Has anyone come up with a good way to manage customer deposits? If you have a good idea on how to manage these today let me know.

Most of my clients just add deposits to AR as unapplied cash. This isn't appropriate as deposits are a liability not a deduction from other receivables. They also mask the real outstanding balances and most banks will not accept an aged receivable report with lots of credit balances (deposits) on it. Later, after the invoice is posted, they have to do another cash batch to apply the unapplied deposit.

Even if the deposit is recorded to the customers account there is no way to link it to the invoice when the invoice is created. Ideally you want the invoice to show the net (of deposit) balance owing. Even better if that eliminates the need to manually match the deposit (cash receipt) with the invoice after posting.

Ideally there should be some way to manage unapplied cash so that it can be reported separately from other transactions and posted to a separate control account. Then when an invoice is created the Payment process should have an option to apply the unapplied payment. This would allow the invoice to be printed with a net of deposit balance owing and eliminate the need to match the payment to the invoice in a separate transaction.