Summary
This article explains how to set up and manage deposits and credits for appointments. It covers how to apply taxes to both deposits and final payments, how to record cash or card transactions correctly, and how to apply credits as positive values. It also shows how to use appointment statuses to track deposits and credits accurately in reports.
Important Tax Consideration
When dividing the total cost of an appointment to collect a deposit, taxes must be applied correctly.
There is no way to collect a tax-free deposit and still charge the full tax on the total appointment price.
Example
Appointment value: $500
Tax: 8%
Total price: $540
If you take a tax-free deposit of $250, the remaining appointment balance becomes $250, taxed at 8% = $270 total.
This causes a $10 tax shortfall. To remain compliant:
1. Either charge tax on the deposit,
2. Or accept that the final tax collected will be slightly lower.
Most businesses choose to apply tax to the deposit to ensure correct accounting and avoid undercharging taxes.
Side Note
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Setting Up A Deposit Status
From the ZenMaid Dashboard, go to Settings and click on Appointment statuses under Scheduling.
Create a new status, such as "Deposit," by clicking the + Add Status button, then click Save Changes.
Side Note
To have the appointment appear on your calendar, payroll, and work orders, click the "+" icon next to the status and select your preferred boxes.
Create A Deposit Appointment
Next, create a new appointment with the status "Deposit" next to the appointment for which you want to charge a deposit.
In the Billing section, fill in:
Deposit amount
Tax percentage
After creating the deposit appointment, you can charge it using an invoice, credit card, or cash payment.
From there, you can create another appointment to issue an invoice for the remaining balance of the service, using the same process you used for the deposit invoice.
Side Note
If you apply tax to the main appointment, you must also apply tax to the deposit. Once an appointment is booked, the deposit counts as a partial payment for that taxable service. Sales tax is therefore required on both the deposit and the final balance to ensure the total tax collected matches the full taxable amount. Only fully refundable deposits that are not yet linked to a service can be tax-free.
Charging tax only on the remaining balance would result in under-collecting total taxes owed.
Managing Prepaid Credits in ZenMaid
Important Note on Taxes
Always keep the appointment at its full price rather than zeroing it out or applying a discount to reflect the credit. Zeroing out an appointment or applying a 100% discount will result in $0 tax, which may not be compliant depending on your local tax laws. Keeping the full price ensures your tax reports remain accurate. If you are unsure how prepaid credits should be handled for tax purposes in your area, consult your accountant.
What Is a Prepaid Credit?
A prepaid credit is an amount paid upfront to cover multiple future appointments in full, not tied to any single booking.
A prepaid credit can come about in several ways. A customer might formally request to prepay for future appointments, hand over cash, send a bank transfer, or pay via check.
Step 1: Create the Prepayment Invoice
When a customer wants to prepay for future appointments, create an invoice in ZenMaid for the agreed prepaid amount and collect payment. You should also record this payment in your accounting software (such as QuickBooks) as a liability, not income, since the balance is owed in services and has not been earned yet.
Step 2: Set Up an Appointment Custom Field
To track the remaining credit across appointments, create an Appointment Custom Field called something like "Prepaid Credit Balance." A text field works well for this since you will be logging a running balance. This field will serve as your record of how much credit has been applied and how much remains.
For instructions on creating Appointment Custom Fields, refer to the Custom Fields help article:
Step 3: Apply the Credit to Each Appointment
For each appointment covered by the prepaid credit:
Keep the appointment price at its normal rate so that tax is calculated correctly on the full service amount.
Mark the appointment as paid manually, using a payment method such as "Other" to indicate it was covered by the prepaid credit.
Update the Prepaid Credit Balance custom field on the appointment to reflect the running balance, for example: "Prepaid total: $X. Applied: $Y. Remaining: $Z."
Repeat for each subsequent appointment until the balance is exhausted.
Tracking the Balance
Since ZenMaid does not automatically deduct from a credit balance, you are responsible for keeping the custom field updated on each appointment. It is also a good idea to keep your accounting software up to date so your books reflect when the prepaid liability is being drawn down and recognized as income as each appointment is completed.
Example
Prepaid balance: $500
Appointment price: $100
Tax (8%): $8
Total: $108
Status: Marked as paid (prepaid credit)
Custom field: "Prepaid total: $500. Applied: $108. Remaining: $392.00"
Keywords
Deposits
Deposit
Credits
Credit
Taxes
Partial Payments
Cash and Card Transactions
Appointment Statuses
Billing Setup
Accurate Reporting
Payroll Tracking
Compliance