank, where recording the deposit put it, which is where money you hold outside your tracked accounts belongs. TALISK_HQ stops waiting for the bank line, the deposit is marked Arrived elsewhere with the reason you gave, and the customer's later payments of the same amount are matched to their invoices as usual. If you change your mind, choose Undo on the deposit and it waits for its bank line again. Once it no longer waits, you can refund it on a money-out bank line like any other deposit.

This is not for money that reached a bank account you track in TALISK_HQ, even as part of a larger deposit with other money in it. That bank line already counts the money, and TALISK_HQ cannot yet settle part of a line to a deposit, so closing the deposit would count the money twice; leave it waiting and use Match it anyway when you match that customer's payments. It is only for a deposit recorded to Cash and Bank: one held in Undeposited Funds still needs Settle customer deposit, or removing. It is not available on a deposit that a bank line has already settled part of. And it is not for money that arrived before your books' start date, which your opening balances already include, or for money that never arrived at all; remove the deposit instead.

Settle customer deposit needs the bank line to cover what is waiting exactly. A line that arrives short needs the fee entered (below) or, if the customer sent the deposit in two transfers, an amount entered so this line settles part of it. A line larger than what is still waiting cannot be settled to that deposit.

If the bank line matches, to the cent, a customer receipt or a store sale that is still waiting in Undeposited Funds, Settle customer deposit stops and says so. That line most likely brings in that money, so settle it against the receipt or the sale instead. If that receipt will never reach the bank on its own line, choose Settle it to this deposit anyway.

A bank line from before your books' start date can't settle a deposit recorded after it. That money is already counted in your opening balances, so TALISK_HQ refuses the settle and never pairs the two on its own; the deposit waits for the bank line that really brought it in.

If a deposit you recorded never actually turned up, remove it from the customer's page rather than refunding it, because no money left your bank. Do that before you use it: once a deposit has been put towards an invoice, TALISK_HQ has no way to take it back off that invoice yet, so it can no longer be removed either.

If the money arrives short because the receiving side took a fee, settle the line for the fee as well: enter what the customer sent and the fee that came off it, and TALISK_HQ books the fee to Payment Processing Fees. Do not reduce the deposit itself to match the bank line, because the customer is still owed what they sent you.

If you already recorded a deposit early and then try to record the same bank line as a new deposit, TALISK_HQ stops you and names the one you already have. If it really is a second deposit from that customer, choose Record this as a separate, second deposit.

A deposit in another currency

If a customer pays you in US dollars, or in euros, record it on the bank line it arrived on, in the account you hold that money in. That line needs its own exchange rate first: until the rate has landed TALISK_HQ will say so rather than guess, because the figure it works out on the day is the one your books carry from then on. TALISK_HQ keeps two figures: what the customer sent, and what that was worth in your own currency on the day it landed. The second figure is the one your books carry, and it stays put. If the exchange rate moves afterwards, what you owe the customer back does not change in your accounts.

You see both on the customer's page: the amount in its own currency, with your own currency in brackets beside it.

The difference is worked out when the deposit is spent, not while it is held. So when you apply it to an invoice, or give it back, TALISK_HQ works out the exchange gain or loss on that day and records it. Between those two moments there is nothing to do.

Two things to know:

• A deposit in another currency is applied or given back in full, not in parts. If you need to spend part of one, record the deposits as separate amounts as they arrive.
• You can apply it to an invoice priced in that same currency, or to one priced in your own currency. You cannot apply it to an invoice priced in a third currency.
• It cannot be kept as income when a customer walks away, the way a deposit in your own currency can. See below for why.

If you want to see what the still-held deposits are worth at today's rate, your accountant's year-end pack lists them under open foreign balances. That is a statement for them to read, not an entry in your books.

Use it when you invoice the work

1. Open the invoice on Invoicing › Invoices.
2. Click Apply deposit, which shows what that customer has on deposit.
3. Enter how much to use and click Apply deposit.

TALISK_HQ offers you the smaller of the deposit held and the balance due, so you cannot apply more than either. A part of a deposit can go on one invoice and the rest on the next, which is what happens on a job billed in stages.

The Apply deposit button only appears on an invoice written in your book's own currency. A deposit is held in your book's currency, so putting it against an invoice priced in another one would settle the invoice and the accounts at two different values. On a foreign-currency invoice, record the customer's payment on the invoice itself, or give the deposit back and invoice the work in full.

Give it back if the job does not happen

Find the withdrawal where you sent the money back, open its details, and click Deposit refund under Change what this is, then pick the same customer. The picker only lists customers who are actually holding a deposit, and TALISK_HQ refuses a refund larger than what they have. Their deposit goes back to zero and the two bank lines cancel out.

Why no sales tax is charged up front

A deposit is not payment for a sale until you apply it to one. The Excise Tax Act says so directly, and the CRA treats it the same way, so the GST or HST is charged on the invoice rather than on the money arriving. That is also how QuickBooks Online handles a retainer, so your accountant will recognise it.

The tax then lands once, on the invoice, at the moment you bill the work. Applying the deposit moves no tax at all: it simply pays that invoice down.

