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Level 1

Does anyone know how to include retainage on an invoice or for a customre?

 
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QuickBooks Team

Does anyone know how to include retainage on an invoice or for a customre?

Hi there, @mbrabston2.

 

Let me guide you on how to invoice retainage for customers.

 

You can set up a deposit or retainer process for your company in QuickBooks Online. To do this, you need to create a liability account so that it'll be easier to track your retainers.


Here's how:

 

  1. Click on the Gear icon, select Chart of Accounts.
  2. Select New.
  3. Under the Account Type drop-down list, select Other Current Liabilities.
  4. Under the Detail Type drop-down, choose  Trust Accounts - Liabilities.
  5. Enter a name for the account or accept the suggested name.
  6. Select Save and close.

To do this, follow these in creating a service item for retainers:

  1. Click on the Gear icon, select Chart of Accounts.
  2. Select New.
  3. From the Product/Service information panel, select Service.
  4. Enter a name for the new product or service item (for example, Retainer).
  5. From the Income Account drop-down list, select Trust Liability Account.
  6. Select Save and close.

Once done, you can now create invoices for customers. 


Here's how to do it:

  1. Click on the Plus icon (+) on the Toolbar.
  2. Under Customers, select Invoice.
  3. Select the Customer name from the drop-down list.
  4. In the Product/Service column, select the Retainer or Deposit item you set up.
  5. Enter the amount received for the retainer or deposit in the Rate or Amount column.
  6. Select Save.

Please read this article for more details on retainers: How to Record a Retainer or Deposit?

 

Feel free to leave a comment below if you have any other concern. Have a wonderful day!

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Level 15

Does anyone know how to include retainage on an invoice or for a customre?

Retainage is your Other Current Asset, if you are an accrual basis entity. Otherwise, it is a reduction of Income now, for being income later. Make a Service or Other Charge item for this. linked to Other Current Asset or Income (whatever meets your accounting requirement). Name them both Customer Retainage.

 

Use the Retainage item with a Negative on the invoice or sales receipt. This reduces the amount the customer owes, as an amount you will collect from them later.

 

Later, you use that on an invoice or sales receipt to show it is now Earned by you and that it is yours to keep.

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