Handling Customer Deposits (CD) and Work In Process (WIP) in your accounting system

The steps in the graphic below demonstrate the accounting flow for a project which has three milestone deposits required by the contract. Milestone 1 = $100,000; Milestone 2 = $200,000; Milestone 3 = $300,000.  Each milestone shows the accounting for the Deposit, the Production period, the Accounts Payable cycle, and the Milestone completion entries.

The Accounting Flow: