How to Record a Customer Deposit Paid by e-Transfer

To record a customer deposit paid by Interac e-Transfer, first confirm what the contract says the money is for. Keep the completed transfer in a customer-deposit register linked to the quote, contract, order, or booking. Record the payer, amount, date, status, Interac reference, deposit terms, GST/HST decision, bank deposit, and what eventually happened to the money: applied to an invoice, refunded, or forfeited.

Do not automatically record every amount labelled “deposit” as sales revenue or GST/HST collected. A true deposit, a partial invoice payment, a retainer, and an advance payment can have different accounting and tax timing even when the customer uses the same payment method.

Is a Customer Deposit the Same as an Invoice Payment?

Not necessarily. The name in an e-Transfer message does not decide the treatment; the agreement and the facts do.

• A deposit may secure a booking, order, or future purchase before the amount is applied to the price.
• A partial or progress payment immediately pays part of an amount already due under an invoice or agreement. Use the partial e-Transfer payment workflow when several completed transfers settle one invoice.
• A retainer can have its own contractual and professional-accounting treatment.
• An overpayment is more than the customer was required to pay and may create a credit or refund.
• A refundable hold may remain money owed back to the customer until a stated event occurs.

This distinction matters for bookkeeping, GST/HST, cancellations, and customer balances. Keep the contract wording and have a qualified accountant decide the treatment when the amount is material or unclear.

The Canada Revenue Agency says most businesses report income using the accrual method. That means the date cash enters the bank is not always the date the business has earned the income. Review the current CRA guidance on accounting for business earnings instead of choosing the period from the e-Transfer notification alone.

What Should a Customer-Deposit Register Include?

Create one row for each transfer and link it to the underlying customer agreement. Record:

• Customer name and displayed payer name, when different
• Quote, contract, order, booking, project, or invoice number
• Description of the goods or services
• Deposit purpose and the exact cancellation or refund terms
• Amount requested and amount received
• e-Transfer date, final status, and reference number
• Date the bank confirmed the deposit
• Whether the amount is refundable, non-refundable, or conditional
• Bookkeeping classification selected by the business or its accountant
• GST/HST and provincial sales-tax treatment, including the decision date
• Customer acknowledgement or receipt number
• Date and amount applied to an invoice
• Date and amount refunded, with the refund reference
• Date and reason an amount was forfeited, if applicable
• Remaining customer-deposit balance

Keep the signed agreement, quote, invoice, customer correspondence, transfer notification, and bank evidence with the register. The CRA’s business-record guidance says income records need the date, amount, and source, supported by original documents.

How Do You Record an e-Transfer Deposit From Receipt to Final Use?

1. Confirm the terms before classifying the money

Read the agreement that existed when the customer paid. Identify what the payment reserves, when it becomes part of the purchase price, whether it can be refunded, and what happens if either party cancels.

Do not turn a vague note such as deposit into an accounting conclusion. If the customer is paying an issued invoice or an amount already due, it may be a part payment rather than a deposit. If there is no written agreement, document what the business and customer confirmed through a trusted channel.

2. Capture the transfer without assuming it settled

Record the payer, amount, date, displayed status, and Interac reference when available. Then open the financial institution through its known app or website and confirm that the money reached the intended account.

One transfer can generate several emails. Count the payment once, using the reference, amount, payer, and status to connect the notification sequence. If it is pending, declined, cancelled, expired, or replaced, use the e-Transfer status reconciliation workflow and leave the customer balance open until settlement is confirmed.

3. Put the amount in a deposit register

Link the completed transfer to the customer and agreement. Keep the full payment event intact even if the amount will later be allocated across several invoices or deliverables.

Keep unapplied amounts visible. Do not hide a customer deposit among ordinary sales or mark the final invoice paid before applying the amount.

4. Acknowledge exactly what was received

Give the customer a clear written acknowledgement that identifies the business, customer, amount, date, payment method, and purpose. State whether it is a deposit, part payment, or another amount according to the agreement.

Avoid promising a tax or refund result that has not been reviewed. Acknowledging receipt does not change the contract, and an e-Transfer notification does not replace a sales invoice or credit document.

