Posting retainers in QB?

[Coloradomom]

Thank you to everyone for your great advice on clearing partial batches in QB - I am working through that nightmare with my client!

Now, on to the next question... my other client with the wonderful 2009 data to input with no backup... I have gotten all the CC info and LOC inputed and reconciled (yea ME!) but need to do her operating account and trust account. She is a lawyer, and frequently takes a retainer from each client. This $$ is deposited into the 'trust account', basically a checking account separate from the operating account.

I need to show the trust account balance for each client so they know how much money they have left. So, I'm setting up each client as a customer. I am accepting the payment from each customer as a huge credit. When I create an invoice for services, I use part of their existing credit to pay for the invoice. Then I run a statement to show their balance, the invoice amount, and their remaining balance. The statement doesn't show their invoice detail (i.e., 2 hrs legal service, court fee bill back, etc) so I'm going to attach a copy of the invoice marked paid with the statement.

Is that what you all would do? the statement, however, shows the credit as a negative number under 'amount due'. Is there anyway to show a positive number as "balance remaining"?

A sub question to that is the existing credits throw off the a/r report. If I run a report, and we have say... $5,000 in existing a/r's, but also have say, $900 in unused credit for some of the customers, the report tells me we only have $4,100 in a/r's - which is misleading. We haven't generated an invoice YET against the $900 in credits because the work hasn't been done yet - a court date is pending, a visa not completed, etc. So we really do have $5,000 out there to collect. Any ideas on how to filter that out of the report?

Thanks for your help!!

[debhowardgreenleaf]

This is how I handle deposits (which is the way QB would look at a retainer, IMHO):

Create a new Other Current Liability account in your Chart of Accounts called "Customer Deposits."

Create a new Service Item called "Retainer." Make sure it's a two-sided item (ie, check the box "This service is used in assemblies ..." The Expense Account on the Purchase side should be your Customer Deposits liability account. The Income Account on the Sales side should also be your Customer Deposits liability account.

Create a Sales Receipt for that customer for the amount of the deposit. For the Item, use the Retainer item.

At the end of the month, you need to create an invoice for the client listing the time/services that were actually sold. On the last line of the invoice, enter the Retainer item with a negative amount for the amount of their initial retainer payment.

This will make sure that the A/R report isn't all wonky. Until the service has been rendered (and recorded on an invoice), the balance will sit in the Other Current Liability account ("Customer Deposits"), which is where it should be from an accounting perspective.

HTH!
Deb