Retainers

A retainer is an advance amount collected from a client prior to work beginning on a project. The amount of the retainer is typically stipulated in the client's contract, and may be required for a variety of reasons.

For example, you may want to require a retainer payment as a safeguard if the client is a new client to your company. The amount of the retainer is subtracted from the contractually agreed total project billing amount when the project is billed.

You apply and track the retainer according to your company’s accounts receivable categories. When the project has other accounts receivable activity, you can track the amounts applied, and the retainer balance, on the Accounts Receivable Ledger report. The retainer is included in Current Receipts on the Office Earnings report.

Retainers may be confused with retainage, which is an amount you withhold from billing a client, as a good faith measure to build trust in your company, or to entice the client to hire your company.