5. Review GST/HST at the correct event

The CRA’s current GST/HST guidance for deposits says not to collect GST/HST when a customer gives a deposit towards a taxable purchase. The tax is collected on the deposit when the deposit is applied to the purchase price. If the customer does not make the purchase and loses the deposit, the forfeited deposit is subject to GST/HST under the calculation described by the CRA.

That rule depends on the amount actually being a deposit. A part payment or advance payment can follow different timing. Record who made the decision, the source used, and the date. Do not calculate tax from the e-Transfer total or assume the message field proves the classification.

Registration, place-of-supply rules, exempt supplies, Quebec sales tax, and industry-specific rules can change the result. Use current guidance for the transaction.

6. Apply the deposit to the sale explicitly

When the contractual event occurs, create or update the sales invoice and apply the exact deposit amount. The audit trail should show:

1. the original deposit transfer;
2. the deposit balance before application;
3. the invoice or sale to which it was applied;
4. GST/HST recorded at the appropriate time; and
5. the remaining amount due or customer credit.

Do not edit the original transfer date or reference to make it look like a new payment. The transfer documents when the money moved; the application entry documents when and where the business used the deposit.

For ordinary customer receipts that are already payment for goods or services, use the guide to classifying customer e-Transfers as business income.

7. Record a refund or forfeiture as a separate event

If the deposit is refunded, preserve the incoming transfer and create a separate outgoing payment linked to it. Confirm the recipient through a trusted channel, record the new reference and status, and reconcile the withdrawal. The customer refund workflow explains how to preserve both sides of the trail.

If some or all of the deposit is forfeited, keep the agreement, cancellation evidence, calculation, customer communication, and tax review. Do not relabel it as earned revenue solely because the customer stopped responding.

8. Reconcile deposit balances every month

Compare the register with bank deposits, sales invoices, customer statements, refunds, and the general ledger. Investigate:

• A bank deposit with no identified customer or agreement
• A register entry with no completed bank deposit
• A deposit applied twice
• An invoice that ignored an available deposit
• A negative or stale customer balance
• A refund recorded without the original receipt
• GST/HST recorded before or after the event supported by the review
• A deposit still unapplied after the project ended

The unapplied register should agree with the corresponding bookkeeping control account after documented adjustments. Do not clear differences with an unsupported sales entry.

How Should You Handle Common Deposit Edge Cases?

One transfer covers several projects

Keep one transfer row, then allocate the total across the projects according to the customer’s written instructions. The allocations must add back to the original payment.

Several transfers make up one deposit

Keep each transfer with its own reference and status. Link all completed transfers to the same agreement and total only the amounts that settled.

Someone other than the customer sends the money

Preserve both names and document the relationship. Confirm the customer, purpose, and refund instructions; do not overwrite the displayed payer to make the records match.

The customer overpays

Record the full amount received. Separate the intended deposit from the excess, then follow the customer e-Transfer overpayment workflow to document whether the business will refund it or hold an authorized customer credit.

How TransferLog Helps With Customer-Deposit Records

TransferLog organizes transaction details found in supported incoming and outgoing Interac e-Transfer notifications from connected Gmail, Outlook, and iCloud inboxes. You can search and filter records, assign categories, and export CSV or PDF on the Pro plan.

Use the export as the payment side of the customer-deposit register, then match it to agreements, invoices, bank deposits, tax decisions, and refunds. TransferLog does not interpret contracts, decide whether an amount is a deposit, calculate GST/HST, create invoices, access bank accounts, or maintain a customer subledger.

For year-end support, follow the Canadian e-Transfer tax-record checklist.

Official Sources

• CRA: GST/HST in special cases—deposits
• CRA: Accounting for your earnings
• CRA: Business records
• CRA: What records businesses have to keep
• Interac e-Transfer help

This article provides general record-keeping information, not tax, legal, or accounting advice.

Organize customer-deposit e-Transfer notifications with TransferLog. Start free, then reconcile the export with your agreements, invoices, and bank records.