Retainer/Project Billing Rec.'s? for Professional Services Firm
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I run a small PR agency and have 7 clients that I bill a monthly retainer fee and 2-5 project clients that will receive just one bill upon job completion. What's the best way to set this up accordingly in QB for y/in out and reflecting the retainer?
Answer
If the retainer is a fee that isn't refundable, then this is just ordinary income.
If it is refundable, you track it as a liability. If you are tracking it as a liability, you need to include an Other Charge Item to post the retainer to the liability account and to show it is applied to charges owed, to reduce the actual balance owed (perhaps to $0). You can use a Sales Receipt when the retainer is received, using the same Other Charge item that is linked to the liability account.
You can read about Customer Advances, Customer Deposits, Prepayments, and Retainers in the Help system. Just search on these as keywords.
