Collecting Customer Deposits and Managing Sold Estimates

[ZachHawk]

Hello ServiceTitan Community!

New to ServiceTitan here, in the Garage Door industry! We're in need of some extensive help and recommendations on how you all record taking a customer deposit. Putting the Pricebook aside, we all understand how customizable the door industry is. Therefore, the majority of our retrofit installs are ordered, and we require a downpayment (Deposit) before we order the door.

Here's the issue: When we send out an estimate to a customer, or when they're ready to proceed with a job, we require a 50% deposit on all doors we sell before we can order & book the job. We currently have to convert the "Sold Estimate" (which, in my opinion, should be called an "Accepted Estimate") to a job and create an invoice before we can collect a 50% deposit. We need to avoid booking the job and creating an invoice until we have that deposit (CASH) in hand because there are folks out there who, unfortunately, might not follow through once a job is "Sold." Then, we end up with both a "Job" and "Invoice" sitting out in limbo.

We can't continue with this workflow for several reasons:

Accounting and Reporting Implications:

• Our current process is throwing our accounting off balance tremendously and causing a lot of extra manual entries. When we book a job, create an invoice, and then apply 50% of the payment, it misrepresents our Accounts Receivable. For instance, a $100K job with a $50K deposit should still show $100K in Accounts Receivable, not $50K. This affects not only our internal tracking but also our external financial reporting and obligations. When receiving a deposit, that does not guarantee that the job will be performed. Therefore, there is no liability to offset the deposit, which is HIGHLY important from a bookkeeping standpoint and for what we need to report to our accounting team.
  
• NERD ALERT: When taking a deposit, you debit the bank and credit customer deposits. Then, when the job is complete and the full amount has been collected, we debit the bank again, credit sales revenue, debit customer deposits, and credit AR. This is the standard accounting procedure, and currently, I have not found a way to streamline this process.

Managing "Sold" Estimates and Unbooked Jobs:

• We have a 30-day policy once an estimate is presented to a customer. We know a lot can change in 30 days, product-wise and price-wise. If the customer accepts the estimate and it moves from "Unsold" to "Sold" status, this complicates our tracking of when that period is voided because it all ultimately derives from when the deposit is collected. This leads to a lot of backtracking and checking past "Sold Estimates," which is inefficient and time-consuming.
  
• For example, if a customer accepts an estimate, we book the job and send the invoice to collect our deposit. If the customer doesn't make their deposit until day 31 from when the estimate was presented, we then face the awkward situation of having to refund the customer, explaining that their payment wasn't made within the 30-day window of the estimate presentation. Worse case, we might have to explain a price increase or that a product is no longer available, which is very unprofessional on our end.

A simple solution would be to have a payment link somewhere in the estimate email, or the ability to charge a percentage when the customer accepts the estimate online. Rather than applying it to the invoice, there NEEDS to be some sort of mapping where it is applied to customer deposits (NOT THE INVOICE) for accounting purposes.

Any advice on this would be extremely helpful. Thank you for coming to my Ted Talk, lol.

[ZachHawk]

@Sheena_Palacios I have not! But I sure will!

It doesn't seem that we have access to that feature, but if that is our only option to make this work, I will reach out to support! Thank you for your feedback!

[Sheena_Palacios]

Yes, that feature requires account configuration so reach out to your CSM team to learn more about it!

[ZachHawk]

Unfortunately, I do not feel like this is the best solution. 

[msjewell23]

Hi Zach! Just wanted to see if you tried progress billing and found it helpful? This is what we do at our business and although not a perfect workflow, it keeps our AR in check and our jobs as organized as can be!