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Retainers

Overview​

Accepting fees for future work is a common need of many companies. QBO and LedgerLink support this need for retainers by defining a simple dedicated item and enabling the sync of the "Retainer" entity.

The Retainer Entity​

The Sync Log's last row entry is "Retainer." This is a special entry, in that it does not map to the QBO API. For this entry, you need to select a Liability Account, as retained funds are not seen as income until the product or service is provided to the customer and invoiced.

Steps​

  1. Create a liability Account in QBO for the retained funds. In the image below we called that account "On Retainer". You can call it anything you like.
  2. Navigate to the Sync Log.
  3. Sync Accounts to bring that new account into LedgerLink.
  4. Scroll to the last entry "Retainer."
  5. Click the gear icon to reveal the "Required Liability Account" dialog.
  6. Select the liability account that you created in step 1.

Retainer Liability Account

The Retainer Item​

In addition to a dedicated liability account, you will create a dedicated Retainer item. This item will have an assigned Equity account as its linked Income Account.

Steps​

  1. Create a new Equity account in QBO for retainer income.
  2. Create a new item in QBO and assign the equity account that you created in step 1.

Using the Retainer Item​

Receiving Retainers from Customers​

  1. Create an invoice.
  2. Add a line item with the Retainer item as the reference product and an amount equal to the amount of the retainer.

Drawing off a Retainer​

  1. Create an invoice.
  2. Add a line item with the Retainer item as the reference product and a negative amount equal to the amount of the retainer that you wish to charge against. This decreases the retainer balance and increases income.