Hi there, @SWyatt502. I appreciate the detailed information you provided about recording your retainer deposit and everything you've accomplished so far. Allow me to share some insights on how you can enter this in QuickBooks.
The instructions you followed in creating a liability account and item for recording a retainer transaction are correct.
However, you will need to Undo the matched transactions in the Banking tab, including the invoice you created, as leaving them as is may result in discrepancies in your records.
Once completed, the $12,500.00 prepayment deposited in your bank should be temporarily categorized under the account you created in Other Liabilities, as it is considered unearned income at this stage.
Here's how:
- Go to the (+) Create.
- Select Bank Deposit below the Other column.
- Move to the Add funds to this deposit section and select the customer who directly deposited the amount.
- In the Account section, choose the retainers category you created under Other liability. Then, enter the Amount.
- Once done, click Save and close.
Also, you can apply these funds to your venue expenses once you receive the bill by creating a Billable Expense transaction and linking it to the customer who deposited the $12,500.00.
You can follow the steps below:
- Go back to the (+) Create.
- Hover your mouse over the Bill tab.
- Select the Vendor of the venue expense.
- In the Category details, select the kind of expense you incurred and enter the Amount. Then, tick the Billable box and select the Customer who made the sponsorship.
- Once done, click Save and close.
Once the event is complete, you can re-categorized the $12,500.00 from the Other Liabilities account to Accounts Receivable. Simply refer to the Bank Deposit instructions provided earlier for guidance or edit it in your Chart of Accounts (COA).
This is the time you will create an invoice for the sponsor and include the billable expense transaction that appears on the right side of the screen. Once completed, receive the payment for the invoice.
Finally, go to your Bank Transactions tab and match the paid invoice to the deposited amount in your bank account to ensure the entries are properly balanced.
Additionally, I recommend consulting your accountant for further guidance, as these transactions involve accounts that can impact the overall balance of your books.
If you have any additional questions, feel free to reach out again. We're here to assist you promptly.
