Retainers enable you to collect money from your clients in advance, which can then be applied to future work. This guide shows you how to set up a retainer service item, collect the retainer funds, see the balance, and bill against it.
Set Up a Retainer Service Item
Go to Billing > Settings > Service Items.
For an existing Service Item: If you already have a service item you want to use, click the three dots on the right side of the table and select Mark as retainer.
For a new Service Item: Click New service item, fill out the details, choose an income account if you use QuickBooks Online, and turn on the Retainer toggle.
Collect the Retainer Deposit from the Client by Sending an Invoice
Go to Billing > Invoices and click Create Invoice in the top right corner
Fill out the invoice details and choose your retainer service item for the line item.
The retainer icon helps you confirm you have the right item.
Preview and send the invoice to your client to collect the retainer deposit.
Check the Balance of a Retainer
1. Go to the client’s details page and open the Billing tab.
2. Scroll down to the Retainer Balance table.
⚠️Please note: The retainer table may load slowly. We’re aware of this and plan to improve performance.
3. The table shows each retainer service item, the amount billed, and any debits or credits. Click a retainer name to see the invoice, status, and transaction history.
Bill Against the Retainer
After you perform the work, create a second invoice for the client.
Either click to manually select the service item(s) to bill for, or click Add unbilled time to add billable time entries.
Once you've finished adding all the desired billable line items, again click Add service item and select the retainer service item you'd like to charge against.
Enter a negative value for Amount to charge against the retainer amount.
Once all the details are completed, you can click Mark as Paid, or if there's a balance remaining on the invoice, you can send the invoice to the client.
💡 Tip! If you do not want to share this invoice with your client, you can enable the option for Mark as internal. The invoice won't be sent to the client via email nor available for viewing on the client portal, giving your firm more control over what clients can see and access.
If you check the Retainer balance table again, you will see that the amount will have been debited from the retainer.
Retainers vs. Credits
Retainers represent prepaid funds held in your account on behalf of a client. When you invoice against a retainer, the amount is deducted from the client’s retainer balance. Credits, on the other hand, are adjustments that reduce the amount owed on an invoice, usually because of a discount or correction. Credits don't represent prepaid funds. They lower the invoice total. Retainers are collected in advance and live in the client’s retainer balance, whereas credits are applied directly to specific invoices.