Retainers

[David Langer]

Thanks .. but when the client pays the retainer, and I credit the sales
acct, it then seems that I have an income, when in fact there's not an
income. Only when the job is finished and the retainer is transferred to the
regular acct, is there actually an income (when the regular acct should be
debited).

Back in 2004 someone by the name of Benjamin half-described about this
situation, and partially wondered if the retainer acct should actually be an
equity acct, since it's not an asset. This is the link:

http://www.gnucash.org/pipermail/gnucash-user/2004-February/009460.html


Now, this may be way  off: when the client deposits the retainer, I credit
their liability sub-account, and debit the equity retainer account.

When the job is complete, I credit the equity retainer account and debit the
regular acct. I also debit the client liability sub-acct and credit the
corresponding income acct.



On Sat, Sep 25, 2010 at 3:01 PM, Keith Bellairs <keith at bellairs.org> wrote:

> The "client retainer account" is the liability subaccount of the bank
> account you described for retainers. "Services rendered" is an income
> account -- sales. You probably want one for each client?
>
> The "retainer account" is the bank account (asset) that you deposited the
> retainer in. Its balance increased when you debited the client's subaccount.
> The "regular account" is the bank account that you keep your money in. When
> the balance in the "retainer account" is positive (more cash in it than
> offsetting liabilities to clients), then you have earned the right to move
> that balance from the retainer account to your money.
>
>
> On Sat, Sep 25, 2010 at 2:41 PM, David Langer <dlangerpi at gmail.com> wrote:
>
>> Can you please let me know where these accounts are located, that is, what
>> type of accounts they are?
>>
>> Thanks
>>
>> On Sat, Sep 25, 2010 at 2:28 PM, Keith Bellairs <keith at bellairs.org>wrote:
>>
>>>                                   Dr           CR
>>> Client Retainer             1,000
>>> Services rendered                       1,000
>>>
>>> Retainer account                        1,000
>>> Regular account          1,000
>>>
>>> Accounting for the income is one transaction. Moving the money around
>>> because it is now yours is another. Of course, you can do it as one set of
>>> splits, or you could sweep money out of the retainer accounts periodically.
>>>
>>> I don't use the invoicing tools so no comment on that part, except that
>>> obviously there is no balance due. The invoice is reporting the fee earned,
>>> the amount charged to the retainer, and - perhaps - the remaining balance of
>>> the retainer.
>>>
>>>
>>>
>>> On Fri, Sep 24, 2010 at 11:52 PM, David Langer <dlangerpi at gmail.com>wrote:
>>>
>>>> Hi,
>>>>
>>>> I'm trying to set up a liability account for client funds which will be
>>>> allocated to sales when they are paid (retainers).
>>>>
>>>> This is the situation:
>>>>
>>>> A client would pay a retainer, which would be deposited to a bank
>>>> account
>>>> especially for this purpose. At the same time, I will have set up a
>>>> liability sub-account account for this client, as in fact, the deposit
>>>> is a
>>>> liability.
>>>>
>>>> In GnuCash I will credit the liability sub-account to the bank account.
>>>>
>>>> But here's the part that confuses me (so far): what happens when a job
>>>> associated with that client is paid (in part, for example), by the
>>>> retainer?
>>>> How do I move the money from the retainer bank account, to sales, and at
>>>> the
>>>> same time, account for the change in the liability sub-account? Even
>>>> more
>>>> confusing, how to invoice, and then account for the payment?
>>>>
>>>>
>>>>
>>>>
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>>>
>>
>>
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>
>


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