One thing worth checking with your accountant: if the money is really a prepayment for a specific job that is already agreed and settled, rather than a deposit against work that might still change, the CRA can treat it as payment straight away. TALISK_HQ cannot tell those apart from what it can see, so if a large sum arrives for a job that is already fully specified, ask.

Where a held deposit shows up

Four places, and none of them treats it as a payment:

• Invoicing › Clients, in the Deposit held column, and on the customer's own page under Deposits paid in advance with each deposit listed.
• The AR Aging report, on its own line under the total, labelled Deposits held (not owed to you). It is not taken off what the customer owes, because a deposit is money held against work you have not billed yet. That line is on the screen only: it is not in the aging PDF, the aging CSV, or the emailed reporting pack, because those documents are frozen as at the day they were produced and a deposit balance is a live figure.
• The customer's own portal, on the page listing their documents and on each invoice. They can see it and nothing more: applying, refunding and keeping a deposit are all your decisions. The balance they are asked to pay on an invoice is unchanged by it, and the page says so.
• The year-end pack for your accountant, as customer_deposits.csv: one row per deposit still held, with the customer, the date it arrived and the amount still behind it. Where part of a deposit has already gone on an invoice or been refunded, the row shows what is left and says so. That file lists today's holdings rather than the year end, because TALISK_HQ keeps no history of who was holding what; it says which date it is as at, and quotes the year-end balance of the account beside it.

Why this is not a customer credit

They sound alike and they are different events. A customer deposit is money you hold before a sale happens. A customer credit is money you owe back after one went wrong, such as a duplicate payment or a cancelled invoice they had already paid. They sit in different accounts, they carry different tax treatment, and your accountant reads them as separate lines, so TALISK_HQ keeps them apart. If a customer paid twice, use Customer credit instead.

If a customer walks away and you keep the deposit

The terms of some jobs let you keep a deposit when the customer cancels. It stops being money you owe them and becomes income, so this is the one deposit event that does charge sales tax.

1. Open the customer on Invoicing › Clients.
2. Under Deposits paid in advance, find the deposit and click Customer walked, keep it.
3. Choose the income account it should be recorded in, then click Continue.
4. Read what TALISK_HQ is about to do and click Forfeit deposit.

The account is your choice and TALISK_HQ will not pick one for you. There is no document behind a forfeited deposit saying what was sold, so there is nothing to work it out from. Most trades use their ordinary sales account; some keep a separate one so cancelled jobs are easy to find at year end. Ask your accountant if you are not sure.

A deposit taken in another currency cannot be kept as income yet. TALISK_HQ will say so on the deposit rather than offering the button. The sales tax inside a kept deposit is worked out of the amount and goes on a return, and which amount that is, what the customer sent or what it was worth in your own currency on the day, is a question your accountant should answer rather than TALISK_HQ guessing at. Refund the deposit, or apply it to an invoice.

One kind of account is not offered, and TALISK_HQ refuses it if you send it anyway: an account you have marked on your chart of accounts as income that is not a sale. Interest on a savings account is the usual one, along with an exchange gain or a cash rounding. Those are left out of the sales figure on your GST return on purpose, because they are not money you earned by supplying anything. A deposit you keep does charge sales tax, so recording it in one of those accounts would put tax on your return with no sales behind it, and the return would not add up. Pick a sales account instead.

TALISK_HQ offers this only on a deposit that is still held in full. If part of it has already gone on an invoice, or been refunded, reverse that first.

The tax comes out of what they paid

If a customer paid you $1,000 and you keep it, that $1,000 is the whole of it. The tax is not added on top, because there is nobody left to collect it from.

A deposit you keep is treated as already including GST or HST, and in Quebec QST as well, and each one is worked out on its own rather than at a single combined rate. GST or HST comes out at its own rate: $5 in every $105 where GST is 5%, and $13 in every $113 in Ontario. QST comes out of the same full amount separately, at $9.975 in every $109.975. So $1,000 kept in British Columbia is $47.62 of GST and $952.38 of income; in Ontario it is $115.04 of HST and $884.96 of income; and in Quebec it is $47.62 of GST, $90.70 of QST and $861.68 of income.

TALISK_HQ charges no PST on a deposit you keep, even if your books are registered to collect it. No sale took place, so there is nothing for PST to apply to: British Columbia says so directly, and says that PST collected on a forfeited deposit was collected in error. If you are registered in another province and your accountant reads its rules differently, tell us.

Whatever tax is charged goes on your next sales tax return along with everything else you collected that period.

If the customer is marked tax exempt, or your books are not registered for sales tax, no tax is charged and the whole amount is income.

This one cannot be undone

Applying a deposit or refunding it can be reversed. Forfeiting cannot, because it recognises income and puts tax on a return you may have already filed. TALISK_HQ asks you to confirm it for that reason, and it names the customer, the amount, the account and the tax before you do. If you keep a deposit by mistake, your accountant corrects it with a journal entry.

Only the owner, or a bookkeeper with full access, can keep a deposit. Recording one, applying one and refunding one are all everyday jobs that anyone with edit access can do.