Application of deposit/retainer

Hi there, Whitney,

Since you've already recorded the retainer in QuickBooks, we can now set up a Retainer Item directly to the Gear icon. I'll guide you through the process.

Here's how:

1. Select Product and Services in the Settings.
2. Click New Product/Service, then choose Service.
3. Name the product or service item (e.g., Retainer).
4. From the Income Account dropdown menu, select the liability account created in Step 1.
5. Click Save and Close.

After that, you can create an invoice and apply the retainer item as a negative amount. Note that the retainer amount should not exceed the invoice total. While an invoice total can be zero, it cannot be negative. Once finished, click Save and Close.

If you wish to record the payment separately, you can create a dedicated bank account for the retainer. This account allows you to temporarily post the deposit, then transfer the funds to your operating account once it's treated as income. However, if the funds will remain in the operating account, this additional step is unnecessary.

Feel free to reach out if you have any questions or need further clarification.

Your report details are helpful and I can generate a report, but it returns all the customers that we have held a retainer. Even the ones with a zero balance. How do I run a report that only returns the customers that we currently hold a retainer?

Thanks for following up on this thread and for letting us know the results of completing the steps above, Whitney4715.

I'm happy to lend a hand so you're able to view only customers you currently hold a retainer for in QuickBooks Online.

To run a report showing only customers with active, non-zero retainer balances in QuickBooks Online, use the Customer Balance Summary report and customize it to filter out zero balances. This requires having a specific liability account designated for retainers. Here's how to get this done:

1. Go to Reports and search for Customer Balance Summary.
2. Click Customize at the top.
3. Expand the Filter section.
4. Select the Distribution Account (your liability account for retainer/trust).
5. Under the General section, change Show non-zero or active only to Non-zero for both rows and columns.
6. Click Run report.

Alternatively, you could run a Balance Sheet, click on the retainer liability account total, and customize it by customer. The following article provides additional info about customizing reports in QuickBooks Online.

Please give these steps a try and let me know how things look afterward. I'll be here if you have any other questions.