If you’re looking to record advance deposits in your Striven system, here’s an example of how this can be accomplished.
Advance deposits should show on the Balance Sheet as a Liability since they represent money received prior to invoicing. As such, they need to be recorded on transactions properly to ensure your financial records are accurate.
Create the GL Account
The first step will be to create the GL Account for the deposit Liability if you do not already have one established in your Striven system. You can accomplish this by visiting the Chart of Accounts page and clicking the Add GL Account button.
You will want to name the account clearly to indicate its purpose and select Other Current Liability as the Account Type. Then click Save & Close.
Create the Items
After you have created your GL Account, you can go on to the next step of creating the new Items you will be using to record the deposit. These two (2) Items will be used as Line Items on your Sales Order along with the other Line Items for which you will be invoicing the Customer.
From the Items List, click the Add button to create a new Item.
For example, the first Item you will need is Advance Deposit Received. This will be a Deposit type Item and the Accounting designation will be set by selecting the GL Account you created related to deposits.
The second Item you create will be Advance Deposit Redeemed. This will also be a Non Inventory type Item and should have the same Accounting designation as the first Item.
Create the Sales Order
Now that you have your GL Account and Items created, you can use these to record your advance deposits on your Sales Orders.
When you have added all of the necessary Line Items to your Sales Order, add the Advance Deposit Received and Advance Deposit Redeemed Items to your Sales Order as follows:
- Advance Deposit Received: This Line Item should have a positive quantity of one (1) and the Unit Price should be the amount of the deposit.
- Advance Deposit Redeemed: This Line Item should have a negative quantity of one (-1) and the Unit Price should also be the amount of the deposit.
Adding both of these Items to the Sales Order with the positive quantity and the negative quantity will cancel each other out and not affect the Sales Order total, but will still record the deposit.
When you receive the deposit, you will Invoice the Sales Order for only the Advance Deposit Received Line Item at that time. When the transaction is completed, you will then Invoice the Sales Order for the remaining Line Items, including the Advance Deposit Redeemed.
Example Scenario:
You are a Computer Retailer. A Customer has requested a $1000 computer from your company which you have to procure from another store and you wish to collect 50% as a deposit for this computer. This means your Sales Order should have:
- The Line Item for the computer with a quantity of one (1) and Unit Price of $1000.
- The Advance Deposit Received will have a quantity of one (1) and the Unit Price will be $500 (which is 50% of the $1000).
- The Advance Deposit Redeemed will have a negative quantity of one (-1) and the Unit Price will also be $500 (which is the other 50% of the 1000).
When the Customer pays you the deposit of $500, you will Invoice the Sales Order for:
- The Deposit Received Line Item
Invoice #1:
When you provide the computer the Customer, you will then Invoice the Sales Order for the remaining Line Items, which would include:
- The Line Item for the computer
- The Deposit Redeemed Line Item
Invoice #2:
And that’s it! 
Note: This method of recording Advance Deposits in Striven is a suggestion. That said, it is essential to consult with your accountant to ensure that this approach aligns with your company’s accounting guidelines.
Please do not hesitate to reach out to Striven Support with any questions you may have about this process.
Special thanks to our valued Subscriber @AshleyCrest for sharing this process with us so that we can share it with all of you!