How to Record a Customer Prepayment in Quickbooks

In this tutorial, we discuss a two steps method to record customer prepayments in QuickBooks online. By following this method, you will be able to work around a software limitation since QuickBooks does not support customer prepayments. There is a feature in QuickBooks to receive deposits from a customer; however, this way, you would have to recognize the sale at the moment funds are received. In this video we show you a way to receive the customer prepayment as a liability, which will allow you to recognize the sale when the invoice is created at a later time.