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Frequent Contributor *

Client retainer (invoicing and payments)

Hey everyone

 

I have an ongoing contract with my client.

 

The balance is adjusted every month as Client payments are received and my new charges added.

 

Payments received from the client are marked as sales receipts and matched with bank statements when updated online.

 

I have sent one invoice so far which includes the outstanding balance to date (shown as a positive number of the invoice) and payments received to date (show as negative number on invoice). 

 

  1. I am unsure how to mark off payments made against the invoice since it was sent
  2. what happens at the end of the month when I need to send another (updated invoice) showing new payments received and new charges added
  3. how do they all get added and removed from the client trust account - liabilities.

Thanks for any help you can give.

 

Thanks

Gavin 

Solved
Best answer 05-29-2018

Accepted Solutions
QuickBooks Team

Re: Client retainer (invoicing and payments)

Good to see you again, Gavin.

 

You are definitely correct on all points. I'd like to add something for number 5. The statement doesn't only show invoice #1004, but all the outstanding invoices.

 

You can learn more about statements here: https://community.intuit.com/articles/1145736.

 

Please don't hesitate to reach out to me if you need more help.

9 REPLIES 9
QuickBooks Team

Re: Client retainer (invoicing and payments)

Hello, Gavin.

 

Good to have you back. How's your business going?

 

For number 1 and 2 , are you trying to match the payments in the banking page? Also, are you trying to determine the exact balance at the end of the month?

 

For number 3, are you referring to how the retainers affect the trust account? When recording the retainer through a sales receipt, it will increase liability trust account. When it's time to apply the retainer, this will decrease the account.

 

I look forward to helping you again.

Frequent Contributor *

Re: Client retainer (invoicing and payments)

Hi JamesPaulE,

 

Thanks for responding again. 

 

Yes, you are correct for 1 & 2.

 

For 3 – I understand that when I record the client payments received as sales receipts they increase the Client Trust Account and when I apply the retainer on the invoice it reduces it.

 

My questions are:

1. Do I mark any payments received against the invoice that has been sent? The invoice is suggesting me to mark payments received.
2. At the end of the month when it is time to bill the client an updated invoice, do I send a new one?

3. If so, what happens with the current invoice that is only part paid?

 

So confused...

 

Thank you

Gavin

 

Anonymous
Not applicable

Re: Client retainer (invoicing and payments)

Hey G_Cooper,

 

I've had a look at our Community and found that we have a great article that takes you through the process of recording client retainers and then applying them to invoices when the times comes.

 

If you have a look at point 4 of the workflow, this specifically deals with using the deposit or retainer to pay for the invoice created. It also has a few links to other useful information such as running reports to see the remaining balances for each customer.

 

Let me know if you have any further questions

Frequent Contributor *

Re: Client retainer (invoicing and payments)

Hey GillH

 

Thanks for taking time to find that article for me.

 

I have read it but unfortunately it does not answer any of my questions 1 - 3.

 

Cheers

Gavin

Frequent Contributor *

Re: Client retainer (invoicing and payments)

Hey all,

 

To follow is further clarification about my situation.

 

I billed invoice #1004 on 18/05 to my client. This included an outstanding balance as a positive number and payments received until the invoice date, as a negative number.

 

All client payments received to date have been marked as sales receipts.

 

Since sending invoice #1004, I have received 2 payments from the client.

 

At the end of the month I plan to bill a new invoice with the additional charges accrued since #1004 was sent.

 

My questions:

 

1. As the client is in debt to me, do I really need to maintain the retainer/client trust account? I guess not. This is a legacy from a previous arrangement.

 

2. When I bill the next invoice (e.g. #1005) at the end of the month I assume this should be sent as normal, but any payments received should just been taken off #1004 until that invoice is cleared, and then start on #1005.

 

3. Do I need to mark payments received as sales receipts? I assume not as they should be taken off invoice #1004.

 

3. If I don't maintain the retainer/client trust account how do I account for payments received before invoice #1004 was sent?

 

Any help is really appreciate – I just want to get this issue sorted.

 

Thanks again,

Gavin

 

 

 

 

 

 

QuickBooks Team

Re: Client retainer (invoicing and payments)

I hope you had a good weekend, Gavin.

 

Thanks for the input, @Anonymous. I'll take it from here to help Gavin out.

 

In your first reply:

 

You would need to record what happened in real life. If you received a payment for the invoice, then you would need to mark it against the invoice.

 

You don't need to create and send a new invoice. You can send them a statement instead. It includes the total balance of the customer from all open invoices. For partially paid ones, they would simply appear as "Partially paid" when you check their status. The total balance would still reflect in the client's profile.

 

In addition, I take it that there's no prepayments for invoice #1004. There's no need to maintain the client trust account.

 

Next, in QuickBooks, creating a new invoice would mean that there's another set of charges. It would also mean that payments are separate when accounting for the amounts.

 

Since retainers aren't used for #1004, you would simply need to record the payments normally. You can open it, and then click on the Receive payments button.

 

Finally, you can account for the payments received using the income account mapped to the service or product items. You'll want to go to your Chart of Accounts, find the income account, and then click on the Run report button. It will show the detailed view of the transactions.

 

If you have any other questions, please let me know. I'll get back to you as soon as possible.

Frequent Contributor *

Re: Client retainer (invoicing and payments)

Thanks both for your continued help. I'm there I think!

 

Just to confirm my understanding is correct...

 

1. Payments received prior to invoice #1004 should be credited to the client trust account and then debited in invoice #1004. 
2. Moving forward, there will be no retainer as the client is in debt.
3. Payments received after invoice #1004 should be marked as payments against the invoice.

At the end of the month, I will:

4. Raise a new invoice for the new charges, e.g. #1005
5. Send a statement to the client detailing the outstanding balance for invoice #1004.

 

Thanks

Gavin

QuickBooks Team

Re: Client retainer (invoicing and payments)

Good to see you again, Gavin.

 

You are definitely correct on all points. I'd like to add something for number 5. The statement doesn't only show invoice #1004, but all the outstanding invoices.

 

You can learn more about statements here: https://community.intuit.com/articles/1145736.

 

Please don't hesitate to reach out to me if you need more help.

Intuit

Re: Client retainer (invoicing and payments)

Hi @G_Cooper,

 

I am glad you received the guidance you needed and I hope you're feeling more confident regarding your issue!

 

The Community is much more than product advice and support. It's also a place for networking, business support and a place to gain business inspiration. 

 

Please do browse our boards over on the Business Discussion section of the Community. Linked below... 


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