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kimlingchen
Level 1

How to post a retainer for supplier?

 
5 Comments 5
JamesM
QuickBooks Team

How to post a retainer for supplier?

Hi there,

 

You've come to the right place for assistance. I'd be happy to share info on how to record a retainer for a supplier.

 

When you order a part or a service from a supplier, the supplier may require you to pay a portion of the price before delivery. You have two options for entering the prepayments or deposits, either by using Accounts Payable or an Asset account. Consult your accounting professional to know which option is best for you.

 

Option 1: Use Accounts Payable to record prepayment

 

You can write a cheque to the supplier and record it to your Accounts Payable (A/P) account, decreasing the balance until you are ready to enter the final bill.

 

    1. Create a cheque for the supplier.

  •         Go to the Banking menu, then select Write Cheques.
  •         Enter the supplier name, date, and the payment amount.
  •         Go to the Expenses tab. In the Account column, enter Accounts Payable.
  •         In the Customer:Job column, click the drop-down, then choose the supplier name.
  •         Select Save & Close.               

    

    2. Enter the bill.

  •     Go to the Suppliers menu, then select Enter Bills or Receive Items (if you like to record the bill later).
  •     Fill in the necessary information.
  •     Select Save & Close.               

     3.  Apply the prepayment to a bill.

  •     Go to the Suppliers menu, then select Pay Bills.
  •     Highlight the bill you want to associate with the prepayment.
  •     Select Set Credits.
  •     The prepayment will display in the Set Credits screen. Make sure it is checked, then select Done.Note: If there is a balance due on the bill, QuickBooks will create a Bill Payment Cheque.              

Option 2 would be using an asset account to track track the retainer. For more info on this, I recommend checking out this helpful article: Record supplier prepayments or deposits for prepaid.parts or services. In case you have other questions, don't hesitate to reach back to me. I'm here to help. :) 

GBatWHC
Level 1

How to post a retainer for supplier?

You said to create a cheque for the supplier, but I have paid the retainer with my visa and that wasn't an option on the banking, write cheques page. I won't have a bill for a few weeks, but want to record the prepayment.

JamesM
QuickBooks Team

How to post a retainer for supplier?

Hi there. I appreciate you reaching out. Just to make sure we're on the same page, are you using QuickBooks Online or Desktop? 

GBatWHC
Level 1

How to post a retainer for supplier?

Desktop

JamesM
QuickBooks Team

How to post a retainer for supplier?

Thanks for confirming. I encourage you to check out this helpful article related to recording prepayments using QuickBooks Desktop: Manage upfront deposits or retainers. In case you have other questions, I recommend contacting our support team using this link here

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