Retainers on project contracts

A retainer is a fee to secure services. A retainer is used in a pre-bill or deposit. A retainer invoice is created so that funds can be collected at the beginning of a contract. After the work is complete, an invoice for the actual expense is generated. The retainer is applied to the invoice amount, which reduces the invoice amount that is owed.

Retainers can be applied to the first invoice, to the last invoice, to a specific invoice, or over multiple invoices. Retainers can be applied as an amount or a percent of the total.

A contract can have multiple retainers. For example, a retainer invoice can be generated at the beginning of a contract. After the retainer is exhausted or is fully applied, a new retainer invoice can be generated. Similar to project milestones, a retainer can be applied to all project expenditures or can be applied to a specific posting project.

For example, a company requests that a lump sum of money is paid at the start of a contract. After all of the billable work is complete, the retainer is used to reduce the amount of the invoices.

The retainer is not considered earned income, it is a liability for work that has not been performed. After the work is performed and performance obligations are satisfied, revenue can be recognized.

A project retainer cannot exceed the amount of the funding source. When the retainer is created, the retainer amount is updated against the remaining funded balance. When a maximum amount is specified on the contract, no update is made against this amount when the retainer is created.

When the retainer rule applies only to the retainer project, the retainer amount is updated when the retainer invoice is generated. If the retainer amount is greater than the billing maximum, then the invoice amount of the retainer is adjusted to the billing maximum. When the retainer rule applies to all projects, no additional update is made when the retainer invoice is generated.

Project retainers are applied to an invoice from the available amount or are partially applied on the next applied amount or the next applied percent.

This list contains information about the Next Applied Amount and the Next Applied Percent fields:

• If transactions are removed from an invoice, then you can reapply the retainer. The applied retainer lines are the last lines in the invoice line details and denoted with a blue alert.
• If the retainer lines contain a zero amount after deleting transaction lines, then you can reapply the retainer. The Reapply Retainer action is not available when the next applied fields are used.