Customer deposits are assumed to be held more or less indefinitely and are typically due to a bad credit situation (real or potential).

Customer pre-payments, on the other hand, are different. They are typically paid before some particular work is done and immediately credited to the account. In these cases, the money received (that is, the pre-payment) should be handled as a "payment" and NOT as a "deposit". Handling it this way will create a credit on the account which will be covered when the invoice for the completed work is entered.