How to account for a legal retainer payment and then invoice payment

1

I am trying to determine how to account for a retainer payment, and then later the payment of an invoice from that retainer.

What I have done so far is:

  1. Enable Special Accounts
  2. Create a Trust Funds Receivable Control Account
  3. Create Legal Retainer within the control account
  4. Create a payment under “Receipts and Payments” to the retainer

Now I am stuck, and I am not sure if the above is the recommended method for dealing with retainers. I cannot determine how to apply a payment from the retainer to the legal fees invoice.

All I can find as examples on these forums are for the inverse, a received retainer for a law firm for example.

2

Read the Guide about avoiding automatic allocation of advances and deposits. There is an example.

You can also just credit the retainer to accounts receivable. The Guide about recording advances and deposits covers that.

You could also just enter a receipt directly without a sales invoice. The point of a retainer is often that it covers all work during a period without further accounting.

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3

Thank you Tut!