Hello there, @allen-rrsconstru.
Let me share some information about handling or recording a retainer fee in QuickBooks Online.
First, create a liability account to track the amount of the retainers.
Then, create a retainer item. Here's how:
Once done, create an invoice or sales receipt for the retainer. Please check this article for more details: Record a retainer or deposit.
Still, you can consult your accountant to manage it properly in your QuickBooks. Your accountant will provide suggestions based on what's more suitable for your business, you can find one by going to this link: Find an accountant.
If you want to run some sales reports, you can go to the Report menu. Also, I've attached a few resources to guide you with QuickBooks reports:
Please let me know if you have more concerns. Stay safe and have a good one, allen-rrsconstru.
I followed the link about how to record a retainer, all good (liability account, service item, sales receipt) but I have 2 issues:
Our retainers are applicable to the last Invoice, sometimes the clients put us on hold for lets say 2 months deciding later to not continue services, then : if we apply the retainer as a negative amount on the bottom line of the last Invoice issued 2 months ago, it becomes Income the date of the invoice (in cash basis) for an already closed and reported period.
To go around above I can create a Credit Memo on the month the client cancelled and apply it to the "past" invoice then the Income goes to the right month, but happens that the retainer is larger than the Invoice, so now the client has a credit, then:
How do I record the reimbursement to the client ?
If for example the retainer is for $300 and the Invoice for $200, the customer shows a balance of -$100 (after applying the Credit Memo to the invoice), but when creating a check payable to the customer (against the "retainer" liability account to zeroed it out, which it does) the customer balance is still -$100 and the check is not even showing up on the transaction list, where is my error ?
I've got you covered, EHHC.
I appreciate you following my colleague's instructions as well as following the steps in the article. Yes, you are correct; you can generate a Credit Memo for the month in which the client canceled and apply it to the "past" invoice. As a result of the retainer being greater than the invoice, the client now has a credit. To resolve this, we can record the refund as a check or expense, which reduces your bank's balance and offsets the customer's open credit, overpayment, or prepayment. First, make a note of the refund for your customer:
Once done, link the refund to the customer's credit or overpayment. Let me guide you on how:
Here's an article you can refer to for more details about recording a customer refund in QuickBooks Online. Importantly, to ensure that your books are accurate and to avoid messing up the data, I highly recommend seeking assistance from your accountant. They can advise on other options on how you can reimburse expenses in QBO. If you're not affiliated with one, you can use our Find an Accountant tool to look for a Pro-Advisor near your area.
Don't hesitate to hit the reply button below if you still have questions or concerns about reimbursing your client. I'm more than happy to answer them for you. Take care and have a good one.