Security deposit withheld

Riyad Alnwili (4 Points)

17 November 2015  

I am puzzled at this transaction, so i hope that someone can shed some light on this.

I have a client who I have agreed with on a 5% security deposit that they will withheld from every payment on every invoice and pay the accumelated security deposit when the contract concludes (+2 years)

Here is an example:

I submit an invoice for $500,000
I get paid $425,000
Client withhelds $25,000 as 5% Security deposit

I use an online accounting system (Zoho Books) so I reconcile the accounts with my bank transactions.
How do I enter this security deposit seperately from my invoices? Do I create a seperate invoice for it?

Thank you