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Example

When a deposit becomes revenue

Getting paid and earning the money happen on two different dates. In between, the cash is work you still owe, not income. Follow a $10,000 quote with a 30% deposit through every step and see exactly what Kulanz records, and what closes the gap.

Walkthrough

Follow one deposit through five stages

Quote accepted, 30% deposit requested

The customer signs the quote online. A deposit percentage is set on the quote.

A quote is a promise, not a transaction. Nothing is recorded: no one owes anything and nothing has been earned until something is billed.

Quote

Q-1042

Date

Aug 3, 2026

Design and build, full scope10,000.00
Subtotal10,000.00
GST 5%500.00
QST 9.975%997.50
Total due11,497.50

Deposit of 30% due on acceptance.

Account balances after this step

1010 Bank

normally debit

0.00

1200 Accounts receivable

normally debit

0.00

2300 Customer deposits

normally credit

0.00

Nothing owed to the customer.

4000 Revenue

normally credit

0.00

2120 GST collected

normally credit

0.00

2130 QST collected

normally credit

0.00

The entry Kulanz records

Nothing recorded

A quote never touches the books, however large it is.

Walkthrough1/5

Paper trail

What each side ends up with

Every stage leaves a document with the customer and an entry in your books. Read either column top to bottom and you get the same story, told to two different people.

For your customer

What they receive, in order.

  1. QuoteQ-104211,497.50›

    Quote

    Q-1042

    Date

    Aug 3, 2026

    Design and build, full scope10,000.00
    Subtotal10,000.00
    GST 5%500.00
    QST 9.975%997.50
    Total due11,497.50

    Deposit of 30% due on acceptance.

  2. InvoiceINV-20413,449.25›

    Invoice

    INV-2041

    Date

    Aug 5, 2026

    Deposit, 30% of quote Q-10423,000.00
    Subtotal3,000.00
    GST 5%150.00
    QST 9.975%299.25
    Total due3,449.25
  3. ReceiptINV-20413,449.25›

    Receipt

    INV-2041

    Date

    Aug 7, 2026

    Payment received, thank you3,449.25
    Amount received3,449.25
    Paid
  4. InvoiceINV-20888,048.25›

    Invoice

    INV-2088

    Date

    Sep 30, 2026

    Design and build, full scope10,000.00
    Less deposit already invoiced (INV-2041)(3,000.00)
    Subtotal7,000.00
    GST 5%350.00
    QST 9.975%698.25
    Total due8,048.25

    Deposit deducted automatically.

  5. ReceiptINV-20888,048.25›

    Receipt

    INV-2088

    Date

    Oct 6, 2026

    Payment received, thank you8,048.25
    Amount received8,048.25
    Paid

Invoiced 11,497.50 across two invoices: the quote total, charged once. The receipts confirm the same money, they do not add to it.

For your accountant

What Kulanz records, in the same order.

  1. Deposit invoice INV-2041

    1200 Accounts receivable3,449.25 Dr
    2300 Customer deposits3,000.00 Cr
    2120 GST collected150.00 Cr
    2130 QST collected299.25 Cr

  2. Deposit paid INV-2041

    1010 Bank3,449.25 Dr
    1200 Accounts receivable3,449.25 Cr

  3. Final invoice INV-2088

    1200 Accounts receivable8,048.25 Dr
    4000 Revenue10,000.00 Cr
    2300 Customer deposits3,000.00 Dr
    2120 GST collected350.00 Cr
    2130 QST collected698.25 Cr

  4. Settled INV-2088

    1010 Bank8,048.25 Dr
    1200 Accounts receivable8,048.25 Cr

Ends with customer deposits at 0.00, revenue at 10,000.00 and tax collected at 1,497.50.

FAQ

Common questions

The tricky cases, answered.

Why not record the deposit as revenue?›
Because you have not earned it yet. Counting it as revenue before the work is done overstates the period and hides the work you still owe the customer. Every major accounting system treats a deposit as money held, not income.
Why is tax charged before the work is done?›
Because an amount applied against the price is an acompte, and tax follows the payment, not the delivery. Your customer also needs a document to claim their own tax credits, which is the other reason the deposit is invoiced.
What about a refundable security deposit?›
That follows a different rule, and Kulanz does not handle it here. A true security deposit is not taxed until it is applied or kept, so it needs its own kind of document.
What if the deposit line were missing on the final invoice?›
The customer would pay the deposit twice, 3,449.25 too much in this example, and the deposit would never clear from your books. Kulanz adds the line automatically when the quote becomes an invoice.
Which account holds the deposits?›
One you choose. Charts of accounts differ, so Kulanz never guesses: set the Customer deposits account in Accounting settings. Kulanz asks for it when you set up a quote with a deposit, not in front of your customer.
What if the deposit is bigger than the final invoice?›
Kulanz stops rather than creating a negative invoice. That usually means the quote was reduced after the deposit was taken, which calls for a person to decide: a credit note or a refund.
What if the customer cancels after paying the deposit?›
The deposit stays in your books until you refund it or, if the customer forfeits it, move it to revenue, at which point it becomes taxable. Both are done by hand today.
Does the quote itself record anything?›
No. Step 1 of the walkthrough is empty on purpose. A quote is a promise, however large, and never touches the books. The first entry is the deposit invoice.

Want this done for you?

Kulanz handles deposits, invoices and payments like this every day.

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Kulanz, a division of Audla Inc.